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Dan Solin: The 401(k) Rip-off May Be Ending

by Dan Solin on April 17, 2012

Huffington Post…

It has long been my view that 401(k) plans are a national disgrace. They are rife with conflicts of interest between those who “advise” them and the participants who contribute to them. The investment options in the plan are chosen through a cozy, complicated and little understood process by which mutual funds make payments to brokers and insurance companies in order to get selected for a coveted place in the line-up of funds from which participants are required to make their selections. In any other context, these payments would be called bribes. In the 401(k) industry, they are known as “revenue sharing payments”, justified by tortured logic intended to obscure their real purpose, which is to populate these plans with expensive, actively managed funds likely to underperform index funds of comparable risk over the long term. The inner workings of the 401(k) system are shrouded in secrecy and mired in complexity, which is exactly the way the securities industry wants to keep it. There has been little scrutiny of how investment options are actually selected for inclusion in the plan. Justice Louis D. Brandeis famously stated that “sunlight is said to be the best of disinfectants”. 401(k) plans have been operating in very dense fog. Lawsuits challenging this unsavory process have had mixed results. Most have been dismissed as having no legal merit. Some have been quietly settled. None have gone to a trial on the merits, until now. Tussey v. ABB, Inc ( Case No. 2:06-CV-04305-NKL) is a class action brought in the United States District Court for the Western District of Missouri, Central Division, by present and former employees of ABB, Inc, who were participants in two 401(k) plans. The plans included mutual funds managed by Fidelity Investments. Affiliates of Fidelity served as investment adviser to the mutual funds in the plan and as recordkeeper to the plans. After a four week trial, U.S. District Judge Nanette K. Laughrey issued an extensive opinion. She found that ABB and Fidelity “… violated their fiduciary duties to the Plan when they failed to monitor recordkeeping costs, failed to negotiate rebates for the Plan from either Fidelity or other investment companies chosen to be on the PRISM platform, selected more expensive share classes for the PRISM Plan’s investment platform when less expensive share classes were available, and removed the Vanguard Wellington Fund and replaced it with Fidelity’s Freedom Funds.” The Court was especially critical of the process employed by the Pension Review Committee to replace the Vanguard Wellington Fund with Fidelity’s Freedom Funds. The Court noted the stellar, long term track record of the Wellington Fund. It found that the “… recommendation to add the Freedom Funds to the Plan’s investment platform and remove the Wellington Fund despite its excellent performance record was motivated in part by his desire to decrease the fees that ABB was paying and to maintain the appearance that the employees were not paying for the administration of the Prism Plan.” So much for acting in the best interest of the plan participants. As compensation for the misconduct of the plan fiduciaries, the Court assessed damages of $36.9 million and left open the possibility of awarding attorney fees to the plaintiffs. I contacted ABB and was told by their representative that it “strongly disagreed” with the decision and was “considering its options, including an appeal.” Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of “The Smartest Investment Book You’ll Ever Read,” “The Smartest 401(k) Book You’ll Ever Read,” “The Smartest Retirement Book You’ll Ever Read” and “The Smartest Portfolio You’ll Ever Own.” His new book is “The Smartest Money Book You’ll Ever Read.” The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Dan Solin: The 401(k) Rip-off May Be Ending

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Gerald McEntee: Let’s Get Women Out of the Red

by Gerald McEntee on April 17, 2012

Huffington Post…

Workers are under attack and women are bearing the brunt of it when it comes to pay . Who’s to blame? Corporate-backed politicians typified by Wisconsin Governor Scott Walker. Last week, in the dead of night, Walker signed a piece of legislation that rolls back progress on pay equity in his state, where women make only 75 cents for every dollar a man earns doing the same job. (Wisconsin’s rate was already worse than the disheartening national average of 77 cents on the dollar.) Walker’s legislation repeals a 2009 law that made it easier for victims of wage discrimination to have their day in court. His action adds another to the growing list of reasons Wisconsin voters want to recall him this June . Republican presidential hopeful Mitt Romney has yet to denounce Walker’s anti-worker, anti-women action. Recently, Romney’s campaign officials were stumped by a reporter’s question on the topic. The reporter asked if Romney supports the Lilly Ledbetter Fair Pay Act , the first law President Barack Obama signed, making it easier for women to sue in wage discrimination cases. Campaign officials were silent, then said only, “We’ll get back to you on that.” No public official should have to stop and think about pay equity. It’s the right thing to do. And it’s the smart thing to do. When women do not get paid fairly, we all suffer. Yet in places like Wisconsin, the systematic attacks on women’s pay and voices continue. Walker’s so-called “budget repair” bill passed last year broke the livelihoods of many women in the state, where the resulting layoffs and pay cuts disproportionally hit working women. Leah Lipska, a member of AFSCME Local 1 in Wisconsin, told her story in a letter to the Washington Post . She wrote, “Aside from my full-time job with the state, I have been forced to take a part-time job at a local pizza place. Even that’s not enough to make up for my decrease in pay since Governor Walker’s law. I got so far behind on my car payments, I had to ask my parents for help. I’ve even had to go to the local food pantry. [Walker] is no hero; he’s stolen our American Dream.” Nationwide, the reality of pay inequity for women of color is even bleaker. African-American women make about 72 cents for every dollar earned by a white man. Latina women, only 62 cents. In the 1970s, pay equity emerged as one of the most significant issues confronting women. AFSCME members in San Jose, Calif., staged the first pay equity strike , and AFSCME members in Washington state reaped the benefits of the largest pay equity court settlement to date. We have made some strides as a nation, through pay equity agreements at the bargaining table and in state and local legislatures. But progress has been far too slow and much too scarce. Today, pay equity remains so troubling an issue that President Barack Obama talked about it in this year’s State of the Union address. “An economy built to last is one where we encourage the talent and ingenuity of every person in this country,” Obama said. “That means women should earn equal pay for equal work.” Wisconsin gubernatorial recall candidate Kathleen Falk echoed these words recently. “As a woman, as a mother who worked full-time while raising my son, I know first-hand how important pay equity and health care are to women across Wisconsin.” Today, AFSCME members across the country are wearing red . We are wearing red because we, like Falk, know how important pay equity is. We are wearing red to stand in solidarity with the women we work with every day, the women who make America happen. We are wearing red to get women out of the red. “Another day, another 77 cents on the dollar,” doesn’t have a nice ring to it. We must finish what we started in the 1970s. We must stop the corporate-backed politicians who are trying to rewind history. We must make sure women earn equal pay for equal work.

Original post:
Gerald McEntee: Let’s Get Women Out of the Red

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Chip Conley: The 7 Practices of PEAK Leadership

April 17, 2012

Why don’t we “practice” business? I’ve come to realize that — unlike medicine and law — we don’t think of our profession as business leaders as a “practice.” A few years ago, in the last downturn, I developed the principles of PEAK as an alternative operating model for my business based upon Abraham Maslow’s iconic Hierarchy of Needs pyramid. Reinterpreting this well-known theory of human motivation helped me to see that all stakeholders associated with a company have their own Hierarchy of Needs. My company Joie de Vivre tripled in size during this difficult period and I came to find out that a variety of other transformational companies like Harley-Davidson have used Maslow’s theory as a foundation for their business model. Business principles are only as good as the practices that back them up. Recently, with the assistance of some good friends, I’ve developed a set of PEAK Leadership practices that can assist any leader or leadership team to move from survival to success and on to being a transformative role model in their industry. When a company embeds these principles and practices in how they grow their leaders, the end result is PEAK performance: a phenomenon of sustained growth — both for the organization as well as for those within the organization. Practice 1: Embody an inherently positive view of human nature. The principles of PEAK have their roots in humanistic psychology and a basic belief that man is meant to “be all that he can be.” So, it’s not surprising that the fundamental first practice is assuring that a PEAK leader believes that humans — at their very core — gravitate to goodness when the right conditions exist for them to flourish. Creating what Maslow called “psycho-hygiene” in a company means focusing on people’s best qualities and believing in what’s been known for a half-century in business as a “Theory Y” perspective on management versus “Theory X.” With Theory X, management assumes employees are inherently lazy and will avoid work if they can. As a result of this, management believes that workers need to be closely supervised and a comprehensive system of controls developed. With Theory Y, management assumes employees may be ambitious and self-motivated. They believe the satisfaction of doing a good job is a strong motivation and seek to create the conditions for the employee to develop their own strengths to be successful. While this latter theory may feel intuitively right to many of us, is your organization still structured in a Theory X style of business? Practice 2: Create the conditions for people to live their callings. Great leaders understand there are only three relationships you can have with your work: a job, a career, or a calling. A job tends to deplete you and a calling energizes you. Most employees live in the bartering world of work. The company gives them a compensation package and recognition and, in return, the employee gives their time and energy. Yet, those that are living their calling have moved from external to internal motivation. And, these employees are not exclusively focused on the specific collection of tasks they perform and are more focused on the impact or purpose of what they do. The best hospitals have more nurses living their calling. The best airlines have the happiest flight attendants (Southwest). What are you doing to help your people find their sense of calling in what they do? Practice 3: Promote and measure the value of intangibles. In business, we are taught that leadership is all about managing what you can measure, but what’s most easily measurable is the tangible in life. Yet, is it the tangible or the intangible in business and life that creates value? In business, the metrics that track the tangible are well known: your profitability, assets & liabilities, cost structure, market share. Yet, in reality, these tangible metrics are the result of a series of intangibles that drive excellence: brand loyalty and reputation, employee engagement, customer evangelism, the ability to innovate. Great leaders nurture, value, and evolve corporate culture — one of the most valuable intangibles — as a key differentiator for their company. These intangibles are the inputs that drive the tangible output that most companies use to evaluate their performance. In the 21st century, great leaders are learning how to measure and benchmark these intangibles so that they’re not out of sight, out of mind. Which intangibles are most valuable to your business and how are you measuring them? Practice 4: Ability to move fluidly between being a “transactional” and a “transformational leader.” Author James McGregor Burns once wrote that, “Transformational leaders look for the personal motives in followers, seek to satisfy higher needs, and engage the full person of the follower.” Yet, most management decisions require only transactional thinking because the goal is purely to optimize existing resources. A great leader is able to move fluidly between addressing the foundational needs that people have, but also helping them see beyond the short-term so that they can be motivated by a compelling vision that helps them transcend their momentary challenges. How much of your time is stuck in the trenches as a transactional leader versus focusing on how to create transformation? Practice 5: Calibrate the balance between “Conscious” and “Capitalism.” Business has quite often been seen as a “zero-sum” game. One person’s win is another person’s loss. Taken to the global level, some believe that capitalism’s short-term gains are often to the long-term detriment of the environment and to certain communities. And, at this crossroads, in an increasingly transparent world, this is why great leaders have to think more broadly about the impact of their decisions, not just on the bottom line, but on their broader stakeholders. In many ways, Walmart took this step when they saw their stock price flat line even with sizable revenue and net income growth. Yet, for those socially conscious business leaders, cash flow is the blood that keeps your organization alive. Make sure the basic survival needs of your company are met. How do you balance the priorities of the broader community versus the financial needs of your company? Practice 6: Focus on your customers’ highest needs. Henry Ford once suggested, “If I asked my customers what they wanted, they would have said a faster horse.” PEAK leaders and companies understand what the customer wants even before the customer has articulated it and they realize that customer innovation requires a certain amount of mind reading and cultural anthropology. By doing this well (with Apple being the best example in the world), you create a movement and evangelists and reduce your need to spend money on traditional marketing. Are your customer satisfaction surveys just asking the obvious questions that will track their expectations and desires, but not their unrecognized needs? How can you “mind read” your customers? Practice 7: Lead to PEAK. Just as a Sherpa does in the Himalayas, great leaders meet their people where they are on the pyramid and help them to see the natural path to the peak. They recognize the value of loyalty and mentoring as a means of sustainable success in business. PEAK leaders champion personal development in tandem with corporate development knowing that there’s a synergistic effect of having a self-actualized individual in the workplace as evidenced at companies like Google. And, most importantly, they embody authentic leadership by being, not just by doing. How are you incubating a collection of great leaders? Conscious people pay attention. It’s true of spiritual leaders. It’s true of business leaders. PEAK leaders pay attention to the higher needs while not neglecting the base needs that provide a foundation for their organization. Leadership is all about making conscious choices and knowing that the higher you are in a company, the more magnified your decisions and behavior will be throughout the organization.

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Sarah Damaske: Equal Pay Day: In the Wake of the So-Called "Mommy Wars" Renewal and Partisan Attacks on Equal Pay Bills

April 17, 2012

Equal Pay Day comes this year in the midst of the renewal of the so-called “mommy wars” on the one hand, and a blatant attack on equal pay rights bills on the other. Last week, Hilary Rosen set off a media maelstrom when she said that Mitt Romney’s wife, Ann, “has never actually worked a day in her life.” Just a week before (and to much less fanfare), Wisconsin Gov. Scott Walker repealed Wisconsin’s Equal Pay law and one of the state senate Republicans, Glenn Grothman, was quoted as saying, “You could argue that money is more important for men, anyways.” Both have serious implications for the equal pay cause. The National Committee on Pay Equity started Equal Pay Day in 1996 to bring more public attention to the gender wage gap, the difference between what an average full-time, year-round, male worker earned and what the average full-time, year-round, female worker earned. In 1996, the difference was 73.8 cents to the dollar and, today, the difference is about 77.4 cents. Not a terribly huge improvement over the last 16 years. Researchers have long noted that a number of factors can partially explain the gender wage gap. Notably, women and men tend to work in different industry sectors and different occupations within industry, which can explain a sizable portion of the gap. But differences in pay for various occupations may be due to whether jobs are associated with women or men. In other words, while occupational differences may explain some of the gender wage gap, the pay scale for different occupations is connected to whether or not the occupations are made up of mostly men or mostly women. And as sociologist Paula England and economist Nancy Folbre found in their research , women are more likely to work in caring fields, which offer relatively poor pay given the skill and education necessary for much of this work. Devaluing the hard work of acting as a primary caregiver of children not only dismisses the unpaid labor done in the home, it also contributes to the struggle of the millions of paid female laborers who work in caring fields and find that their work is neither recognized nor justly rewarded. Calling this past week’s maelstrom a renewal of the “mommy wars” dodges the real issue: Caregiving, whether done unpaid in the home or for pay outside of it, is not particularly valued in this country and women (whether in the labor market or not) suffer the brunt of this. Differences in pay are likely also connected to bias. Having children often increases men’s wages, according to research from sociologist Rebecca Glauber , but it often decreases women’s wages and women working in low-wage jobs face the toughest wage penalties for motherhood, as sociologists Michelle Budig and Melissa Hodges found . When Grothman argued, “Money is more important for men,” he may have been tapping a generally unspoken belief — that a woman’s salary is less necessary to her family than is her spouse’s. But, these beliefs are a remnant of times gone by in which men were primary breadwinners and women were primary homemakers (although as historian Stephanie Coontz has noted, even during the 1950s, this gender divide was never as big a phenomenon as we remember it to be). Today, only 20 percent of children are raised in families with a traditional breadwinning father and stay-at-home mother. Most children, then, live in families that depend on the wages of women, and one-third of children live in single-mother households and are most at risk of living in poverty. The National Women’s Law Center reports that bridging the gender wage gap would give the average full-time working woman’s family the money to pay for an additional 4 months’ supply of groceries, 5 months’ of childcare, 3 months’ rent and utilities, 5 months’ health insurance premiums, 4 months’ student loan payments, and 5 tanks of gas. Addressing the wage gap would go a long way in increasing women’s economic security, as well as the financial security of their families. In 2010, all Senate Republicans voted against considering the Paycheck Fairness Act. As both President Obama and presidential hopeful Governor Romney continue to vie for women’s votes, it would be nice to see some serious proposals from the candidates about how to bridge the wage gap.

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Janis Bowdler: Homeowners Can’t Afford Another Missed Opportunity

April 17, 2012

When the housing bubble burst more than four years ago, many banks and federal regulators argued that the impact would be limited and the damage contained to the subprime market. Famous last words. Now we know the full story: unregulated finance companies and malfeasant brokers peddled toxic loans designed to earn originators a quick buck at the expense of unsuspecting homeowners, investors, and taxpayers. The damage has spread well beyond the subprime market and helped usher in the worst recession of our generation. The majority of financial trickery was carried out at the hands of lenders that operated outside the scope of federal oversight. The Federal Reserve could have reined them in, but reacted too late. This trend persisted under Bush and Obama when both administrations missed opportunities to get ahead of the market crash and the ensuing tidal wave of foreclosures. Last week, the National Fair Housing Alliance (NFHA) released a report on the treatment of REOs–real estate owned properties, meaning foreclosed properties owned by banks–in nine cities. Their research found that REOs in predominately minority neighborhoods were scarred with the signs of neglect and blight while those in predominately White neighborhoods were well maintained even though they are serviced by the same company. The impact goes beyond the aesthetic. Abandoned properties are estimated to reduce neighboring home values by an average of $7,200 and cost cities millions in maintenance and lost tax revenue. The disparate treatment by servicers comes on the heels of unfair targeting of these same communities by deceptive lenders. Black and Hispanic families were more than twice as likely to be sold subprime loans, even though they had the credit to qualify for regular prime loans. The foreclosures that followed have wiped out 58 percent of Black and 66 percent of Hispanic wealth. Now neglected REOs are threatening to set our neighborhoods and families back even further. The slide show below shows the contrast between in Miami between two REOs in two different communities. See if you can tell which one is in which community. When done right, REOs can be a neighborhood asset. Creative reuse of REO properties can fuel community revival and expand housing opportunities for a broad range of families. Because many bank-owned properties are in neighborhoods close to good schools, jobs, transportation, recreation, healthy foods, and other amenities, they provide a unique avenue for expanding access to opportunity for all families while also breaking down barriers of segregation and isolation. Banks should work with mission-driven local partners like Chicanos Por La Causa in Phoenix, which is acquiring REO properties and converting them into ownership opportunities for families who have completed their housing counseling program. Another NCLR Affiliate in Stockton, Calif., Visionary Homebuilders of California , has established a lease-purchase program for reclaimed REO homes where renters partner with a financial coach to work their way toward an opportunity to buy the home. NCLR is exploring ways to expand these kinds of programs to other cities throughout the country. In a recent speech, Federal Reserve Chairman Ben Bernanke stated that over the next couple of years an additional one million foreclosed properties per year could be added to the REOs held by banks, guarantors, and servicers. Beyond the fact that mortgage servicers are legally required to maintain the properties they own, it would go a long way to healing their relationship with those communities if servicers also participated in and supported those innovative programs to repurpose properties with the community’s social goals in mind. To get there, regulators–starting with the Federal Housing Finance Agency–must set and enforce strong standards to make sure that servicers treat all borrowers and all communities fairly, including standards for maintaining and marketing foreclosed homes. The Department of Housing and Urban Development and the Department of Justice should fully investigate the disparities uncovered in the NFHA report. If no action is taken, abandoned and vacant properties will continue to drag down home prices and infect neighborhoods with crime and blight. But with a little creativity and cooperation, REOs can become a driving force in neighborhood stabilization. Homeowners cannot afford for banks and regulators to miss another opportunity like this.

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Andrea Sittig-Rolf: The Audacity of Nope: Why Hearing "No" Can Help Salespeople Get to "Yes"

April 16, 2012

You may often think, “How can I increase my number of face-to-face appointments when so many companies aren’t buying right now?” The problem lies in the question itself. If you’re scheduling an appointment just to sell something, you may have a tough time getting the appointment. If the perception of your prospect is that the very reason you’re calling is to either sell them something over the phone, or schedule a meeting to sell them something, you’ll likely hear things like “It’s not in our budget,” “We’re not making any purchases now,” “We don’t have any money,” “We’re not in the market,” and “Our budget has been frozen.” In other words, you may be setting yourself up to hear “no.” If, however, you position your introduction over the phone as an opportunity to meet in person so you can learn more about your prospect and their potential future needs, you may have better luck. After all, if your goal is simply to learn about the prospect, you may not have an opportunity to sell them anything at all, so there’s less resistance to setting up a meeting. If you still encounter “no” when asking for that first meeting to start the discovery, and potentially selling process, here are some tips to get the meeting anyway. First, if you have a good sense of humor, use it, and you’ll be half way there. Making someone laugh breaks down the barrier between two otherwise strangers. If the response to your question in asking for a meeting is, for example, “We don’t have any money,” say “Neither do I, that’s why I’m calling YOU!” Now of course, part of the humor in this is your delivery, so you may want to practice a few times before trying it live. Another response to the all too common, “It’s not in our budget” objection is “In that case, now is the perfect time to meet! We’ve found it very beneficial to discuss future needs and our solution early so that if you decide to proceed, we can be of help during your decision-making process.” Notice I said, “If you decide to proceed” which implies that you’re not going to shove the sale down their throat, but that the prospect will be making the decision to proceed or not. It’s also a good idea to present yourself as a resource to the prospect, regardless of whether they’re in the market at the moment or not. Then, actually BE a resource for them, even if it means meeting several times, providing valuable information that will help them and offering advice in your area of expertise even if it’s outside of the potential solution you may have to sell them. Another good rule of thumb is to give something of value to your prospect three times before asking for anything in return, like an order. Providing something of value might mean something as simple as sending an email with an article relevant to a recent discussion the two of you had about their needs, or introducing your prospect to another member of your team or resource within your company who can provide expertise, such as an engineer or project manager. If you’re genuinely interested in helping them with their plight, regardless of having the entire solution to sell yourself, your sincerity will become obvious to the prospect and it will only make sense they buy from you when they’re ready to make a purchase. Also, the rule of reciprocity is at play here. It’s human nature to give back to those who have helped us. By helping the prospect first, you set up the dynamic of the rule of reciprocity and they will be likely to reciprocate the favor you’ve done for them, by placing their order with you. Once you’re ready to close the sale, if budget is still an issue, you can discuss payment plans, leasing options, no money down, 90-day payment and other terms that may make your solution more appealing to your prospect. Your willingness to work with them and their budget will increase your chances of ultimately closing the sale. You can also reflect back with the prospect to your earlier discussions about what was important to them which will help build the value of your solution, framing the money issue more as an investment than as a cost. Finally, sometimes the answer is “no,” but you know what? That’s okay too. Part of learning to love hearing “no” is knowing that it’s only a matter of time before you hear the word “yes.” The more “nos” you get, the closer you get to “yes.”

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Terry Connelly: We Have Seen This Stock Market ‘Horror’ Movie Before

April 16, 2012

Here we go again. It’s the second quarter of the year, and once again — as in 2010 and 2011 — the hedge fund investors that missed the rally in the U.S. stock market have rebooted their “sky is falling” pitch to scare the rest of us out of our shareholdings. They do this so they can buy back into the market on the cheap and enjoy the rally that will occur in the second half of the year — just like the previous years. Two months ago, “a few” members of the Federal Reserve Board were favoring a QE. Now, they say it’s just “a couple.” So, one day it’s a strained reading of month-old Federal Reserve Board meeting minutes that concludes that the Board has taken additional monetary stimulus “off the table” because just “a couple” as opposed to “a few” have agreed that action may be necessary. (What if the “couple” happened to be Chairman Bernanke and Janet Yellen, his deputy?). In the end, a couple and a few are the same thing, but the market has overread “a couple.” Curiously, CNBC, the main market news outlet on cable, started promoting this thesis right away (presumably as part of its virulent anti-Obama campaign to talk down the market lest the President’s re-election campaign get any bounce from better stock prices and fatter 401(k)s and sure enough the market went down by triple digits. Then came the monthly jobs report showing only 120,000 net jobs created in March. Clearly a disappointing number compared with the more than 200,000 in February and January, except for the fact that these monthly estimates (which are based on a projection model for a set of interviews with employers, not an actual numerical “headcount”) are always wrong and corrected in subsequent months. On a corrected basis, the QUARTERLY jobs report — a more reliable indicator — shows a step up in hiring for each of the past THREE quarters, rising from 300,000 plus in Q3 2011 to 400,000 plus in Q4 2011 to more than 600,000 plus in Q1 2012. Of course, this data never made it onto CNBC. Then came the hedge fund hit to Spanish and Italian sovereign debt interest rates when the European markets opened Tuesday after the Easter holiday. Here’s how that happens: the hedgies don’t have to actually sell Spanish and Italian government bonds and take losses. All they have to do is bid up the price of credit-protection (the famous credit default swaps (CDS) that helped bring on the U.S. financial panic in 2008) on Spanish and Italian debt. The CDS contracts pay out only if the debt defaults, so a higher price implies a higher risk of default on the underlying debt. When that happens, investors tend to dump the underlying debt, sending the interest rates up. The hedge funds and other big investors know from the past two years of experience that such movements in the CDS markets move the European sovereign debt markets down and in turn, spook the U.S. stock markets into their now famous “chicken little posture.” Translation: you can manipulate the U.S. stock market down by 500 points or more over two or three days just by bidding up a few Euro debt CDS contracts on Italian and Spanish debt! But you won’t hear that on the supposedly informative CNBC. You just hear about the Spanish and Italian interest rate spikes, just like last year and the year before. You also hear about other European sovereign debt at just about this time of the year — after a run up in the U.S. market that some of the “big boys” missed out on. And so, on Tuesday after Easter, we went down 200 more points on the Dow. As CNBC cheers on the incipient “market correction” and puts on a series of chartists warning of free-fall. Just to top it off, the CNBC mavens chat incessantly about the coming downturn in corporate earnings on the first day of Q1 reporting season, quoting of course unnamed experts that earnings will actually fall for the quarter. Never mind that 3/4th of the early reporters — a small but at least “actual” sample — have already reported earnings that EXCEEDED estimate. Never mind that Alcoa, which was panned all day long by the cable Cassandras, actually reported earning revenues and earnings after Tuesday’s closing bell that also significantly exceeded estimates! Are we seeing a pattern here? It’s déjà vu all over again, as Yogi Berra would say. Fool me once, your fault; fool me twice, my fault; fool me three times, well, that’s the lot of U.S. equity traders, as they again fall for the hedge funds’ head-fake apocalyptic scenario in the second quarter, and take the rest of us down with them. What the hedgies and their shills at CNBC count on is the fact that average investors aren’t used to short selling, so they don’t understand that folks who come on TV and talk the market down might actually be “talking their book” just like the typical stock “promoters” they are justly suspicious of. Wise up, stock investors — you are being had, again — by some real pros that count on you having a short memory from the games they played the last two years, at just this time of the year. They, not you, made the money in the second half of the past two years. Wise up!

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Al Norman: Wal-Mart’s ‘Terrifying’ Attack on the First Amendment

April 16, 2012

Cathy Kern is somewhat of a folk hero in North Tonawanda, N.Y. But if you ask folks at city hall, or at Wal-Mart corporate headquarters, what they think of Cathy Kern, you’ll get the opposite response. Over the past six years, Kern and other anti-Wal-Mart activists have filed 5 lawsuits that effectively staved off the development of a Wal-Mart superstore in their community. Ultimately Wal-Mart prevailed, and their huge store is now in its final stages of completion. North Tonawanda (NT) is located midway between Buffalo and Niagara Falls, in Niagara County. There are already 6 Wal-Mart’s within 16 miles of NT, including a supercenter in Niagara Falls 9 miles away. In November, 2006, Wal-Mart submitted an application to the City to construct a 183,000 square foot superstore. In May, 2008, the city’s Planning Commission approved the environmental impact statement, and by September, 2008, the site plan was approved. Kern and other NT residents formed a group called NT First, and filed a lawsuit to annul the Planning Commission’s decision. In June, 2009 the state court did annul the site plan approval, saying that the city was required by its own code to submit a stormwater pollution prevention plan — which had not been done. The court sent the case back to the city to complete. Between November, 2009 and July, 2010, Kern et al. filed three more lawsuits against Wal-Mart, each raising a different point of law. In the fourth lawsuit, Wal-Mart and the City filed a motion to impose sanctions against Kern and her lawyer, David Seeger, for “frivolous” litigation. In September, 2010, Judge Ralph Boniello, III dismissed the fourth lawsuit, and permitted Wal-Mart and the city to seek the sources of Kern’s funding. Boniello ruled that the lawsuit was “filled with re-statements of matters previously litigated and half-truths [and] has only served to further delay the project and cause the Respondents to incur additional legal fees.” Boniello added: “In fact [Wal-Mart and the City] have raised the possibility that such delay tactics are consistent with a national campaign allegedly funded by outside groups whose sole goal is to block Wal-Mart developments.” The Judge ordered Kern and Seeger to produce their funding sources and NT First membership names, or face contempt of court. In a letter dated December 9, 2010 , Attorney Seeger informed the Judge that the group NT First had “terminated its existence,” ended its representation by Seeger, and liquidated its checking account balance of $13.22 — donating it to The Salvation Army. Seeger noted that under New York law, “an unincorporated association’s financial exposure is limited to those assets held by it and for it through its members.” Seeger noted, “The Association, now that it has laid bare its financial records [and] membership lists… has no reason to continue its existence, and no means to afford any further legal representation.” Seeger told the Court that the members of NT First “remain concerned that Wal-Mart, in furtherance of its nationwide campaign to legally attack its opponents, will attempt to force additional disclosures and otherwise terrify its member and officers.” Attorney Seeger warned, “The First Amendment secures Petitioners members’ various First Amendment freedoms including… the right to petition the government for redress of grievances.” Citing the Citizens United case, Seeger wrote: “disclosure of donations and funding is off limits, except upon a demonstration of compelling state interest.” Citing three U.S. Supreme Court cases between the NAACP and the State of Alabama (1959 to 1964), Seeger argued that unincorporated associations are immune from state scrutiny of memberships lists. “At bottom,” Seeger said, “Wal-Mart is not entitled to the requested disclosure, unless there is a compelling state interest overriding the First Amendment Protection.” In June, 2011, a group called The Clean Water Advocates of Western New York , led by Cathy Kern, filed a fifth lawsuit under the Clean Water Act in federal court. This suit was originally filed against Wal-Mart, North Tonawanda, and the N.Y. State Department of Transportation. A U.S. District Court Judge signed a consent decree requiring the NYSDOT to comply with its stormwater permit. To fight her contempt charges, Cathy Kern is now represented by Buffalo civil rights attorney Frank T. Housh. “When Wal-Mart began an illegal, permitless construction of its Superstore,” Housh told me, “North Tonawanda First did what citizens groups are supposed to do: they petitioned the Courts for relief. Their efforts were hugely successful. Wal-Mart and its rubber-stamp local government were forced to get a construction permit, divulge its plans to the public, and follow the procedures in the Clean Water Act.” Housh says because of this success, “my clients have been targeted for reprisal. Put simply, Wal-Mart is seeking the bankruptcy and public humiliation of a woman in her sixties who lives alone with her cats because she succeeded in making them follow the law. They want her ruined life to stand as an object lesson to anyone who believes the rules which apply to everyone else apply to the world’s largest corporation.” Judge Boniello has made it clear, Housh says, that he may order Kern to pay hundreds of thousands of dollars in fees to Wal-Mart’s attorneys. Boniello’s Order was stayed pending an appellate court ruling on the propriety of the Judge’s Order, which should be issued in the next few weeks. In December of 2010 — three months after Justice Boniello’s decision to allow Wal-Mart to pursue NT First documents — the New York Daily News reported that Wal-Mart had donated $10,000 to the Niagara County Republican Committee. NT Mayor Robert G. Ortt, and NT City Attorney Shawn Nickerson — both strong proponents of the Wal-Mart project — are Niagara County Republican office holders. So is Justice Ralph Boniello, III, who was elected to the Niagara County Supreme Court in 2001. As of 2010, Boniello’s salary is $146,700. The Republican Judge is up for re-election in 2014. Wal-Mart has used its legal muscle countless times to appeal local zoning decisions to the county courts, to the appeals courts, and beyond. The corporation has more lawsuits than men’s suits. In North Tonawanda, Wal-Mart’s hounding of local residents for legal fees, membership lists and donor lists, is just another attempt by a 1 percent corporation to chill public participation and to narrow the First Amendment freedoms not just of Cathy Kern — but of citizen activists everywhere across America. Al Norman is the founder of Sprawl-Busters. He has been helping communities fight big box sprawl for almost 20 years. His latest book, Occupy Walmart will be released in early May.

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Javier Garcia-Martinez: Science Deficit

April 16, 2012

The current worldwide economic situation is bringing scrutiny to how developed countries balance their national budgets, and for the scientific community this provides a timely and interesting opportunity to observe how public investment in scientific research and development (R&D) is being either increased or significantly reduced by different countries. Some countries believe that investment in R&D is one to help get out of the crisis; heavily investing in R&D can diversify their economies and increase their competitiveness. For example, France has announced a €35,000-million ($4.6-billion) investment in research. Germany has implemented a 5-percent increase in the budget of its main research institutions until 2015. But other countries are trying to reduce public expending at all costs. Recently, Spain announced a whopping 25.6-percent cut in its budget for R&D. It is interesting to note that Spain is, along with the countries that have been bailed out (Portugal, Italy, Greece, and Ireland), among the countries that spend the least amount in R&D. Conversely, countries that invest more in R&D have very low-risk premiums. It seems that public investment in R&D is the effective recipe against the contagious economic illness that many developed economies are suffering. One could think that at least the markets will react positively to short-term radical measures to reduce national deficits. Unfortunately, for those countries that are dramatically cutting in R&D, although markets will be benevolent to dynamic and competitive economies, they will be merciless to economies with high unemployment rates, lack of opportunities, and brain drain, trends that underinvestment in R&D will only aggravate. A good example was seen when Spain was significantly punished by the markets in the days after announcing these austere but unselective measures on March 30. Just few days later a national call for promoting scientific culture was announced by Fecyt, a government organization devoted to promoting science and technology. A crucial issue is how to convince now-young Spaniards that there is a future in science when there is no money there, and when the leaders of the country have decided that is not a priority. Furthermore, what does this mean for those who already decided to go for a career in science? In the past, companies have been incentivized via tax deductions to invest in innovation, but now many of those incentives are gone. How can we convince others to place a bet on R&D when the leaders of the country have decided that this is something superfluous, something that has to go in difficult times? However, the unprecedented reduction in government investment in R&D is only one of the recent measures announced that exacerbates our “science deficit” and that will impact our ability to create a more competitive and diverse economy in Spain. Since the end of last year, by law, no public institution can hire any new scientist, teacher, or professor, no matter how good, how capable of attracting funding, or how able to create new companies he or she is. This is especially dramatic for the researches under the Ramón y Cajal program, which include some of the most brilliant scholars of Spain, typically between 35 and 45 years old. Sadly, it seems that bright futures for these individuals exist only abroad. Suddenly closing programs that took years to build doesn’t make any economic sense, as the losses and opportunity costs will be far greater than the money saved. Similarly, pushing the best and the brightest away at their best time of their careers after investing so much in their education and training is possibly the worse decision a government can make to recover from an economic crisis. A similar cut has been announced in education (22-percent reduction), which is significantly higher than the average reduction in the national budget (16.9-percent). This is despite the fact that three out of 10 students in Spain are unable to finish the Obligatory Secondary Education (ESO) and Spain is 12 points below the average of the OCDE countries (18 points below in science) in the PISA study. As in the case of public investment in R&D, those countries at the top positions of the PISA ranking are also the ones with lower-risk premiums; more sustainable, competitive, and diversified economies; and better-paid jobs. Research and education seems to act as vaccine against the worst consequences of the crisis, which in the case of the Spain is unemployment, which reaches almost 50 percent for young people. In the U.S., the Obama administration has identified education as one of the key strategies for the future of the country, specifically focusing on the teachers, announcing a nation-wide program to train 100,000 teachers of STEM in the next 10 years. Balancing public budgets is not only necessary but urgent in many developed countries, because their economies are not able to grow at the level that will allow maintaining many public services. However, dramatic reductions in strategic programs and education, and closing the doors to the most talented, will have only limited, short-term budget impacts, and they come at the expense of making it impossible to create conditions that foster growth, competitiveness, and a dynamic economy.

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D. Sidney Potter: Stories From the Frontline: Why Is Mortgage Aid, Hater-Aid?

April 16, 2012

As a continuing topic from the post entitled, “Stories From the Frontline: Robo Signers vs. the Silent Enemy,” the following is a continued look into the operational innards of mortgage operations centers. Why is the banking industry — for the most part, since I personally detest over generalizations, resistant to essentially doing the right thing and/or at least doing it in a timely matter? It is almost fascinating that acclimatization is loathed, rather than embraced. It is not often one gets to be a white knight in the face of such Armageddon-like financial tragedy, but these banking guys in the C-suite found a way to do it without really trying. Sociologists would call that cognitive dissonance. For example, I was engaged a few years back as a mortgage operations consultant for one “Too Big to Fail” bank that shall remain nameless (let’s just say it’s logo is a stage coach), whose loss litigation team had to consist of less than 30 full time members! Albeit, this was back in 2009, and banks were gonna through a deer in the headlights stage in adjusting their operational capacity to meet the massive avalanche of foreclosures coming upon them, but this mind you was a very apparent understaffing at this particular banks’ headquarter location. Out of curiosity and in passing, I asked the vice president in charge of this ‘start-up’ department, where were all the loan modifiers. Her reply, and slightly stunned response, was that they were working on it! Hello, did you not get the memo that the economy just got pierced wide open with a set of vice grips for open heart surgery and that it may have forgotten to administer itself with anesthesia. (Maybe the email went to her junk mail). The silent enemy — who are a form of malfeasant employees, are not necessarily a conniving bunch; and like the poisonous affect a few drops of python venom has on a healthy 200-pound man, so to can a few bad men within an industry that is entrusted in safe keeping our money. In the end, those individuals who work in loss mitigation centers for the banks are to a point, contributorily responsible for the prolonged economic recession. Like the 1977 movie Network , one wants to open a window and yell out “I’m mad as hell and I’m not going to take it anymore.” Mortgage mess, be over already, will you. But ultimately, these loan modifiers who are known as LMs (aka Lone Morons) are good Germans. And good Germans do what good Germans do best, and that is they do what their told. But consequently, they benefit financially by their individual group conformity — and as luck would have it, results in some of them not losing their own home to foreclosure. How ironic. Poetic justice almost sings again. The loss mitigation business, is not the only industry to do well when a mega-disaster hits. I’m not an expert on the histrionics of vaccinations, but somebody had to have made a killing with the onset of the black bubonic plague or even the polio epidemic at the turn of the last century. During and after every disaster there’s clean up to be done. What about German uniform manufacturers (for soldiers and prisoners), in the 1930s and ’40s? And lest we forget about German oven makers in the 1940s. Business most have been brisk. Couldn’t keep up with the demand. And in present day America, watch how many insurance claim adjusters come off unemployment whenever there’s a massive tornado. They call it tornado season for a reason. As a banking professional, you start to fill like you’re in the ‘body bag’ business of the mortgage industry. It doesn’t make what you do anymore digestible knowing that it’s God’s work, depending upon your mindset in which you try to convince yourself that you’re at least helping people. Metaphorically, it’s like being on a parole board and realizing that even though it’s usually a 3 to 5 board vote, your one vote could be the difference in properly adjudicating for the inmate/prospective parolee their future. Hence, some of the mortgage operations consultants — such as myself, take the contrarian point of view that a loan modification applicant ought to be helped, not hurt. For many bankers, the word help is a four letter word. And hence, that is the narrow bandwidth in which you live in — in which you can justify your professional credentials, and your professional wherewith all, and still look another mortgage ops professional in the eye without drawing scrutiny, scorn and contempt from others. And once again, you’d like to think that you’re doing God’s work, vs. the atypical maladjusted mortgage ops professional in the next cube over, whose’ pulling down $2k-plus a week while simultaneously casting judgment over others. For this reason, you come across some (although not nearly enough — since everyone has their best interest in hand), mortgage ops professionals who become the moral equivalent of Supreme Court Justice Anthony Kennedy. You become the swing vote. You become the unseen voice of reason. You become the final arbitrator, who may be able to justify the investigation or non-investigation of a mortgage applicant for suspected fraud. Realizing that another person fate is dependent upon you checking a box off on an intake sheet, or that the approval or denial of a loan modification may affect the uprooting of an entire family, or that because of professional peer pressure you deny a financially healthy loan applicant a cash-out “refi” that he is otherwise entitled to. This can sometimes be a heady undertaking. Without equivocation, you become the final denominator. Quite often, mortgage ops consultants are responsible for Monday morning quarter backing. You act as a referee of what’s just occurred. And sometimes you don’t always get instant replay and/or a commercial break to thoughtfully analyze the situation. In effect, you step atop a pedestal and decide (more or less), to fully adjudicate in your subjective opinion who wins or losses. Almost like Caesar summoning his court and deciding which of two remaining Gladiators to feed to the lions — or maybe both of them, for pure entertainment purposes. Even Caesar loved ratings. Some mortgage ops consultants where unfortunately ex-mortgage brokers who had no compunction, reluctance or guilt in seeing some hard working customers lose their home as a result of a loan modification specialist being short sighted. And in Caesar fashion, raising their clenched fist and pointing their thumb down. Next Huffington Post segment. Stories From the Frontline: Please Tell Me I’m in Kansas.

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Jim Kukral: The New Business Model of Book Publishing

April 16, 2012

I’ve written previously about how Amazon’s Kindle and their KDP Select program is bringing new writers to the book publishing world, bypassing traditional publishers. But sometimes, established writers are finding a new voice there too. Randy Cassingham is one of the first online publishers: his This is True column went online in 1994. It’s his full-time gig: over the years, it has brought him several million dollars in income, and he lives on 45 acres in western Colorado, where he looks at gorgeous snow-covered mountains from his home office. “TRUE” (as Cassingham calls it) is biting social commentary, using weird news as its vehicle. It’s funny and has a loyal following: thousands pay $24/year to get the full column by e-mail each week. Tens of thousands get a free sampler. It might be the first example of an online “fremium” business model. In the early years, he turned down two unsolicited syndication deals to bring the column to newspapers — turning them down because he didn’t want to give up control of his work, he says. Good move: now he’s compiling his archives into Kindle books, where he can get a 70% royalty on sales, rather than the 12.5% that Dutton (part of the Penguin Group) pays him when it turned another of his websites into a book. And it’s working: Cassingham told me that in the first two weeks of Kindle book sales, the five volumes he has posted so far earned more than $1,400 in royalties from Amazon. “I’m boggled,” he told me by e-mail. “Imagine if I actually concentrated on this income pillar. Or had more than five books available. Or I sent one or more titles out for review somewhere, or advertised, or did ANY kind of promotion to anyone other than my existing readers!” Imagine indeed! Then he realized that a throw-away human interest feature he includes in This is True, the “Honorary Unsubscribe” of someone who died in the previous week, could also be good book material. “These are the people you wish you had known,” he says. “Take the inventors I’ve featured. Did you know the same guy invented both the computer hard drive and the video cassette? What a fascinating guy!” He has also featured the inventors of the contact lens, the hovercraft, the Hawaiian shirt, even the guy who thought of putting a peanut inside an M&M. Then, he says, getting excited as he looks through his archive, “there are the medical researchers, responsible for saving thousands, even millions of lives, spectacular entertainers that died virtually forgotten, and…” Just as he says: the kind of people you wish you had known. That book just came out on Amazon’s Kindle this week, and it’s the first of several in that series. Cassingham told me that “I’m glad I have a block of 100 ISBNs” — International Standard Book Numbers, which are used to identify books for retailers, including Amazon — “I’m going to need them.” Cassingham used to have the material now coming out in his books available free in various web archives. He counted on Google’s Adsense program to bring in ad money, but it hasn’t worked as well as he had hoped, even though it’s all original work. “TRUE’s archive,” he admitted, “which had more than five volumes of material, only brought in $559 for the entirety of 2011.” Compared to more than $1400 in the first two weeks on Amazon, it’s no wonder Cassingham is starting to take the archives down. If someone follows a link to an archive page that has been removed, they now see information on what book it’s in — with a link to its Amazon sales page. ( Example ) Self-publisher J.A. Konrath laments on his blog that he wishes he had the rights to his first novels, now that he has sold more than 700,000 copies of his later efforts, self-published on Kindle. Cassingham doesn’t have that problem (not counting his one book with Penguin). His only problem now is getting his existing work converted to Kindle as fast as he can. As more established, quality authors who kept the rights to their work figure out that it’s to their advantage to publish themselves on Kindle rather than beg for contracts from “big” publishers, there will be an explosion of great work available in e-book form. It’s truly the start of a new model of mainstream book publishing. Amazon CEO Jeff Bezos said so pretty much himself in a letter to shareholders last week. Speaking about his Kindle Direct Publishing platform, he said, “The most radical and transformative of inventions are often those that empower others to unleash their creativity – to pursue their dreams. These innovative, large-scale platforms are not zero-sum — they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers.” What do you have to say about it? Please leave a comment.

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Rory O’Connor: Facebook Is Not Your Friend

April 15, 2012

“Imagine… that you knew which sites — or what news stories — people you trust found useful and which they disliked,” David Kirkpatrick wrote in the June 11, 2007 issue of Fortune magazine. “This isn’t fantasy. Facebook might make it possible, and soon. Yes, the social-networking site college kids spend so much time on — the one you thought was just about hooking up — could turn out to be more important than any of us thought.” Kirkpatrick, who was then Fortune ‘s Senior Editor for Internet and Technology, went on to write the best-selling The Facebook Effect: The Inside Story of the Company That is Connecting the World , the definitive book on the company. He was prescient. In a startlingly short period of time, Facebook did make it possible for you to find those trusted and useful news sites and stories — along with much, much more. Now, with Facebook facing growing scrutiny in advance of its IPO next month, which is expected to value the Internet giant at $100 billion, the question of trust looms even larger. True, the social networking giant has made it easier than ever before to find trusted friends and followers, who can now create, curate, aggregate and distribute news and information with an unprecedented ease, as I detail in my new book Friends, Followers and The Future : How Social Media are Changing Politics, Threatening Big Brands and Killing Traditional Media . But is Facebook itself, the billion dollar baby whose rapid growth has yet to be slowed by continuing controversy over the privacy of its more than 800 million users, itself worthy of our trust? Can we rely on its wunderkind CEO Mark Zuckerberg, who has repeatedly pronounced privacy to be outmoded and argued that we are living in a new era beyond it, to safeguard our interests? Despite our differing — some would say competing — concerns, should we regard Facebook and Zuckerberg as our friends? After all, the online social network, which offers its tools, technologies, and services at no cost, makes profit primarily by using heretofore private information it has collected about you to target advertising. And Zuckerberg has repeatedly made sudden, sometimes ill conceived and often poorly communicated policy changes that resulted in once-private personal information becoming instantly and publicly accessible. As a result, once-latent concerns over privacy, power and profit have bubbled up and led both domestic and international regulatory agencies to scrutinize the company more closely. In one case, consumer protection groups, including the Electronic Privacy Information Center (EPIC) and fourteen others, filed a 2009 unfair-trade complaint with the Federal Trade Commission (FTC) accusing Facebook of unfair and deceptive trade practices that “violate user expectations, diminish user privacy, and contradict Facebook’s own representations.” It said that Facebook’s decisions to disclose previously restricted “personal information to the public” had violated users’ expectations, diminished their privacy, and contradicted its own representations. It asked the FTC to order the company to “restore privacy settings that were previously available… and give users meaningful control over personal information,” to investigate Facebook’s trade practices, require the company to restore privacy settings that were previously available and force it to “give users meaningful control over personal information.” Facebook settled in November 2011 by agreeing to refrain from making any further deceptive privacy claims, to obtain consumers’ approval before changing the way it shares their data, and to undergo independent third-party auditing for 20 years. Shortly after the uproar subsided, however, renewed concerns over privacy and trust began to shake the brand again. This privacy blunder centered on Facebook’s belated admission that it was still tracking the web pages its members visited, even after they have logged out of the Facebook site. As Daniel Bates reported for the Daily Mail , The social networking giant says the huge privacy breach was simply a mistake — that software automatically downloaded to users’ computers when they logged in to Facebook ‘inadvertently’ sent information to the company, whether or not they were logged in at the time. Most would assume that Facebook stops monitoring them after they leave its site, but technology bloggers discovered this was not the case. Instead, the tracking information — worth billions of dollars to advertisers — was being sent back to the Facebook servers. Even after you were logged out, Facebook still tracked every page you visited. As Bates noted, “The admission is the latest in a series of privacy blunders from Facebook, which has a record of only correcting such matters when they are brought to light by other people.” As its executives struggled to explain the “inadvertent” privacy row over its “creepy” web-tracking practices, that trust was shaken once again “by criticism and speculation regarding how it uses browser cookies to get data about users,” as Josh Constine posted on Insidefacebook.com . A lack of thorough documentation explaining what each of its cookies does has led some observers to assume that the company is tracking offsite browsing behavior in order to target ads. Facebook needs to provide explanations for both the average user and privacy researchers about how exactly its cookies work in order to prevent these press flare-ups from giving users a negative impression and bringing on regulatory scrutiny from governments. The company’s growing stature and importance only magnifies such concerns. As Facebook profile pages morph more and more into overall online identities, the inherent tension between our individual desire to protect personal information and the company’s need for that information comes into ever-sharper focus. Last week, for example, Facebook sought once again to address the persistent criticism of its privacy practices by instituting a new policy providing greater transparency on the types of data it stores about you. Yet critics like Max Schrems, a German law student who filed a complaint leading to the agreement, still criticize the company’s response. “We welcome that Facebook users are now getting more access to their data, but Facebook is still not in line with the European Data Protection Law,” Schrems told Kevin J. O’Brien of the New York Times . “With the changes, Facebook will only offer access to 39 data categories, while it is holding at least 84 such data categories about every user.” In 2011, when Schrems requested his own data from Facebook, he learned that the company was keeping information he had previously deleted from the website, and was storing information on his location. None of that sounds too friendly to me, so I really can’t recommend that you trust Zuckerberg, or Facebook, or indeed any corporation that makes its money by selling you — down the river or anywhere else. And as Nielsen’s Latest Global Trust in Advertising Survey proves, we trust “word-of-mouth recommendation from friends and family” above all other forms of communication. (At least that’s what 92 percent of respondents in 56 different countries said .) At the same time, our trust in paid traditional media (including television, magazine and newspaper ads) has steadily declined since 2009. (Trust in television is down 24 percent; magazines, down 20 percent; and newspapers down 25 percent, according to the survey.) “Consumers around the world continue to see recommendations from friends… as by far the most credible,” said Randall Beard, global head, Advertiser Solutions at Nielsen. Trust is essential for the success of any brand. Mark Zuckerberg may think that Facebook’s recurrent privacy flaps haven’t much affected the sometimes anti-social social network, but they represent a huge potential threat to what he has built. The high-handed manner in which members’ personal information has been treated, the lack of consultation or even communication with them beforehand, Facebook’s growing domination of the entire social networking sphere, Zuckerberg’s constant and very public declarations of the death of privacy and his seeming imposition of new social norms all feed growing fears that he and Facebook itself simply can not be trusted. As Zuckerberg’s fellow CEOs from the legacy media should have already learned, losing the trust of your audience is the first step in losing your audience itself — and eventually the power of your brand.

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Martha Burk: Equal Pay — Will We Ever Get There? An Interview With Lilly Ledbetter

April 15, 2012

April is the month every year when the paychecks of women working full-time, year-round catch up with what men earned by the previous December 31. This year it’s April 17. There are a number of causes for the pay gap, including job segregation (so-called “men’s jobs” pay more than “women’s jobs”) and the fact that working moms are often seen as less serious or less reliable, despite solid evidence to the contrary. But plain old sex discrimination plays a big part. Lilly Ledbetter found out the hard way after 19 years at Goodyear, when she learned she had been underpaid all along compared to men doing the same job. She sued — and won in lower courts. But the Supreme Court overturned 40 years of precedent when it ruled against her in the now-infamous Ledbetter v. Goodyear case, saying she should have complained earlier — even though she didn’t know about the discrimination. The Lilly Ledbetter Fair Pay Act restoring the previous standard (a victim has 180 days to complain beginning when she learns about the discrimination) was the first law President Obama signed. Ledbetter’s new book Grace and Grit chronicles her struggle and the aftermath. I interviewed her this month for my radio show Equal Time With Martha Burk . MB: When did you go to work for Goodyear? LL: I was hired in 1979. There were 5 of us in the group, 2 female. MB : How did you find out after 19 years that you were making less than the men doing the same job and in some cases with less seniority? LL: An anonymous note — a little piece of paper with my salary and 3 male co-workers. I knew it was correct, because my numbers were there to the penny. The first thing that hit me was devastation, humiliation. Then I thought about how many hours of overtime I had worked and not been compensated for what I was legally entitled to, and how hard it had been on my family struggling to pay the mortgage, education, doctor bills. We had done without quite a bit. And this was not right. I didn’t know how I could through my 12 hour shift. MB : Did you leave the plant and go home? LL: No, I finally got my composure. Halfway through my night shift it hit me. My retirement, my 401(k), and someday my Social Security all were dependent on what I was making — and that’s another tremendous loss. MB : Did you go to the company and complain? LL: I had already been to the company recently, because there were rumors, and I wanted to know where I stood. They told me “you’re just listening to too much B.S.. Your salary is fine.” Later my lawyer found out that for many years I had been paid below the minimum for the job I was doing. MB : It had to be a hard decision to file a suit, and risk retaliation or even getting fired. LL: Yes, I thought about it. But I decided I could not let a major corporation do me this way, and not stand up for myself. I went straight to the Equal Employment Opportunity Commission closest to my home. MB: You’ve said that one of the most important pieces of advice you can give to women in this situation is “don’t hold back, tell the investigators as much detail as you can, and document as much as you can.” LL: That’s absolutely correct. It’s very hard — you feel like you’re being a complainer and a whiner, and that’s actually the reputation you get when you do file a charge. But you should open up and tell everything. I was shunned by co-workers. MB: You were transferred to another job where you had to lift heavy tires all day. You were over 60 years old. Wasn’t that retaliation for filing the charge, which is against the law? LL: Yes, but I lost that part and also an age discrimination complaint. MB: The State of New Mexico has a rule that any company applying for a state contract has to file a gender pay equity report showing pay statistics for men and women in each job category. Would that have helped you? LL: Absolutely. I thought because Goodyear was a federal contractor they would be following the law. But that turned out not to be the case, and I couldn’t find out. MB: What would your advice be to women who might be considering filing a complaint? LL: Do your research on salaries in your area. Do not take anything for granted, and document everything. Discrimination is alive and well today. You cannot afford to work any length of time accepting less money, because you can never catch up. Listen to the full Lilly Ledbetter interview here:

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Mark Engler: ALEC Annoyed at Losing Sponsors? It Breaks My Heart

April 13, 2012

It is a myth that Gandhi said, “First they ignore you, then they laugh at you, then they fight you, then you win.” But that old saying nevertheless carries a lot of truth when it comes to social movements. And it is always a pleasure to see a worthy target of activism move from disregard or mockery to going on the attack. Therefore, I was happy to see the right-wing American Legislative Exchange Council (ALEC) release a half-defiant, half-pathetic statement bemoaning the “coordinated and well-funded intimidation campaign against corporate members of the organization.” Its statement reads : ALEC is an organization that supports pro-growth, pro-jobs policies and the vigorous exchange of ideas between the public and private sector to develop state based solutions. Today, we find ourselves the focus of a well-funded, expertly coordinated intimidation campaign. Our members join ALEC because we connect state legislators with other state legislators and with job-creators in their states. They join because we support pro-business policies that promote innovation and spur local and national competitiveness. They’re ALEC members because they’re more interested in solutions than rhetoric…. At a time when job creation, real solutions and improved dialogue among political leaders is needed most, ALEC’s mission has never been more important. This is why we are redoubling our commitment to these essential priorities. We are not and will not be defined by ideological special interests who would like to eliminate discourse that leads to economic vitality, jobs and fiscal stability for the states. After about the third reference to “job creators,” it’s hard to miss that this is an operation nestled snugly within the depths of the far-right echo chamber, never passing over a chance to frame tax cuts for the top 1 percent as a moderate, bipartisan path to common bliss. In fact, far from sticking to promoting “improved dialogue,” ALEC has (with troubling effectiveness) advanced a slew of reactionary measures in statehouses throughout the country. Stand Your Ground? Check . Prison privatization? Check . Right to Work? Check . Discriminatory Voter ID laws? Check . The list goes on and on . These legislative outrages have inspired a coalition of progressive groups to fight back. They are going after the companies that are paying $25,000 annual dues to this far-right outfit — exposing these brand-sensitive patrons for aligning themselves with the conservative fringe. The tactic is proving very effective. On Wednesday, fast-food giant Wendy’s joined McDonald’s in ending its ALEC membership. Previously Pepsi, Coke, Kraft, Intuit, and the Bill & Melinda Gates Foundation all announced that they were jumping ship. This exodus is what prompted ALEC’s response. That organization complaining about a “well-funded, expertly coordinated” political operation surely merits placement in the pot-calling-the-kettle-black hall of fame. But these words serve as high praise for the organizations that have endeavored to expose the group’s corporate funders. Prominent among them is ColorOfChange.org , which has quickly established itself as a leader in the field of corporate campaigning. I previously lauded ColorOfChange.org for its successful effort to strip Glenn Beck of advertisers after the demagogue (then at Fox News) said that President Obama harbored a “deep-seated hatred for white people or the white culture,” among other batshit-crazy statements . Few in the mainstream media wanted to give the boycott credit for ousting Beck, preferring to believe that the cable news personality had simply outstayed his welcome on the network. Beck himself was not about to acknowledge activists’ impact, just as Kraft now says that it is leaving ALEC for a “number of reasons” — none, of course, related to the tens of thousands of signatures pouring in from ColorOfChange.org and allies such as the Progressive Change Campaign Committee . This is exactly what you would expect. Wendy’s, for its part, says that it didn’t renew its ALEC membership not because of pressure but because it “didn’t fit our business needs.” That, in the end, is a pretty good definition of the purpose of corporate campaigns — making businesses decide that it doesn’t “fit their needs” to attack workers, reinforce institutional racism, wreck the environment, or undermine the social safety net. In any case, it certainly doesn’t fit the needs of the rest of us. Cross-posted from the “Arguing the World” blog at Dissent magazine.

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Soraya Chemaly: Ann Or Hilary: Either Way, Motherhood Is a Dismal Financial Decision for American Women

April 13, 2012

BREAKING NEWS GUYS: It is ” arguable ” that one of the single worst financial decisions a woman can make in this country is to become a mother. Regardless of whether she gets paid for work that she does. And one of the most disastrous economic growth policies governments can pursue is to impede women’s ability to plan their families and be paid fairly for their participation in the labor force. And yet this is exactly what the Republican party is dedicated to doing. The result of “secondary” in importance “social issues” is to ensure that stay-at-home or not, women pay and pay and pay for their reproductive choices or lack thereof. Today’s cynical Hilary Rosen/Ann Romney “Gasp!” is nothing more than this week’s politically flavored sexist-media-loves-a-”cat”-fight . What is “working woman” versus “stay-at-home” code for? For the most part it is code for “what is a woman’s relationship to a man and what is his earning potential?” It’s a paternalistic, sexist framework that subordinates women either way. That’s why this is not about a mommy war. It’s about keeping women dependent, especially by DEvaluing the work of women who are mothers and caretakers (in and out of the home) — their time, their labor, their productivity — by making balancing work and family as hard as possible. It’s the way we penalize women for taking on the bulk of our society’s reproduction responsibilities while simultaneously telling them “it’s the most important job in the world.” You want to create jobs, stimulate and grow the economy? Stop harassing and penalizing women seeking independence and financial security. Allow people to plan their families and create systematized, institutional and cultural approaches to work/life balance for both men and women. What I am not hearing anyone say loudly and clearly in this Rosen/Romney snafu is that women’s ability — not desire or choice — to take part in the economy, to be productive in the economy, to help stimulate the economy is based on her freedom to make reproductive decisions or lack thereof and on the more active, unpunished by culture, participation of men in child care. Motherhood in America , taking place as it does in a vacuum of cultural, corporate and governmental support, and idealized as part of a paternalistic, heterosexual and gender-hierarchical social structure, is why women — most of whom have to earn a living either as supplemental or primary — have to stop working, work part-time, and cycle in and out of the work force. It’s why we have a debilitating gender pay gap — really a maternal pay gap when you examine it closely — and why women make up the majority of the poor. Consider these facts: Women make up more than 50 percent of the American workforce . 40 percent of wives earn more than their husbands . Women are more and more often heads of households, now 22 percent . The highest earning window for women, practically the only time they are not subject to the wage gap, is when they are single and childless, usually in their twenties. They have to live in cities and have gone to college. More than 50 percent of children born to women under 30 are born to single mothers . 60 percent of women with children under the age of three and 77 percent of mothers with school-age children remain in the workforce . When a woman has a baby, her chances of being hired go down , compared to a single woman, by 44 percent. When a woman has a child her pay drops by 11 percent . According to the Bureau of Labor Statistics , mothers works fewer hours, have to work part time more and cannot take on overtime. Fully 55 percent of stay at home moms would like to work , for pay, out of the home. Working mothers are penalized in terms of long-term success by having to work in an interrupted fashion that perpetually erodes their career tenures or experiences. The distribution of retirement income is gendered and unbalanced. If a woman “chooses” to be a stay at home mom, because entrenched pay discrepancy, cultural habits and a gender segregated workforce make that “choice” the most logical and financially rational, she is not compensated, either through pay or benefits, for her investment of time and effort and risks her long term financial security. This is why money is not ” more important to men ” and why bickering about mommy wars is a red herring. Ignoring demographic trends because they erode your privileges (which is different from being oppressive) does not make them go away. Mitt Romney and Republican legislators would like us to focus on what really matters to women. Ann Romney, because apparently women are either a different species or speak a form of English that Mitt et al. cannot understand in their particular female-deaf form of manliness, has assured them that, based on what she is hearing, it’s “the economy.” So — let’s talk about women, work and the economy. First , women’s work is often invisible and unpaid . Let’s pretend that Ann Romney is, like the 143 million other women in the country, not the wife of a multimillionaire Mormon Bishop and talk about her unpaid work as a stay-at-home mom. According to the Wall Street Journal , an average housewife would make $138,095 if she were paid for her labor (that is what she would have to pay someone else). Ann Romney is not your average housewife, but, let’s go with it. Ann Romney’s lost wages for 30 years of providing 24 hour unpaid childcare for her husband, running a household, nursing sick children, being a chauffeur, food shopping, cooking, being executive assistant to six boys and men and other assorted duties is $4,142,850. She also did this, graciously, while struggling with major illness. Ann Romney, like all “non-working” mothers, is not financially compensated for her labor. (She is however, also like other married women who work, taxed for her efforts.) Many women in this position are thought of as parasites and a net drag by abusive husbands . In addition, Romney gave up any hope of related benefits for social security, for example, and put her trust in Mitt Romney’s long-term good graces. For women involved in the 50 percent of marriages that will end in divorce , however, this is a terrible economic scenario. For unmarried women or those depending on dual incomes to survive, this is also not an option. For women not married to a multi-millionaire Mormon bishop — that would be well over 99 percent of the 142 million of the rest of us — the real costs of being an unpaid, full-time, hard-working stay-at-home mom is too high. I don’t begrudge Ann Romney her choice. She has not only put her financial well being but also her salvation into Mitt Romney’s hands. But that is not either available or desirable to the overwhelming majority of women. Second , family planning is the key to financial survival and security. Around 50 percent of pregnancies currently in the U.S. are unplanned (it’s a side effect of not teaching people how they get pregnant). Why do women seek abortions? Studies have shown that it’s because they have families and are more often than not financially strapped, tired, responsible for children and/or other family members, trying to improve their lot in life. It is because pregnancy and motherhood affects a woman’s health and healthcare costs, child and child-care related expenses, her pursuit of higher education, her ability to work productively and for financial gain, her ability to parent other children, her chances of relying on the state help for support and her risk of long-term poverty. You know what the real entitlement program I worry about is? The fact that the reproductive control experiences of the people advocating anti-family friendly policies is primarily limited to the changing of the temperature of their tighty-whiteys . You know what the opposite of PLANNED parenthood is, UNPLANNED parenthood. And you know what that costs to women, families, the government, and “the important economy” will be when they increase as they will if the Republican Party leadership has its way with women? • More unplanned pregnancies than virtually anywhere else in the industrialized world • An increase in abortions (whether safe and legal or not) • Decreased maternal health • Decreased relationship stability • Lower educational aspirations and accomplishments for women and their children, impaired female workforce participation • Increased health care costs related to poor prenatal and neonatal care • Increases in welfare program participation • Higher maternal death rates. It is safe to assume that unplanned pregnancies and reduced maternal health have the effect of reducing women’s workforce participation and reducing the social and economic status of women and children with all kinds of impacts on market stimulation, economic growth and government spending. By the way, poor, sick, tired and dead women cannot contribute to what is “really important” — that would be “the economy.” Third , gender equality, which requires reproductive freedom, justice and autonomy for women, means INCREASED ECONOMIC ACTIVITY. Women’s ability to plan and manage their pregnancies — with or without men — spurs economic growth. This is true all over the world. Countries with high gender equity indices usually have stronger economies because they understand the value of the human capital that women represent. As noted here , “In mature economies, attitudes toward gender equality and the actual possibilities for combining parenthood with gainful employment are decisive. Countries governed by traditional male-dominant attitudes run the risk of long-term economic stagnation.” If you do not support a woman’s right to choose when to become a mother, and you actively seek to deny her reproductive health options and reduce her ability to be paid fairly for her work, then you actively work against economic growth and prosperity, for individuals, families and the country. If you insist on modeling economic policy on an outdated, sluggish, pater-familia model then you will get an outdated, sluggish mater-familia bashing economy. The “less important social issue” policies — “getting rid” of Planned Parenthood, eliminating abortion, reducing access to contraception and affordable healthcare, abstinence-only miseducation, and more — through which Mitt Romney and the Republican party are eliminating women’s options (and therefore their families options) are an ECONOMIC DISASTER. In these ways Mitt Romney and the Republican party are committed to infringing on all women’s ability to live freely and healthily and to making sure that women continue to be penalized for their maternity to the detriment of families and THE ECONOMY.

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Joanne Lang: Breaking Free From Fear of Failure

April 13, 2012

As a start-up founder, I’ve come to expect new and interesting experiences on a regular basis. It’s part of what makes being an entrepreneur so exciting. Not long ago, James Logan, Program Director for the Chester County Chamber of Business & Industry , asked me to be the keynote speaker at their Annual Small Business Dinner. I’d never given a keynote before, and like many people, I find public speaking a bit unsettling. However, another wonderful aspect of being an entrepreneur is the amazing support I regularly receive from those around me. After a lovely lunch with Nancy Keefer, the Chamber President, and James, I was so buoyed by their enthusiasm and encouragement that I accepted their invitation to speak. I decided to use this opportunity to reflect on my entrepreneurial experiences over the past year. I wanted to identify lessons learned that would be useful in both the corporate and start-up worlds and I realized that the most important and valuable lesson I had to share was breaking free from fear of failure and embracing the opportunity to learn from failure. Because I think these lessons are worth sharing with others, I’ve included excerpts from my keynote below. Several years ago, I had a big idea that originated from my direct experiences as a mom of 4 children: While I used LinkedIn to organize my career and Facebook to organize my social life, there was no single, private and secure application to help me quickly and easily organize my family and home life. At the time, I was a member of SAP’s original cloud technology team, and I was convinced that Software as a Service was the answer. However, in order to turn this idea into a reality, I had to take the plunge from a safe, senior position at SAP to the unknown waters of a bootstrapped start-up. Because I was the primary income earner in my home, this was a difficult and risky move to make. So what stopped me from pursuing my idea at that time? Fear of failure. Sharing my idea with naysayers just furthered this fear. I’ve heard Arianna Huffington refer to the obnoxious roommate in her head, and this was exactly how I felt. Everyone who discounted my idea fueled the obnoxious roommate in my head that made me doubt myself and fear failure — especially in regard to competing with large, well-established companies like Google. And of course, there was the state of the economy to consider. Then my son had a life-threatening medical emergency and I could not give the paramedic the information he needed. I thought my son was going to die and I felt like a failure as a parent. My son is fine now, but that experience taught me new way of thinking — a positive way of thinking. Instead of worrying about failure, I began to think, “What if this will work?” I put the perceived risks into a perspective that made sense to me: “What is the worst thing that can happen — will it hurt my children?” Once I kicked out that obnoxious roommate in my head, I achieved things that I would never have imagined. My idea, AboutOne, now has partnerships with Microsoft and Suze Orman. We’ve closed a Series A for $1.8M led by an amazing investment group called Golden Seeds , and I’m part of the 6% of women in tech who have received venture capital funding. I was featured in a documentary film about start-up life called CTRL+ALT+COMPETE . In order to find the repeatable models necessary for my start-up to grow quickly, I had to learn that if you are not failing you are not trying enough new things; I had to learn to encourage my team to celebrate and openly share failures so we could learn from those lessons. When I look back at my previous corporate job, I realize that I never failed and I now wonder if that was really a good thing. I wonder if CEOs of large companies should allow their teams to fail, and to celebrate those failures as opportunities to learn and improve. Entrepreneurial opportunities in the US are fabulous. Because of this, AboutOne has been able to help millions of people quickly and easily organize their family and home lives, even when they feel that they are too busy or don’t know how to get started. I’ve also been able to show my children that if they work hard and have faith in themselves, they really can live their dreams. As a mother, I feel these lessons about breaking free from fear of failure and embracing the opportunity to learn from failure are as important for my boys as they are for my company and myself. Originally posted on Joanne’s blog, Notes from the CEO

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Alan Jenkins: Racial Discrimination by Banks Only Worsens the Foreclosure Crisis

April 13, 2012

Is there a house in your neighborhood that everybody hates to walk past? You know, the one with broken and boarded up windows, trash left to gather on the lawn, and grass so overgrown it’s becoming a habitat for rodents? If you have a house like that in your community, you know it’s more than just an eyesore. Neglected, vacant houses depress property values throughout the community, and can threaten health and safety. They erode the sense of community and stability that creates vibrant localities, and they hamper economic resiliency. With a national foreclosure crisis still in full swing, such houses are all too common. You might be surprised to learn, though, that if you have problem properties like that in your neighborhood, there’s a good chance your absentee neighbor is a bank. More shocking still, banks are neglecting houses they own in minority communities even more frequently — much more frequently — than those they hold in white communities. A detailed, undercover investigation unveiled last week by the National Fair Housing Alliance and several regional partners shows not only that banks too frequently fail to maintain foreclosed properties that they own, but that they tend to neglect their properties in communities of color at a much higher rate, with devastating consequences. A large number of the neglected, bank-owned properties have broken or missing doors and windows, inviting vandalism and trespassers. And many have safety hazards that endanger the public. Those and other defects are significantly more prevalent in bank-owned properties located in communities of color. Another finding is that, on average, the banks are not marketing houses located in communities of color as aggressively to individual homebuyers as they do properties in white neighborhoods. The properties in white neighborhoods are, for example, more likely to have clear and professional “for sale” signs. When banks both poorly maintain and poorly market foreclosed houses, the properties tend to stay vacant longer and to eventually be sold to speculators, rather than to people who would make the houses their home. The discriminatory differences are stark. In Dayton, Ohio, for example, 60 percent of bank-owned properties in African American neighborhoods had broken or unsecured doors, compared to only 18 percent in white neighborhoods. In Atlanta, properties in African American neighborhoods were almost five times more likely than homes in white neighborhoods to lack a “for sale” sign. And in Dallas, 73 percent of the bank-owned homes in predominantly non-white neighborhoods had trash on their properties, while only 37 percent in white areas did. Neighbors of all races who live near foreclosed, bank-owned properties, the investigation found, are pulling together to keep them presentable — doing maintenance the banks should be doing, like mowing lawns and removing trash. But in communities of color, neighbors reported seeing home improvement contractors working on those properties at only half the rate seen by neighbors in predominantly white areas. The bank behavior identified by this investigation is unethical, unlawful, and harmful to our economy. It breaches our basic national values of equal opportunity and the common good. It violates the Fair Housing Act of 1968, signed 44 years ago this week in the wake of Dr. Martin Luther King Jr.’s assassination. And it is holding back our economic recovery by, among other things, depressing home prices and hampering sales. It’s hard to know all the reasons why banks are discriminating in this way. Bias and unfounded stereotypes about minority communities and homes, however, are a likely root cause. The investigators controlled for 39 race-neutral factors like building structure, water damage, and curb appeal, so the different treatment is indisputably about race, and not class or other home or neighborhood characteristics. This investigation should be a wake up call for banks, regulators, local governments, and the neighbors of these bank-owned properties. Among the solutions identified by the National Fair Housing Alliance are anti-discrimination investigations by the Consumer Financial Protection Bureau and other enforcement agencies, making information about bank-owned properties more publicly accessible, and prioritizing buyers who will occupy these properties over speculators who may warehouse them. As Americans struggle together toward a lasting economic recovery, good neighbors are more important than ever. It’s time to remind America’s banks that this includes them. Cross-posted from Race-Talk .

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Bianca Bosker: Why A Picture Is Worth $1 Billion: Instagram Has Moments, While Facebook Has Memories

April 13, 2012

Facebook just spent $1 billion to acquire Instagram , the 554 day-old company behind an app that, at least on the surface, offers everything you can already get on Facebook, only with filters that make drab photographs look pretty. You can post photos, “like” the pictures other users have shared, or leave comments on friends’ images — just like you can on Facebook. So why would the Godzilla of social networks bother itself with this gnat of an app? Understanding Facebook’s Instagram affair means starting with the simple fact that the app mastered an activity that makes up the heart and soul of Facebook: sharing photos among friends. There’s a key difference between the two social services, however, and one that has made Instagram’s images worth a thousand words to its users and $1 billion to Facebook . While the images on Facebook are an archive, the images on Instagram are alive. Facebook showcases memories — last week’s wedding, dinner, birthday, vacation — while Instagram frames moments — the tulips you just passed, the sun hitting a building during your morning run, or the bizarre quote you saw on a talk show. Designed from the ground up for our phones, not our laptops, Instagram has, more gracefully than Facebook, leveraged the simple fact that we have a camera in our pockets more often than a pen to create an outlet for images that are intimate and immediate. It taps into our desire to share and be seen, but lets us do so exclusively via images, which require less thought than text to both post and process. There’s no fiddling around with a mini keyboard, no danger of typos, and less risk of offending. The barebones design — five clicks and you’re done — makes it blissfully simple to abide by Instagram’s unspoken manifesto: share now, share often, and share something lovely. And with the knowledge that there’ll be a new delicacy every time we check back, Instagram keeps us coming back regularly for more. Instagram is also a storytelling app, one that speaks to our fast click nation’s growing addiction to visual status updates that are beautiful and of the moment. Facebook understood early on that if you control how people share photos with each other, you control how people share stories with each other — and if you control that, then you control social. By bringing Instagram into the fold, Facebook is better positioned to tap into the photo sharing we do “in the moment” and safeguard its status as the web’s photo album and teller of stories about people. The Financial Times ‘ Duncan Robinson recently marveled that Facebook had spent $1 billion to buy an app “used mainly by hipsters to take photos of their lunch – in sepia.” Robinson’s jab actually helps explain what’s so compelling about the app, and it’s no coincidence that same critique was leveled at Twitter in its early days, when it was dismissed as a forum for chatter about meals and bathroom breaks. Like Twitter, Instagram offers real-time access to the lives of the people who matter to us, and next to their constantly updated feeds, the pace of new posts in Facebook’s News Feed appears positively glacial. Having missed its shot at snapping up Twitter, Facebook may be again trying to nail the insta-update with Instagram . The power of pretty can’t be ignored, either. On the whole, Facebook photos lack the dreaminess of Instagram’s snapshots, as well as the focus on our surroundings, rather than ourselves. Scrolling through my Instagram account reveals images of a lavendar bouquet, a dog lounging at the beach, and a metal subway panel reading “hope.” Instagram belongs to an increasingly popular cohort of sites, including Pinterest, Tumblr and Svpply, that provide a platform for us to share pictures that inspire and amuse — and, quite often, aren’t of us. What I wrote of Pinterest holds true for Instagram: It’s “look at this,” not “look at me.” On Facebook, that’s rarely been the case. Say what you will about filters — they deliver some delicious eye candy. And while perusing photos on Facebook inevitably makes me feel that I was left out of whatever get-together I see, Instagram just feels good. It offers an entry point into a world where everything is lovely and, quite frequently, seen through rose-colored glasses. In an age of information overload, it feels good to get a brain vacation from Facebook and see our friends’ “wish you were here” images. A professor at the University of California Berkeley recently found that even automated text messages reminding his patients to “reflect on positive interactions” could make them feel more cared for, connected and supported . Instagram, which largely showcases “positive interactions,” also stands to soothe the soul. It seems hard to put a price on that.

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Matthew Kavanagh: Transformative Development: How Jim Yong Kim Might Change the World Bank

April 13, 2012

Since President Obama nominated Dr. Jim Yong Kim as President of the World Bank commentators have weighed in on his past writings, his nationality, his part in upholding an unjust U.S. domination of the Bank, and his qualifications. But at the heart of this presidential decision is a fundamental question of focus and mission for the World Bank. Jim Kim represents a break from the past — as both his supporters and detractors agree — and would surely steer the Bank in new directions. Interestingly, so too might Dr. Jose Antonio Ocampo, the Columbian economist and former UN official, leaving for the first time two heterodox candidates to head one of the World’s most fraught institutions. What seems to be unsaid in discussions of Dr. Kim, however, is that the new direction is likely toward a focus the stated mission of the bank: the elimination of poverty. A Focus on Delivering Development Dr. Kim’s career gives us a fairly clear understanding of what he would prioritize as World Bank president. He would be, without question, more expert and experienced in development than any World Bank president since its inception. He led the World Health Organization’s 3×5 initiative that, as the journal The Lancet notes , “helped change forever the way we thought about AIDS.” Most recently he’s run the Ivy League Dartmouth College. But it is in founding Partners in Health and more recently in pioneering the field of “delivery science” in global health that we see where Kim would take the bank and the fight against global poverty. At Partners In Health, he and the other pioneering physicians worked to break the mold on medical care in impoverished settings — bringing world-class medicine to people when the general wisdom said it was neither feasible nor “cost effective.” Again and again, Dr. Kim and PIH proved the dominant voices in the development community wrong — showing, for example, that anti-retroviral treatment of AIDS in Africa and the Caribbean could succeed when leading economic and development experts said it was not practical or did not meet the economic conditions ” test for action .” Now some of these same economists are campaigning against Dr. Kim. But to imply, as some have, that Kim’s experience is somehow limited to charity shows a willful misunderstanding of what is unique about Partners in Health. The group’s outlook is medical, but where Dr. Kim has worked in Rwanda, Haiti, Peru, and the former Soviet Union they have managed to transform communities: building and staffing schools, training and (against the development grain) paying community health workers through effective employment strategies, and building community-based research for development. Later Kim brought experts in business, economics, and health together to create the Global Health Delivery Project and the Dartmouth Center for Health Care Delivery Science to bring rigorous study to the actual delivery of health care to impoverished communities. It is in this work that we see what Dr. Kim is likely to do quite differently than other candidates as World Bank President: focus on community-level development in education, health care, infrastructure, and employment and take transformative practices to scale to change nations. And in doing so, he and others have shown that when people demand drugs or doctors or classrooms, well-done health and development can transform the relationship between people and government. To some observers this may seem obvious — isn’t this the raison d’etre of the World Bank today? And yet it is at the heart of a question about the Bank’s future. Challenging Bank Orthodoxy The stated mission of the World Bank is poverty reduction and achieving the millennium development goals on health, education, food, and sustainability. But at the heart of the fight over the future of the Bank has been the word “growth,” which appears nowhere in that mission or in its public description of itself. Long time Bank insiders and orthodox publications like the Economist have taken to challenging Kim’s credentials. Kim, they say, isn’t sufficiently focused on pure economic growth. They cite his suggestion that increases in Gross Domestic Product and corporate profits have often failed to trickle down to poor communities. But in 2012 is this really a question? Who but the most committed neoliberal economists believes that growth alone will end poverty? And to be fair, Dr. Kim has responded to his critics agreeing that, “Economic growth is vital to generate resources for investment in health, education and public goods.” But he clearly has a vision beyond GDP. Here we see the real decision in the 2012 World Bank Presidency race: a vision of the World Bank focused on community-level development results vs. a Bank focused primarily on GDP growth. Only for those who believe in the latter are folks like Larry Summers or PepsiCo’s CEO Indra Nooyi ” better qualified ” for the job than Dr. Jim Kim. For the GDP-purists, Dr. Ngozi Okonjo-Iweala is a better pick as a U.S.-trained free market, growth-oriented economist who spent over twenty years working at the World Bank. And yet during this time the Bank too often failed in exactly the areas the bank is supposed to be focused on: poverty reduction, health, and the Millennium Development Goals. For example: The most recent ten-year evaluation showed that three quarters of World Bank health programs in Africa failed by their own unambitious measures and a recent report suggest the Bank is remains focused on short-term domestic-only financing for health that undermines efforts to halt infectious disease. In the Bank’s education efforts “fewer than half of projects have succeeded in achieving education quality, labor force, management, learning, or efficiency objectives.” At the International Finance Corporation, the arm of the World Bank dedicated to the dubious mission of fighting poverty through financing “companies and other private sector partners” only 13% of IFC policies even had any objectives related to people in poverty. The majority (60 percent) of their advisory programs actually delivered no identifiable benefits to society, let alone to the poor. Why? Because despite rhetoric to the contrary, the Bank’s focus has often drifted from achieving development for people living in poverty. The World Bank’s failures have not been lack of focus on economic growth, but a lack of focus on delivering results to communities it claims to serve. What the Bank needs is someone willing to have audacious goals, to use the bully-pulpit of the World Bank to push for pro-poor policies, and to work to transform a massive institution into an effective institution for impoverished communities. The next Bank president will need to transform the agency’s ideology and practice and move the thousands of staff and consultants along with them. We need an expert in delivering development and cutting through policies that have failed in the past. Dr. Jim Yong Kim’s track record shows he can pull off exactly that. Regardless of the outcome this presidential decision will portend change at the Bank: a serious candidacy by Ocampo and Okonjo-Iweala challenging U.S. dominance is only positive. And hopefully a merit-based selection process will emerge in which the World Bank’s board actually debates the who and the how of delivering for communities. For many of us, though, the key question is who will actually challenge the ways of doing things at the Bank.

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Daniel Burrus: Stop the Presses: The Future of Newspapers

April 12, 2012

According to the  Newspaper Association of America ,  2011 was not a good year for newspaper advertising , with total revenue down 7.3% — almost $2 billion, and a percentage point more than the previous year’s loss. To be blunt, that’s not surprising. In fact, what is surprising is that it was only down that much. Let’s face it, newspaper publishers still haven’t quite understood how to maximize and leverage the digital world, and thus increase their advertising revenue. The newspaper business is, unfortunately, focused on the second word, “paper,” instead of the first word, “news.” As a result, they are still making their online news static rather than dynamic, meaning that it is still one-dimensional. The online versions of most newspapers are nothing more than a piece of paper online. A better approach is for newspaper publishers to give us an online version that’s a two-dimensional experience. They could give us interactive maps, videos, audio interviews, and the ability to actually go to the news site and take a look with a live cam. For example, recently where I live in Southern California there were  several big boats that caught fire in a marina.  All I saw in the newspaper’s online reporting was a written article about the fire and a picture. What could they have done? They could have given me video footage. They could have set up a live feed and let me take a look at the fire in real time. They could have given me an audio feed to the reporter covering the fire so I could get off-the-cuff comments that were not a part of the written story. They could have given me some additional interviews. These are just a few suggestions for how newspapers can make their information truly dynamic so we can start thinking digital and stop thinking paper. Also, why isn’t the newspaper getting more social? Local newspapers are about local news. Yet I don’t see that social component appearing in most outlets. In the newspaper world, that could be very innovative, since so few of them are doing it currently. Am I saying that newspapers should stop doing a print version and focus solely on online? Of course not. You need both. The paper version is a way to hook people. People see it, pick it up, look it over, and get hooked. The online version is usually the option for long-term fans. So we still need both, but they don’t need to be identical copies of each other. So let’s finally get rid of that paper-based newspaper idea. It’s time to make the online newspaper more dynamic, more interactive, and more social. It’s time for newspaper publishers to shift into the communication age so they gain more readers and advertising dollars. Article first published as  Stop the Presses: The Future of Newspapers  on Technorati.

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Jan Mazurek: The Climate Post: U.S. Energy Department Says Peak Travel Season Could Cost Drivers 6% More

April 12, 2012

Gasoline prices have edged off the pedal in recent days, but the Energy Information Administration this week released new data showing motorists will pay about a quarter more per gallon during peak travel season — April through September. Prices will top out at $4.01, on average, in May. The last time gasoline spiked to such levels was 2008, causing a much different reaction from motorists in part because prices had shot up 35 percent in just six months. While escalating gasoline prices are driving some folks to hybrid dealerships , only a few models offer a speedy return on investment . With the exception of the Prius and Lincoln MKZ, and the clean-diesel Volkswagen Jetta TDI, most clean-car technologies take more than a decade to pay owners back. Rising oil prices are feeding a population boom in North Dakota, with the town of Williston holding the distinction of fastest-growing town after its population rose 8.8 percent in about a year. Economists surveyed by CNNMoney say the economy can handle the current high oil prices of around $100 a barrel, but that a further spike in oil prices triggered by a confrontation with Iran could be one of the biggest threats to the economy . Smoggy City Makes Strides in Clean Air Mexico City only a few years ago rivaled Los Angeles and Houston as a smog capital, but thanks to air-scrubbing innovations such as vertical gardens and a popular bicycle sharing program , the city is becoming a leader in green efforts. Although California is slipping in the smog and air toxics categories, the state topped a list ranking states’ preparedness to address such challenges as rising sea levels that a warming world portends. Alaska, Maryland, Massachusetts, New York, Oregon, Pennsylvania, Washington and Wisconsin also ranked high. Realclimate.org reports that scientists’ predictions about human-caused climate change pushing the mercury up were on target. What’s more, a warming planet may be bad for bunnies threatened by the loss of sagebrush habitat and snow, where they hide from predators. Tennessee, meanwhile, enacted a law that would let teachers challenge climate change and evolution in the classroom. Energy vs. Environment A new slate of clean and renewable energy initiatives — part of the long-term “Operational Energy Strategy” aimed at reducing the military’s dependence on fossil fuels — was announced this week . The Obama administration aims to build three gigawatts of solar, wind and geothermal power capacity on U.S. military installations by 2025. The Army, meanwhile, is building fuel cell and hybrid vehicles . Actor Matt Damon has signed on to The Promised Land a film critical of hydraulic fracturing, or fracking. Meanwhile, promoters of the pro-fracking film FrackNation are raising funds on Kickstarter . Outside of Hollywood, the Department of the Interior is poised to propose guidelines governing fracking on public lands. For those opposed to fracking for fear that natural gas will diminish demand for renewables, the Center for American Progress says that in the long term, the two are not necessarily in opposition, with renewables becoming increasingly competitive as natural gas production nears a peak sooner than some might predict. A new energy poll says 61 percent of Americans said they’d be more likely to vote for a presidential candidate backing more natural gas. The same study concludes many Americans — six out of 10 — are unfamiliar with hydraulic fracturing. Payouts related to the BP oil spill, the largest in history, have recently increased four-fold . Texas, a recipient of some of the funds, announced plans to spend its money on long-term coastal conservation . Oil drilling in the Gulf is expected to see its biggest year since the 2010 spill, with predictions for eight more oil rigs, even though signs of the disaster’s effect on the environment still remain. India has forbidden its airlines from complying with a European Union law that went into effect Jan. 1 that charges airlines using European airports for their carbon emissions. Indian Environment Minister Jayanthi Natarajan called the requirement a “deal-breaker” for global climate change talks. Scientists have finally extracted sunlight from cucumbers. No, not really, but in a 2011 essay Vaclav Smil used the fictional cukes from Jonathan Swift’s 1726 novel Gulliver’s Travels to make a point about today’s serial infatuations with “it” technologies — simple solutions to complex energy problems. Bloomberg’s Eric Roston suggests that President Obama’s “all of the above” strategy — which consists of various “it” technologies — would do well to “focus not on our infatuations with particular energy sources but on the market in which they operate.” The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions .

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Zaid Jilani: As Donors Flee, Corporate Front Group ALEC Whines That Critics Are Trying to "Eliminate Discourse"

April 12, 2012

At least six major corporations and foundations — Coca-Cola, Pepsi, McDonald’s, Kraft, Intuit, and the Bill and Melinda Gates Foundation — have now left or have pledged to leave the American Legislative Exchange Council (ALEC), a secretive corporate front group that works to pass legislation in all 50 states. The corporations are leaving largely thanks to protests by activists and consumers outraged that ALEC has been pushing voter suppression and “Stand Your Ground” laws that harm American communities. Yesterday morning, ALEC sent out a panicked press statement complaining of an “intimidation” campaign that is trying to “eliminate discourse”: ALEC is an organization that supports pro-growth, pro-jobs policies and the vigorous exchange of ideas between the public and private sector to develop state based solutions. Today, we find ourselves the focus of a well-funded, expertly coordinated intimidation campaign. Our members join ALEC because we connect state legislators with other state legislators and with job-creators in their states. They join because we support pro-business policies that promote innovation and spur local and national competitiveness. They’re ALEC members because they’re more interested in solutions than rhetoric.  At a time when job creation, real solutions and improved dialogue among political leaders is needed most, ALEC’s mission has never been more important. This is why we are redoubling our commitment to these essential priorities. We are not and will not be defined by ideological special interests who would like to eliminate discourse that leads to economic vitality, jobs and fiscal stability for the states. A much more accurate re-write of one of those statements would read like this: Our members join ALEC because we connect state legislators with other state legislators and with the biggest campaign donors in their states. They join because we support pro-Big Business policies that promote the bottom lines of special interests and spur local and national donations by Big Business to our organization. They’re ALEC members because they’re more interested in profit than principles. ALEC loves to claim that it is simply advocating for small-government, conservative ideas. But its agenda isn’t that of the free market but rather one of its Big Business donors. It has in the past gotten state legislatures to pass laws stopping local governments from enacting their own municipal broadband systems and banning them from deciding to use their tax dollars to pay living wages to contractors. These laws are not designed to promote the free market or small government. They have only one goal — padding the profits of ALEC’s corporate members, even if small government principles are discarded in the process. ALEC claims that its critics are trying to “eliminate discourse.” That’s nonsense. We here at Republic Report love the discourse about ALEC that is occurring in town squares, Internet forums, social media, and corporate boardrooms all over America. We and our partners have sought to engage in this discussion with corporations sitting on ALEC’s Private Enterprise Board. Everywhere, Americans are asking why corporations are pouring so much money into this secretive organization that has such a harmful impact on their lives. And when groups like Color of Change call on corporate donors to leave ALEC, they are not utilizing Big Government but rather their own right to free speech — and the right to use their own money as they see fit in a free market — to change America. The campaign to hold ALEC responsible represents the best combination of free speech and the free market. ALEC hates that, but that’s because ALEC doesn’t stand for the free market or free speech at all. It stands for an America where Big Business can secretly write our laws. And increasingly, even Big Business is learning that a relationship with ALEC may be unprofitable. This story is adapted from a post originally appearing on Republic Report .

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Robert Pagliarini: How You Can Better Influence People

April 11, 2012

I’ve always been fascinated by FBI profilers. Those are the folks who get inside the heads of criminals to try to figure out why they do what they do. There is a great deal of power that comes from being able to quickly analyze someone to determine what they are all about — think about how useful this could be for a life coach , therapist, or manager. There are numerous tools and techniques to help you analyze someone. Popular ones include the Myers Briggs Type Indicator and DISC Assessment , where you try to classify someone’s personality. Then there are numerous books on interpreting body language, analyzing eye movement, and even decoding handwriting. The most accurate method I’ve discovered for assessing what drives another person is based on ” human needs psychology ,” a theory of human behavior developed by Tony Robbins . Yes, that Tony Robbins — the one who has directly impacted more than 50 million people through his books, tools, and live events ( watch Oprah Winfrey do a firewalk at a Tony Robbins event ). Human needs psychology provides an answer to the elusive question, “Why do human beings do the things they do?” The theory says that there are six fundamental needs that everyone has in common (every person includes your mother-in-law, President Obama, terrorists, you, and everyone else.) And here’s the best part — because we all share these same needs, once you can decipher which top two needs someone values more than the others, it instantly gives you an edge in knowing what drives them and how to influence them. Here are what Robbins’s theory postulates as the six human needs: 1. Certainty. The need for stability, security, comfort, and to feel confident you can avoid pain and gain pleasure. 2. Uncertainty/variety. The need for change, new stimuli, and for the unknown. 3. Significance. The need to feel important, special, unique, or needed. 4. Love/connection. The need to belong and to feel closeness with someone or something. 5. Growth. The need to expand, learn, and grow. 6. Contribution. The need to give beyond oneself and to support others. Do you think you should communicate differently with someone whose No. 1 need is “certainty” than if his or her top need is “significance?” If your goal is to build rapport, nail that interview, or get funding for your venture, I sure hope so. The question becomes, “How can you discover someone’s top needs?” To answer that, we go to Mark Peysha, CEO of Robbins-Madanes Coach Training , an online company that teaches leaders, therapists, and others how to quickly and efficiently create lasting change with their clients or employees. The training is based on a framework created by Robbins and Cloe Madanes, a renowned teacher, one of the originators, of the strategic approach to family therapy. According to Mark, there are three basic ways to understand another person’s top needs: 1. Ask them. This is obviously the most straightforward approach. People are fascinated by the concept of the six human needs, and they love an opportunity to talk about what matters most to them and how they perceive what’s important. 2. Observe what they focus on. Is the person focused on safety and comfort, or are they more driven by the need to stand out? Do they seem to crave connection, or do they crave variety and entertainment? Listen to what they communicate and watch for what they value. You can learn a lot by the process of elimination. 3. Contextual. It’s best to observe someone in more than one environment. When people go into certain situations, you can learn a great deal from how they respond — their top needs will often rise to the surface. So how can you use human needs psychology? Get practice profiling people you already know. Look at their communication and behavior through the lens of these six needs. Ask yourself which needs are most important to this person. Get practice looking for and identifying needs in others so it becomes a habit and so you can get the edge in knowing what drives them and how to influence them.

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Jerry Chautin: Don’t Abolish SBA; Mills Says Her Agency Is Faster, Quicker, Better

April 11, 2012

Once upon a time, the U.S. Small Business Administration made direct loans to socially and economically disadvantaged small-business people. The SBA’s direct lending programs also targeted disabled veterans and others that politicians said deserved preferential treatment. What’s more, the agency required applicants to get turned down by two banks as a prerequisite to applying for its loans. The paperwork was voluminous, and it took many, gut-wrenching months to get a deal done. That was during the 1960s and ’70s, and yet the myths persist. With the exception of disaster lending , SBA has morphed into a loan grantor to mitigate some of the risk for its banks. The lenders underwrite the loans and make the credit decisions without the government imposing underwriting leniency for disadvantaged applicants. The timeline from application to closing is not much longer than for a conventional business loans. “The paperwork is actually not very much,” Karen Mills, the SBA’s administrator said, during an in the interview for a March 27 article in the New York Times . “Our turnaround time for loans is 10 days.” When delays do occur, it is often because the borrower is having difficulty assembling financial statements and other documentation requested by the lender. “Banks are working with mostly their own documents” for SBA loans, Mills added. “Our role is to provide access and opportunity.” As a hypothetical example, she cited, “The bank says the last two years have been a little tough, you don’t quite meet my standards.” But rather than turning down an existing or prospective client, “that’s when they use the SBA guarantee,” Mills explained. The SBA was there to give banks the comfort they needed to begin lending again when they were recovering from the Great Recession, according to a Feb. 3 column in Forbes Magazine . The agency was front and center as an important part of the Obama administration’s $1 trillion Recovery Act. The legislation temporarily increased the loan guarantee on SBA 7(a) loans to 90 percent from its typical 75 percent. As a result, lenders made more loans, and in some cases, accepted borrowers with lower credit scores, less cash invested and softer collateral than they would have approved otherwise. Newtek Small Business Finance , a non-bank, SBA lender, contributed the column to Forbes . “We believe that there are approximately $60 billion in outstanding balance of 7(a) loans,” the column said. “The funds are invaluable to small businesses that receive long term (7-25 year amortizing loans) with fair interest rates.” The SBA’s 7(a) program, for example, provides up to $5 million in working capital, equipment financing, acquisition funds to buy a business and real estate financing for owner-occupied buildings. That includes hotels and motels, daycare centers, manufacturing businesses, service businesses and most types of businesses. And yet, some legislative ideologues and conservative groups would rather abolish the agency than spend taxpayers’ money to boost its small business loan-guarantee programs. The programs put the full faith and credit of the federal government in loans that would otherwise not have been made. In many cases the non-chain, neighborhood restaurant, dry-cleaner, and even the McDonald Fast-food franchise that we have all come accustom to patronizing, would not exist. Furthermore, these businesses create jobs and stimulate the lackluster economy. One more myth needs to be laid to rest. The SBA does not give grants to small-business owners . An exception is for technical research and development . The SBA’s Small Business Innovation Research and Small Business Technology Transfer Research Programs offer grants directly to qualifying small businesses. SBA also gives grants and low interests loans to its licensed microlenders . In turn, the microlenders, such as Asheville, North Carolina-based Mountain BizWorks , makes small-business loans from $5,000 to $50,000. “The amount of money microlenders have to lend went from around $120 million in 2008 to $340 million now,” Mills says. “They provide an enormous amount of technical assistance,” in addition to making loans. In my opinion, some of SBA’s programs should be reformed or eventually phased out. But its lending programs are an essential part of our economy. Because without SBA, small-business ownership would founder. Jerry Chautin is a volunteer SCORE business mentor, business and real estate columnist, blogger and SBA’s 2006 national ” Journalist of the Year ” award winner. He is a former entrepreneur, commercial mortgage banker, commercial real estate dealmaker and business lender. You can follow him at www.Twitter.com/JerryChautin Copyright © 2012 Jerry Chautin — All rights reserved Huffington Post readers are permitted to distribute with attribution to the author

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Sandy Abrams: Mompreneurs: Should You Consider a Franchise?

April 11, 2012

This may be the year of the entrepreneur, but does that include franchising? Brenda Dronkers says: Yes! There are so many reasons that right now is a good time to buy into a franchise. For women in particular, there are so many low cost as well as home-based franchise brands. In the past, it seemed that franchising was geared more for the brick and mortar, high investment, high strung entrepreneurs. However, these days, with options like tutoring services, food trucks, home services and so many other industries adding a low cost franchise opportunity with flexible work schedules, it is primetime for women in franchising. Brenda Dronkers knows about franchising. She’s the founder and former president of Pump It Up, the Inflatable Party Zone. Founded in 2000, she grew it to what is now the largest children’s recreational franchise system in the country. She sold majority ownership in 2007 after sales hit $70 million. Brenda’s kids were 4,9, & 11 years old in 1999 when she attended a church carnival. There were two big inflatables in the church warehouse that were by far the most fun attraction at the carnival. Kids would wait in line to jump up and down for a few minutes then swing around to get right back in line again. Brenda found herself awestruck in two ways. The first was that both her youngest and oldest kids were both completely enthralled with the inflatables. Usually her kids weren’t entertained with the same activity since they were seven years apart. Secondly, she realized that because these were inside, there was no weather issue allowing for year-round fun and parties. Without a college education or biz experience, ten weeks after this aha moment, Brenda opened her first Pump It Up. If you are considering buying a franchise, Brenda recommends that you ask yourself these questions: Can I follow training and directions easily? Can I follow someone else’s system requirements? Am I a multi-tasker? Can I fund the franchise until it is up and running successfully? Last but certainly not least… Do I have my family’s support? If you answered yes to all of those questions, then franchising may be for you. If in fact it is, Brenda suggests these questions be asked of a potential franchise: How long has the franchisor been in business? What kind of ongoing support will the franchise offer? Does the franchise have a solid growth plan? How do the rest of the franchisees like working with the brand? How much freedom does the franchise give you? Brenda describes how she managed to balance mom & biz when she first launched: When I began PIU, my children were 4, 10 and 12. When hubby was at the firehouse, I took them with me to the PIU when I had parties booked. I had an office, and I taught them all to make goodie bags (free child labor, except for all the ‘goodies’ they grabbed). I brought a TV, books, toys and made a play area/homework room for them. This lasted for about six months, and then I was able to hire a manager to work the parties. I did the rest of the business from home. Many moms, if given the chance, would choose to work from home once they have their baby like I did. As moms, we have this amazing way of being able to balance our home and business life. It will take some practice, but it can be done. For many moms franchising can be an effective, flexible, rewarding and supportive business option. There are lots of franchise systems set up by franchisors that are focused on targeting women who want to work from home. Out of the approximate 3,500 franchise opportunities, Brenda says that about 1,000 are home-based options. She recommends the following franchises for mompreneurs who prefer to be home based: Games On the Go: This is a mobile RV that travels to birthday parties and events. The RV is full of retro games, such as Pac Man, Donkey Kong and more It has a very low start-up cost and is designed to be run from a home office. Stroller Moms: This is a franchise that trains you to host stroller fitness classes in your neighborhood. This is not only a great source of revenue, but the mompreneur actually makes friends and can take her baby to work! Bark Busters: This franchise will teach its franchisee to train dogs. So, if you love dogs, what a great way to get out of the house, and run your own business as well. Home Helpers: If you love senior citizens, you may love Home Helpers. The franchisee of this franchise work’s from home, making appointments to visit and assist senior citizens…o n your own schedule! Brenda talks about the benefits of going with a franchise as opposed to starting your own similar type of biz: When you invest in a franchise, you are investing in a proven business model. I was very blessed that PIU was a hit. According to About.com, studies show that franchises have a success rate of approximately 90 percent as compared to only about 15 percent for businesses that are started from the ground up. The increased probability of success usually far outweighs any initial franchise fee and nominal royalties that are paid monthly. Also, many franchises participate in women’s funding opportunities, or have pre-registered with the SBA to avoid lending issues. Franchising is amazing. But not all franchises are created equal. If you decide to explore franchises, be sure to use your talents as a woman…practice discernment and use your intuition as you speak to these franchise brands. Any doubt, find another brand. There’s such a variety of options available and if you spend enough time researching, Brenda is confident that you will find the right business match. You too can then jump for joy!

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Sara Hanks: Now the Really Hard Work Begins

April 11, 2012

With the ink still drying on the just signed JOBS Act, we are witnessing a new phase in America’s economy that will democratize access to capital and change the landscape for investors. This new period will look like “the wild, wild West” now that the law is unleashing the power of the Internet to allow citizens to invest in startup businesses. That’s what’s known as crowdfunding, something previously limited to non-profit groups or businesses promising non-monetary returns. The technology community is positively giddy about this development, which will expand the pool of investors dramatically and reduce entrepreneurs’ dependence on established financial institutions for access to capital. Now, the really hard work begins as the Securities and Exchange Commission begins writing the rules governing crowdfunding. Just as websites that will facilitate crowdfunding (known as “portals”) build out their physical infrastructure to be prepared for when the rules are adopted, we must also work on building a moral infrastructure too. Yes, moral. That’s because this is an entirely new form of capital market, and the tech community and excited entrepreneurs should acknowledge that while we all have new opportunities, there are new responsibilities too. Everyone who worked hard to bring this revolution to life will now have to work even harder to make sure it is not rife with fraud. If that were to happen, it will die an early death. For crowdfunding to succeed, entrepreneurs, investors, and regulators will all have to cooperate. But the SEC has the hardest job of all the players (full disclosure, I worked at the SEC for four years). The SEC rightly has serious reservations about companies at the most risky stage of development pitching securities to the most vulnerable investors on the basis of minimal disclosure that no one has vetted. And if things go terribly wrong, who will be blamed? The SEC. So the crowdfunding industry has an obligation to work with the SEC to ensure that investors understand just what they are getting into. We also need to make a special effort to work with groups like AARP and faith organizations to protect older Americans and those who are most vulnerable to fraud and affinity scams. In return, the SEC should be amenable to Congressional wishes that it adopt crowdfunding rules in a timely manner and not impose additional costs and burdens on crowdfunding intermediaries. In particular, the SEC’s registration process for portals should be timed so that registration could coincide with final adoption of the crowdfunding rules 270 days from the time President Obama signed the legislation into law. The responsibility lies not just with the SEC, however. Funding portals will need some form of due diligence to weed out bad actors whose only business is ripping off investors. The company I founded, CrowdCheck, will employ securities attorneys to perform due diligence on startups to make sure they are who they say they are and help entrepreneurs navigate disclosures and filings. We will be part of the crowdfunding community that seeks to keep a level playing field for both investors and start-ups, and we hope other crowdfunding portals will take that responsibility seriously as well. Start-ups must feel responsible to their investors and to the community that has fought for crowdfunding because we believe it can work. Entrepreneurs need to transparently define what they are offering, and be very clear on those terms and how they will handle relationships with their “crowdholders.” And venture capitalists need to help the crowdfunding industry work out how best to help companies graduate from crowdfunding to venture capital funding. Since the Internet has already democratized media, shopping, and social networking, it was only a matter of time before it disrupted our old model of financial investing. My hope is that angel investors and venture capitalists will be creative and embrace this new marketplace as well. Most of all, citizen investors need to take a lesson from the playbook of professional investors and treat it seriously. Investors have a moral obligation to actually think before they invest. They can’t act as if they are buying lottery tickets. Get informed, watch out for fraud, and fund those who most deserve a shot at the American dream. Crowdfunding does embody some of the most important aspects of what makes America American: entrepreneurialism, passion, risk, and a desire to give everyone a chance to show what they can do, no matter what their background. But it only works if we apply other American virtues: hard-headed realism and intelligent investing.

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Richard Komaiko: The Ultimate Irony of Groupon

April 11, 2012

Just yesterday, a Pennsylvania class action lawyer, Howard G. Smith, filed a class action lawsuit against Groupon on behalf of all shareholders who bought in during the infamous IPO. The complaint alleges that Groupon misrepresented or failed to disclose information that they had an obligation, under Securities Laws, to share with prospective investors. According to MarketWatch , “no class has been certified” at this time. Here’s what that means in plain language. When large numbers of people have been harmed in the same way by the same defendant, each of them could file a lawsuit on their own, which is very expensive. Alternatively, they can merge all of their lawsuits into one, which totally changes the economics of litigation. All of a sudden it becomes very cost effective to sue, because the overhead of the legal fees is defrayed over large numbers of plaintiffs. Needless to say, it’s in the interest of the plaintiffs to do this, but courts are cautious about when they should and should not permit it. When the court decides to permit it, that’s called certifying the class. The principal factor that courts look to when deciding whether or not to certify a class is the number of people who come forward to announce that they believe they have been wronged. And often times, these types of law suits can sink or swim depending on whether or not the class gets certified. In other words, the fate of Groupon literally depends on whether this class action lawsuit “tips.” The irony is just too delicious… This post originally appeared on AttorneyFee

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Hulya Aksu: Women in the SoLoMo Boardrooms

April 11, 2012

Those of us who pay attention to marketing trends have all probably heard the term “SoLoMo” by now. Companies are encouraged to appeal to a hyper-connected and technologically savvy, new consumer base through the use of social, local and mobile applications. Seems like a no-brainer. What entrepreneur wouldn’t want to utilize sites like Facebook and take advantage of the ever-progressing and near-universal use of mobile technology to promote their businesses? The problem is that the SoLoMo is missing something that is in many respects also a no-brainer. The Wo(men)! There is more. Women are the savviest of savvy tech junkies, whether they know it or not. Consider the illuminating data compiled by Aileen Lee in her March 20, 2011, TechCrunch post, ” Why Women Rule the Internet .” In it she states, Comscore, Nielsen, MediaMetrix and Quantcast studies all show women are the driving force of the most important net trend of the decade: the social web. Comscore says women are the majority of users of social networking sites and spend 30 percent more time on these sites than men; mobile social network usage is 55 percent female according to Nielsen. Women are not only outnumbering men in social media usage, but they are spending more time on the social sites that they visit. The importance of women consumers to businesses is only amplified when we take into account that women also control family budgets — the purse strings. Lee also tackles this point: In e-commerce, female purchasing power is also pretty clear. Sites like Zappos, Groupon, Gilt Groupe, Etsy, Pinterest and Diapers are all driven by a majority of female customers. According to Gilt Groupe, women are 70 percent of the customer base and they drive 74 percent of revenue. And 77 percent of Groupon’s customers are female according to their site. These are profound numbers. Women are fueling the economy as we know it. So if we are such avid users and are socially connected, then why are we not among the founders and the leaders of the companies that serve us? I publish Modern DC Business Magazine and in our latest issue we covered the burgeoning technology startup scene in Washington D.C. This year, I was also invited to be a part of a private group of hand selected CEOs that represent the technology community of Washington D.C. While I did meet women who are leaders in their companies, our numbers in boardrooms sadly did not mirror our dominance on the web. I am unfortunately a minority as a publisher and technology startup founder. Recently, I was a part of a startup pitch contest at one of the most prestigious law firms in the D.C., and the room was filled with Angel investors and venture capitalists, along with 12 companies’ founders eager to score the cash they needed to catapult them into mainstream success. As I quietly sat in my chair waiting for the presentations to start, a man, who upon making eye contact with me exclaimed: “Wow, we don’t see too many women at these events!” How illuminating, I thought. But he was right. I was one of the few women present at the event. One of the women presenting entrepreneurs could not hide her excitement when she saw me in the audience. Yes, another one of us. At risk of sounding too dramatic, I couldn’t help but draw similarities to a bygone era when companies were encouraged to sell products to minorities but not hire them into leadership positions. You obviously can’t mandate companies to hire women into their executive teams or flick a switch and have women spontaneously establish technology companies. But things can be done now to ensure that future generations of women will have access to the highest levels of success in the boardrooms of America. Encouraging young girls to enter the sciences and entrepreneurship early could be a good start. But there needs to be an overall shift in the way we think about women in leadership before any reform can actually take root and be meaningful. Companies too, can make a difference, and can do so in the short term rather than waiting for a generational shift in priorities. SoLoMo companies can begin hiring smart and qualified women into leadership roles to help better communicate and connect to the women who keep these companies afloat. It is time to be an “uncool” company if your boardroom doesn’t represent your consumer’s demographic representation. That would be a good start, and who knows, it may perhaps serve as a smart strategy in other industries as well.

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Robert Shiller: 10 Ways Finance Can Be a Force for Good

April 11, 2012

The finance profession gets maligned after every financial crisis. The anger is especially strong now, after the most recent financial crisis, which began in 2007, and the anger that is felt about it goes far beyond the Occupy Wall Street movement. The crisis is often viewed as more than an unfortunate accident, but as a revelation of an underlying moral fault. Of course, some people in finance are evil, but that is true in every walk of life. Maybe the wrongdoings of financiers loom especially large in our imagination, since some in finance make so much money doing it. We naturally want a more equal society where most people feel fulfilled and sense a basic respect from others. But, we have to think about how achieve that kind of equality without disrupting our goals or disturbing our standard of living. Moving forward from here, we need to think about how we can make finance work toward a society that is both comfortable for all of us and stimulating and forward-moving as well. In my view, doing that means tinkering with some of the financial institutional structures so that they work better for everyone, and expanding the scope of finance to cover more of our risks and activities. That means enlisting the help of people with financial expertise. Throwing a lot of financial people in jail or shutting down financial institutions are not on my list. In my new book Finance and the Good Society (Princeton) I advance some ideas how this can be done, in our new information-technology-rich society: 1. Advance the benefit corporation. From the initiative of the nonprofit B Lab, the first law allowing benefit corporations was created in Maryland in 2010, and now eight states have them. A benefit corporation is a for-profit corporation that has some additional social or environmental purpose other than just making profits. Each benefit corporation can define its own purpose and will attract its own kind of idealists as investors. My guess is that this new idea will turn out to be a winner, that will yield some of our most profitable corporations because of the employee and community support they will inspire. The amazing example of Wikipedia, with its unpaid authors, shows how public purpose can motivate people. 2. Create what I am calling, in my new book, participation nonprofits, nonprofits that might run schools or hospitals or the like, but that raise money by selling shares to the public. Such a firm pays dividends from its profits into a special account in the name of the shareholder. The shareholders get a charitable tax deduction for making the investment, but can use the dividends in the account only for further charitable contributions, including purchasing shares in participation nonprofits, or can spend them on themselves in some predefined emergency situations such as a medical crisis. With participation nonprofits, charitable giving will be more fun for the donors, for they could watch their money grow and feel their influence grow with it, if they invest wisely, fulfilling a natural human need for stimulation and appreciation. For example, the Wikipedia Foundation might have been even more successful if it had been set up as a participation nonprofit, and found some revenue opportunity associated with their mission. Instead of operating on a shoestring of the mere 75 employees it has today, I’ll bet it would have received many billions in donations by now, which it probably could use for a much expanded social purpose. 3. Create what I am calling continuous-workout mortgages, mortgages whose contract specifies from the beginning that the loan balance will be reduced in contingencies like a decline in home prices or a severe economic recession. In the current crisis, we are hampered by the fact that few troubled homeowners are getting workouts on their mortgages. This has been a significant factor in the severity of the crisis, since people who are underwater on their mortgages are not likely to spend, or to move to take a new job. Workouts could be not only preplanned but also made continuous, responding day by day to every change in the economic situation of the homeowner. 4. Get risk-management markets for real estate risks going on a high level. In 2006, my colleagues and I worked with the Chicago Mercantile Exchange to launch the world’s first futures exchange for single-family homes. The market is still going, though trade is very weak. But the CME Group has just launched new options on home prices, which may rekindle the market. If this initiative does not work well either, we need to come up with another initiative to make these markets work, which will enable private mortgage issuers to use them as risk management devices so that they can do such things as create continuous workout mortgages without taking on unacceptable risks by doing so. The financial crisis might largely have been prevented if we had such markets. 5. Empower lobbyists on behalf of the 99%, the people who make up all of the population except the very wealthy. There is nothing wrong with lobbyists per se, for they give needed information to lawmakers. Every interest group should have lobbyists, including the working class and the poor. Financial lobbying is especially important since lawmakers cannot be expected to have expertise on difficult financial concepts. The problem has been that the financial lobbyists have grown dramatically in resources in recent decades, while other groups’ lobbyists have not. Supporting a better balance of lobbying efforts needs to be emphasized. 6. Advance the cause of risk management for the very poor. There are billions in the world today whose survival depends on subsistence farming. Farms ought to be able to insure their crops against failure due to bad weather. Traditional crop insurance has not worked because crops are difficult to verify and there is thus a moral hazard problem. Now that weather reporting is more detailed, and now that agronomists better understand the relation between crops and weather, we can base insurance on the weather changes that affect crops. The take-up by farmers of such insurance has been slow, despite demonstration programs sponsored by the World Bank and other donors. We need to experiment more with marketing forms until we get these right. 7. Create more sophisticated forms of public debt. At the present time, national governments tend to rely exclusively on conventional debt to finance their deficits, in contrast to companies who use both debt and equity as well as a plethora of other financial devices. A simple first step would be for governments to sell shares analogous to the shares in corporations that are traded on stock markets. My Canadian colleague Mark Kamstra and I have proposed that governments with deficits, instead of borrowing more now, start selling what we call trills: each trill promises to pay a dividend equal to trillionth of GDP each year to the owner, in perpetuity. Investors who are optimistic about GDP might love these investments, and governments would then find that they are cushioned against financial crises like the present crisis since their required dividend payments decline then. 8. Create tradable social policy bonds. The idea, first articulated by Ronnie Horesh in New Zealand, is for governments to create bonds that pay out if some specified social policy objective, such as an increase in public awareness of some important issue or a decline in some specified crime rate. By creating such bonds, an incentive is created for private sector initiatives to solve them. An entrepreneur can profit by buying the bonds and taking steps to solve the problem. The entrepreneur does not have to wait to profit until the day when the policy objective is finally met, for, if these bonds are traded on public markets, the price of the bonds will tend to increase in anticipation of the fulfillment as soon as the prospect is apparent. 9. Create an inequality indexation scheme in the tax code. We would pass a law now that specifies that taxes will be indexed to inequality: tax rates on higher incomes will be automatically raised at any future date when inequality surpasses a specified threshold level worse than it is today. It should be politically much easier to create such a contingency plan now, to be triggered only at a future date if some specified level of higher inequality is reached, than to raise taxes later after such inequality is a reality and a political constituency for the newly rich is created. Just as, with fire insurance, one must insure a house before it burns down. So to, if we are to view increased inequality as a risk with a financial solution, we should take risk-managing actions while it is still just a risk. 10. Create livelihood insurance, insurance offered to individuals against declines in the average income paid to people in their professional specialty. We already have disability insurance, insurance that protects individuals against loss of income due to illness. In the information age, we ought to be able to expand such insurance, without triggering moral hazard, to protect people against possibly catastrophic drops in lifetime earnings that sometimes occur when people’s occupational income suffers a serious hit because of some technological innovation or change in the economy. If people are able to insure their livelihoods against such events, they will not only rest easier, they will be able to be more adventuresome in their career choices. All of these ideas are expansion of basic financial technology toward the broader social benefits. The first step in making any such things happen is first to appreciate the kinds of financial institutions we already have, as well as their defects. We need then to improve and build up this financial infrastructure so that it works better in our lives. Robert Shiller is professor of economics and finance at Yale University. This month Finance and the Good Society appeared and also a new revised version of his free video online Financial Markets course, part of Open Yale , was launched.

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Kristie Arslan: Mr. President, Focus on the ‘Baffle Rule,’ not the ‘Buffett Rule’

April 11, 2012

President Obama is calling on Congress to raise taxes on the wealthy in a speech today, and he’s using a clever example to describe it. Calling it the “Buffett Rule,” he’s calling for tax law changes to ensure the Warren Buffetts of the world don’t pay a lower tax rate (due to their investment income) than their secretaries. Tax fairness is a top priority for the National Association for the Self-Employed , but we’re much more interested in tax laws that impact the 22 million self-employed Americans who aren’t household names but who create a whole lot more jobs than Mr. Buffett. In honor of the millions of Americans who are struggling this week to figure out the home office deduction and other baffling tax laws, we’re calling on Congress and the president to change all tax laws that are so baffling that taxpayers don’t take advantage of them. Let’s call it the “Baffle Rule.” The tax deduction for the use of a home office is one of the biggest headaches for taxpayers. It is probably the most notoriously complex and confusing broad-based tax credit offered by the federal government. An estimated 9 million Americans work out of their homes, but there are perhaps millions of these entrepreneurs each year who don’t claim this tax credit, simply because they don’t understand it. This is especially true for self-employed taxpayers, who usually prepare their own taxes. Unlike Mr. Buffett, they don’t have a platoon of tax lawyers on speed dial, so in many cases they just give up on the deduction out of frustration or fear of an audit from an incorrectly filed return. The NASE is asking Congress to simplify this deduction, by allowing home-based businesses to take a standard $1,500 deduction for home office expenses. By making the tax rule less confusing, more self-employed taxpayers will take advantage of it, thus providing more resources for these small businesses to grow and create jobs. Tax credits don’t work to encourage behavior if Americans can’t understand them, so let’s get Congress and the president to enact the “Baffle Rule” this year, so that our taxes for next year are friendlier and less baffling to the self-employed and small businesses.

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Joseph Rauch: Why Obama Should Raise Taxes in 2013

April 10, 2012

If my title didn’t catch your attention, I’ll say it again: Obama is going to win the election this year and when he does, I want him to raise taxes on wealthy Americans by repealing the Bush tax cuts or introducing new tax legislation on the “1 percent” as well as capital gains. Why he will win is an entirely different issue, so for now I’ll just explain why raising taxes on the rich is a good idea. Proponents of tax cuts often ask the question, “Why punish success?” I think the implications of this question and the beliefs of those who pose it are much more important than the question itself. The first implication is that raising taxes on wealthy Americans, commonly referred to as job creators or investors, will make these job creators stop creating jobs and investing/stimulating our economy. I believe this is false because raising taxes will not affect the potential of an investment. In other words, a good investment will still be profitable and appealing and allow wealthy Americans to create jobs and stimulate the economy even if they have to pay a little more money in taxes as a result. I am certain that taxes would not stunt the growth of an industry if the idea behind it has potential and if the investors see this potential. The second implication of “Why punish success?” is that raising taxes on the rich is class warfare. Hyperbole aside, this is also not true. Raising taxes on the rich in any capitalistic society is simply logical. We have a massive debt to China, and one of the most feasible ways to pay them back and regain our economy is to generate revenue by raising taxes. Raising taxes on rich people is the most sensible solution simply because they have more money. A member of the “1 percent” will still be able to live the same lifestyle and will not have to make significant sacrifices if their taxes are raised while a tax increase for a poor American can mean the difference between sending a child to college or not. It is not class warfare, just math and the idea that shaving a piece off a loaf of bread is not so tragic if the loaf is as big as a refrigerator. I believe the last purpose of the “Why punish success?” question is to generate sympathy for wealthy Americans by creating the illusion that all rich people gained their wealth by working incredibly hard throughout their life. Proponents of tax cuts for the wealthy want people to think, “How could I possibly be so spiteful as to raise taxes on someone simply because they worked hard and earned every penny they have?” While many of the “1 percent” percent are rich because they worked hard on brilliant ideas or creating businesses, the life stories of these people are not the definition of becoming wealthy. The less inspiring story is that a lot of wealthy Americans (in this case I mean Americans that make more than $300,000 dollars a year) are rich because their parents were rich and afforded them connections, opportunities and the financial support to go to a top-tier college. Thus, rich people with rich parents usually have their inheritance to thank more than hard work, not that these people aren’t capable of working hard in addition to their given advantages. There are also a lot of Americans that become rich due to having luck in their investments and not necessarily skill in predicting the market. I always chuckle when I think of the people who were persuaded into investing into some little company named Google because they thought the worst case would be they would lose a little money if the company bombed. The logic of believing rich people are necessarily rich because they worked hard is also dangerous because of its implications about other Americans. If rich people have lots of money because they worked hard, then are poor people inherently lazy, and are middle class Americans inherently not quite lazy but not hard-working either? Fortunately, some of the wisest and most influential of the “1 percent,” whose financial savvy and hard work earned them their fortunes, such as Warren Buffet and Irwin Jacobs, do not see taxes as punishment and have stated that their taxes should be raised. Jacobs stated that the economy was healthy during the Clinton years when taxes were high and Buffet argued that it was unfair for him to pay fewer taxes than some of his staff. I hope these men act as shining examples and that Warren Buffet does not continue to be a pariah due to his statements. If Obama raises taxes on the “1 percent,” the worst-case scenario is that they will be upset. Many of them will moan and make threats, but please do not take this as a stereotype of being rich. Rich people will not like increased taxes simply because they are human or rather because they are American. However, if Obama wants to raise their taxes, he has to change his attitude a bit from what is was in his first term and be less willing to compromise. The word bipartisan has a nice ring to it but is generally a waste of political time and effort for both parties. I’ll try to use a positive analogy by saying that American politics is and should be, for better or worse, a lot like American football. The opposing teams smash into one another and try to score more points than the other team. The fans of the winning team cheer and the fans of the losing team boo and have to swallow their pride and cheer again next game. In conclusion, I believe this is the attitude that the formerly naïve Obama should have in his second term if he wants to implement new tax legislature or repeal the Bush tax cuts.

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Susan Harrow: James Bond Brand Shaken Up: Swigging Heineken in New Movie Skyfall

April 10, 2012

James Bond drinking beer? Not a suave move Bond. James Bond swilling beer is a huge branding bomb. We know and love this sophisticated spy for his elegance, savoir-faire and swagger, not for sipping the foam from a heady Heineken. Famed for his signature beverage of a vodka martini “shaken, not stirred,” Bond has caved to down the brew for a purported 45 million dollar marketing deal from Heineken. Picture this: a beautiful Bond girl approaches the current James Bond guy, Daniel Craig, at a bar in some sensual island hoping to be seduced by him — and then eyes his drink — a can of beer. Game over. Lesya Lysyj, a representative of the Dutch brewer says, ”James Bond is a perfect fit for us,” Maybe he is, but beer isn’t a “perfect fit” for his brand. She adds, “He is the epitome of the man of the world.” Not after this commercial caper. According to Ad Age the Heineken brand has had a partnership with the film for 15 years, but this is the beermaker’s most visible move to capitalize on the Bond name. This unfortunate decision has caused quite a stir among fans and inspired jokes from the likes of Peter Sagal and his guests on the popular NPR Show, “Wait Wait…Don’t Tell me.” In this week’s show Sagal quipped, “His tuxedo is just printed on a T-shirt now. We’re looking forward to having him sidle up to the bar in his tuxedo T-shirt and he’s going to order a brew.” Guest panelist Adam Felber added, “He’ll be Jimmy Bond now.” Sorry, but beer is bad for the Bond Brand. Say it ain’t so James. We want our Aston Martin, Rolex wearing, martini drinking man to stay true to his elegant, womanizing ways, not throw one back like the rest of us working stiffs. Susan Harrow is the author of Sell Yourself Without Selling Your Soul . She runs a Media Consultancy where she helps everyone from Fortune 500 CEOs to celebrity chefs, entrepreneurs to authors grow their business through media coaching and the power of PR. For more information please contact Susan .

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Mark Steber: What to Know If You Owe

April 10, 2012

According to the Internal Revenue Service (IRS), approximately three out of four taxpayers who file an annual tax return receive a refund. That’s good news for 75% of consumers, but not ideal for the remaining 25% of taxpayers who find they owe money at tax time. In fact, it’s one reason why some Americans will drag their feet, and wait until the last minute to get their tax return filed. If you are someone who has, or expects that you may have, a tax liability to pay, it’s important to be aware of the rules regarding tax payments and to manage your time wisely in advance of the April 17 tax deadline. Perhaps the most important thing to remember, and something that still surprises people when I remind them, is that while you can request a six month extension for filing a tax return, you still need to pay your taxes by April 17 in order to avoid interest and potential penalties. The additional six months (until October 15, 2012) may help some taxpayers breathe a sigh of relief, but more often than not it’s better to buckle down and file by the deadline, even if it requires paying. There are several ways to make payment on a tax liability. For those who wish to pay what they owe in full, they can send a check made payable to the United States Treasury, being sure to note the taxpayer’s social security number or employer identification number, tax period, and related tax form number. If you want to pay with cash, that’s an option, as well, though you must pay in person at a local IRS Office. Some people prefer to work with the IRS to set up an installment plan and pay down their tax debt each month in a predetermined amount based on the amount owed. However, there is a one-time fee charged by the IRS for this arrangement (at present, $52 for direct debit agreements and $105 for non-direct debit agreements). Similar to most installment payment plans, you will be charged interest on the unpaid amount of the debt, as well as potential penalties. You will also be expected to repay the full debt amount within 72 months. Another option for paying a tax burden is to pay by credit or debit card through an IRS e-pay service provider. This can be done via phone or electronically, though consumers should be aware that there is a fee charged by service providers to facilitate the transaction. Keep in mind that you can file your return at any time and wait until April 17 to pay, if desired. If no effort is made to pay, you could be subject to collection action, such as having your wages, bank accounts or other assets garnished. The bottom line is, plan ahead to find out if you owe, and to determine the best way for you to pay Uncle Sam based on your current financial situation.

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Russell C. Smith: Reinventing Capitalism: Strange Currencies in the Marketplace

April 10, 2012

As a species, human beings have excelled at hedonistic adaptation. It’s one of the main reasons we’ve become the dominant species on the planet, and have survived over the past 12,000 years, when many other animals that roamed the Earth far longer didn’t accomplish anything resembling modern civilization. Dinosaurs had millions of years to evolve, but they never got around to developing a Gap Outlet, much less online shopping. Adaptation, altering behavior on a reward/punishment basis, and always staying ahead of the competition — enabled humanity to create civilization and all the institutions, organizations, and social structures that evolved along with us. When coins and paper currency overtook the barter system, societal structures adapted and those with the gold wanted to hold onto the gold. Modern capitalism and economic theories have only been around for a brief time in the history of humanity. And when it comes to economics, most of what’s been written, argued about, and speculated upon was done so before the Internet Age. As the Internet continues to expand and morph into its next iteration, helping to reinvent and demolish one industry after another, one can easily imagine the Internet soon altering huge segments of how capitalism works in the digital age. It’s safe to say there’s been no other time in the history of the world when so much information on peoples’ purchasing habits has been gathered, stored, catalogued, and most importantly… used. Impulse buying is done quickly, with a swipe of a credit or debit card, without much thought as to how a person’s overall buying timeline connects back to every other purchase ever made. Buying everything on credit or debit is now the norm in our society, and people who still use cash on a daily basis will soon become an anachronism, similar to those odd individuals who don’t always carry a mobile communication device. If the constant tracking of one’s buying habits already has a decades-long history, and everyone in society is now expected to be on-call and constantly tethered to a mobile phone, how does this consumer surveillance and over-connectedness play out in the long run? One of the easiest ways a mega-corporation can change your behavior is to offer reward points to you for every purchase you make. And with smart phone and microchips becoming more prevalent in our daily lives, don’t be surprised if you’ll soon be able to accumulate points automatically, even in your sleep. You already receive points for special deals, so why not for regular daily purchases — having your morning Starbucks Latte, drinking a Coke at lunch, or filling up at the same Shell station every afternoon. You’ll get more and more points for buying, choosing, picking anything, anytime, anywhere. You’ll become a walking preferred card for hundreds of global brand that will embed themselves into your behavior. And eventually, you may receive real rewards for your loyalty, not just rewards the corporation chooses for you. Eventually a person could accumulate far too many points to spend in a lifetime, similar to the way some frequent flyers have racked up so many miles they just don’t have enough time to use them all. Internet sites specializing in point trading could easily become the next big online business. Individuals could sign up and trade reward points with others, which would go toward buying tangible items on eBay or Swap.com. In the near future, it’s easy to imagine companies like Facebook or Google creating their own brand of currency. A far fetched idea? Not really. Just ask anybody who’s spent money on Second Life currency so they could buy virtual products or experiences. In a few years you might be buying Starbucks coffee with Star Bucks. It’s often be said by politicians that small businesses are the driving force of a healthy economy, and right now further growth of small businesses are what will create a more sustainable economy. Small businesses have struggled through these hard times, and adapted to the harsh economic realities. The complete failure of trickle-down economics has been apparent for some time, and new methods of achieving successes are tried daily, in every city in the country, online, and in every possible way. One proven method has been for small communities to invent their own currency exchange. In Traverse City, Michigan, the community developed a local currency known as Bay Bucks in 2006, and it’s billed as a the “homegrown local currency.” And Ithaca, New York has been using Ithaca Hours as a form of local small business currency since 1991. In the pioneering, can-do spirit, their website proclaims Ithaca Hours “promotes local economic strength and community self-reliance.” More than one economic seismic shift could happen over the next several decades. Finding inventive ways to get off shaky ground and move toward a more a sustainable economic climate is certainly on everyone’s mind. If capitalism has proven anything, it’s that it serves our hedonistic sensibilities well — providing citizens with everything they desire, all the time, if only they can pay for it. When a majority of the population agrees it’s finally time to reinvent capitalism so that it works for the majority and not just the ultra-wealthy, the super rich may decide to openly condemn the same system they’ve championed for so long. Witness the voices of mega-rich capitalists who realized it was time to promote a better future and change the world. Bill Gates aimed higher, began a charitable foundation, and decided to use a portion of his sizable wealth to rid the world of Malaria, and Warren Buffett has suggested to other billionaires they should set an example by giving more, or at the very least be taxed appropriately to their wealth, while also using their riches to transform the state of the world. After all, the one formidable task huge amounts of capital can be used for is to improve lives on a global scale.

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Richard Barrington: Retirements Survey Finds Many Tripping Over Financial Hurdles

April 10, 2012

The 2012 EBRI Retirement Confidence Survey is out, and the results reflect the importance of continuing to strive for new goals as you move through life. The EBRI is the Employee Benefit Research Institute, and their long-standing annual survey of the confidence that American workers have in their financial prospects for retirement is a good benchmark for both economic conditions and the state of U.S. retirement savings . As you might imagine, retirement confidence has taken a beating in recent years. One of the root causes suggested by the survey results is that the difficulty of meeting short-term goals might be so great that people never get around to focusing on long-term goals. A look at some of the issues covered by the EBRI survey provides some insight into the sequence of financial hurdles people face. Progressing through financial goals There are many subjects covered by the EBRI survey, but one way to think about the results is to view topics in the order people naturally face them as they move through life: Meeting day-to-day needs. The first order of business is getting a job; this may be fundamental to meeting your financial goals, but it is by no means easy. 42 percent of survey respondents cited job insecurity as the most pressing financial issue facing Americans today. Of course, until you can move beyond worrying about day-to-day needs, you have little hope of preparing for long-term ones. Getting out of debt. People often borrow money to get by, so then the challenge becomes getting out of debt. 62 percent of survey respondents cited debt as being a problem to some extent, with 20 percent calling it a major problem. Debt can be a huge barrier to retirement saving: While 67 percent of workers with no debt problem said they were either very or somewhat confident in their retirement finances, only 22 percent of those with a major debt problem expressed the same levels of confidence. Saving for retirement. With employment and debt being such hurdles, it’s no surprise that many Americans haven’t adequately addressed retirement saving. Only 52 percent of worker respondents were very or somewhat confident in having enough money to last through retirement. In 2007, this figure was 70 percent. Sustaining wealth in retirement. The challenge doesn’t end with retirement. Between stock market setbacks and falling rates on savings accounts , making money last through retirement has become tougher than people expected. The percentage of retirees who are very or somewhat confident in having enough money to live comfortably through retirement is now 63 percent, down from 79 percent in 2007. The difficulty of meeting each of these goals, as reflected by the low level of confidence people currently have in each case, reinforces the importance of working toward these goals throughout your adult life. A sequence of goals will help you keep moving forward, and what the survey suggests is that if you aren’t moving forward, you will quickly find yourself moving backward. The original article can be found at Money-Rates.com : ” Retirements survey finds many tripping over financial hurdles ”

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Edward Wytkind: Richard Branson Is Quite Busy Not Owning Virgin America

April 10, 2012

In 2005, British billionaire Richard Branson came to America to launch a new airline for Americans, owned by Americans and controlled by Americans. At least that was the story he was selling. First, you have to understand that under current U.S. law, foreign interests cannot own more than 25 percent of the voting stock or 49 percent of the equity in a U.S. carrier. To further ensure this is crystal clear, the law requires the “actual control” of the airline to be in the hands of U.S. citizens. This is no small matter not only for national security purposes, but also because of its impact on U.S. airlines, safety, jobs and the collective bargaining process. But Sir Richard doesn’t get involved in many things he can’t control, so you can imagine our skepticism at the outset. You think he would have let someone else control the introduction of his self-proclaimed ‘ sexiest spaceship ever ‘–Virgin Galactic? So I have a question: If Virgin America is independent of U.K.-based Virgin Group, why is the group’s founder talking to Virgin America’s flight attendants about the evils of unionizing? Hold that thought, I’ll get back to the video-taped evidence in a moment. Since the end of 2005 when Virgin America first filed an application with the U.S. Department of Transportation to operate as a U.S airline, the Transportation Trades Department, AFL-CIO and others argued that Virgin America is controlled by foreign interests, which is counter to U.S. law. But time and time again founder and Chairman of the Virgin Group Richard Branson, who is no stranger to arguing against U.S. ownership laws and regulations, was able to convince U.S. authorities that he was not controlling the airline and was, therefore, compliant with our laws. Eventually our regulators agreed. Therefore, we find ourselves in a place where — more than four years since it actually began flying in the fall of 2007 — Virgin America is vying for highly sought-after slots at Washington Reagan National Airport. And while it battles it out for these slots with its competitors, its compliance with foreign ownership and control laws must again be scrutinized. This time, it is not about speculation that at some point in the future Mr. Branson might play a role in controlling the operations of the airline. This time, there is a video produced by the Virgin Group and shown to Virgin America employees of the great founder taking the time out of his busy schedule (what, no space launch that day?) to speak to them about what is supposed to be their unfettered right to vote on unionization without employer interference. In the video, he tells flight attendants of the consequences to the company of joining a union after the Transport Workers Union filed to represent these employees. Branson asks the employees of Virgin America, a carrier in which he has sworn no control in, to think about what is at stake for the company if the TWU is elected. He then urges them to protect their “independent spirit” by rejecting the TWU because the union will take their “uniqueness away.” Actually, what is unique about these employees is that they have to sit at the table, on their own, and negotiate with a billionaire over wages and benefits without a union voice. That’s a “uniqueness” I wouldn’t cling to. In telling Virgin America employees to “say no to the old way of flying and say no to the TWU,” Sir Richard couldn’t have been clearer — he is at the helm making sure that his (sorry, I meant Virgin America’s) employees remain non-union. Branson is taking Virgin America down this path, an airline he allegedly doesn’t control. Odd. And now Branson’s airline has applied for two nonstop flights to San Francisco International from Reagan National. These slots are coveted by actual American-owned and controlled airlines because there are a limited number to go around from this popular stop near the nation’s Capital. It would appear that Mr. Branson is fond of making videos these days. In a Kobe Bryant ad for Nike, which features Branson and his business success, the video ends with this message: “Attack Fast. Attack Strong. Learn the System.” It looks as though Mr. Branson and Virgin America, fully in compliance with our foreign control laws I’m sure, have learned our system well, and how to beat it. Regulators take notice: Sir Richard is quite busy not controlling Virgin America.

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Jared Bernstein: What Is This Thing Called… Escape Velocity?

April 10, 2012

A number of economists, myself included, have been talking for awhile about the underlying strength of the recovery in terms of “escape velocity.” The idea we’re trying to convey — or at least the one I’m contemplating — is a virtuous cycle of growth begetting jobs, which in turn generates incomes, which supports more growth, etc. Others talk about it in terms of “taking the training wheels off” of the economy, which I also kind of like in the sense that an economy that’s growing too slow is like a wobbly bike ride, where there’s not enough speed to ensure stability. The training wheels analogy also implies that the bike has enough momentum to take off fiscal and monetary stimulus… we’re already taking off fiscal stimulus, by the way — and too soon. Well, someone asked me a good question the other day: how would we know if we’ve achieved escape velocity? The best answer is, of course, multiple quarters of real GDP growth above trend, which right now is generally thought to be in the 2-2.5% range (perhaps a bit lower given slower labor force growth, but that could accelerate as the improving job market pulls more folks back in from the sidelines), followed by consistent quarters of robust job growth. We started kinda, sorta, maybe, seeing something like that in recent months, with GDP averaging north of 2% and employment above 200K. But both of these trends are still too shaky for many economists’ comfort (last Friday’s jobs report didn’t help), and while forecasts disagree, some predict slower growth ahead, jobs settling in around 150-200K, and unemployment staying about where it is, in the low 8′s. That’s about what I expect in the near term. It’s not bad — it’s progress, moving steadily in the right direction –, but neither is it fast enough to ensure the bike doesn’t wobble, especially if it hits a bump. But there’s another, related version of self-sustaining growth that also warrants a close look.* I don’t have time to do it justice right now (Monday night basketball beckons!), but I can get things started, and I encourage others to join in. In this version, you assume that absent a flock of albatrosses around its neck, the economy can pretty much be expected to grow at trend. I admit, there are many important nuances of great import that this theory brushes over (is not the underlying trend insufficient from the perspective of truly full employment; what about the structure of jobs? Too much finance? Too little job growth among startups? Accelerated labor-saving technology? A structural gap between pay and productivity?) I worry intensely about all of those questions — but it’s also true that absent the weights around its neck, the economy is a lot more likely to be on track toward self-sustaining growth. Trend growth may not be sufficient for solving our structural problems. But it’s surely necessary. So, how do you gauge our economic progress in this regard? One good way is to think about the corrections that need to take place and see how far along they are. Once they’re complete, we’re more likely to hit escape velocity. Like I said, I’ll get the party started and will add more in days to come. The first and one of most important corrections is housing. True, it was a home price bubble that got us into this uniquely deep mess, but it’s also the case that housing, goosed by low interest rates, is a traditional escape route from recession. Here, two slides suggest the correction is largely, but not wholly over. First, the Case-Shiller price index doesn’t appear to have bottomed and similarly, the residential investment contribution to GDP has yet to show any life. Sources: 1, S&P’s Case-Shiller Index, 2, NIPA Next, the TED spread. This is a measure of riskiness in credit markets, and back in the heart of the GR, we talked about targeting the TED , recognizing that if it remained high, there was little hope of credit markets coming back on line. Think of the TED spread as a measure of blood pressure in the veins of credit. It’s picked up a bit lately, but clearly credit default risk is way down from its heights. It’s fair to say that this correction is and no longer weighing on the economy. Source: FRED, 3mos LIBOR minus 3mos T-bill (that’s right, I got the TED from FRED, like I SAID) What else? There’s household indebtedness — very important, and well-analyzed here , related to housing, of course, and not yet fully corrected. But that’s where I’ll start when I can get back to this. *I thank the great econometrician Jim Stock for helping me to crystallize these thoughts, but any mistakes in logic or measurement are mine, not his. This post originally appeared at Jared Bernstein’s On The Economy blog.

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Chris Weigant: Occupy’s Next Crossroads

April 10, 2012

The movement that Occupy Wall Street began is at another crossroads, it seems. It isn’t the first such fork in the road, and it certainly won’t be the last. What happens next is anyone’s guess. Is the Occupy movement poised for a comeback? Or is it about to be co-opted altogether? Can both, in fact, happen simultaneously, and would that be a good thing or not? This week kicks off an effort known as “The 99 Percent Spring” by an impressive coalition of groups with solid lefty credentials (labor, Van Jones, MoveOn.org, etc.). The goal is to hold a series of “teach-ins” that will train 100,000 people (half in person, half online) in nonviolent protest techniques. The Huffington Post reports on the details: The organizing is not aimed at any one event, rally or issue and the effect will be unpredictable. Training tens of thousands of people in arrest techniques to make a political point tends to inspire people to put that training to use. Each training session lasts a full day and covers a lot of ground. The curriculum is broken into three basic areas: explaining broader economic issues such as income inequality and attacks on workers’ rights, encouraging participants to tell their stories of economic injustice and hardship, and teaching the nuts-and-bolts of nonviolent direct action. If the phrase didn’t have such militaristic overtones, I would call it “boot camp for protesting.” Lefties have decided that the Occupiers were onto something and are looking to expand and build on what Occupy Wall Street set in motion last fall. The 99 Percent Spring folks aren’t organizing any one protest over any one particular issue; they are merely training people how to go about doing so for the upcoming election year. They’ve even got some Occupiers teaching their seminars. But, as with all things Occupy, some purists are already charging that it’s all an attempt to “co-opt” them, their message, and their movement. The Occupy movement is planning a very concrete (and ambitious) event for May 1: a nationwide “general strike.” They fear outside groups will dilute their message and taint them by association, somehow. This is, to a large extent, silly. Here’s a quick question: is the Occupy movement inclusive or exclusive? As with all things Occupy, there is no one clear answer; it is both at the same time, in a way. The movement is inclusive, as evidenced by the fact that to join, all you had to do was show up. Anyone could be part of the “General Assembly,” if physically present when the group met. But Occupy also has a creeping sense of exclusivity to it, as well, mostly in fear of the dreaded fate of being “co-opted” by others (up to and including their biggest worry: being co-opted by the Democratic Party). “Being co-opted” is defined differently depending on whom you talk to, but it generally means some outside group would somehow hijack the Occupiers’ pure message and bend it to their own aims. At the same time, the Occupiers are attempting to encourage (one might say “co-opt” if one were being ironic) other groups to support their cause in a visible way — labor groups, especially. The re-launch of Occupy Wall Street (Occupy 2.0?) is slated for May Day, and the Occupiers would love it if they brought the country to its knees for a day as workers everywhere walked off their job in solidarity. That’s really the only way a general strike could work. The May Day plans and the 99 Percent Spring don’t seem to be mutually exclusive but complementary. If the folks who attend the 99 Percent Spring turn out in force on May Day in cities across the country in support of the Occupy protest, how can anyone involved in either see that as a bad thing, especially if the 99 Percenters teach others what they’ve learned, and so present an image to the media of peaceful, nonviolent protest techniques that are time-tested and proven? Any successful movement needs both dreamers and doers. If composed of mere dreamers, nothing ever gets accomplished. If composed of mere doers, things may get accomplished, but without any real direction toward any goal. A prudent mix of both is required not only to move but to move forward toward something. This requires both a lot of people out in the streets and the discipline that people trained in the art of protest and street theater can bring. The Occupiers should be proud of what they’ve achieved already: the change in the conversation in Washington and on the nation’s airwaves. The phrase “99 percent” is used in the discussion now, and the ideas behind that simple phrase have gotten enormously more attention than they did before anyone set foot in Zuccotti Park. That is not easy to do in American these days. Compare the coverage pre-Occupy and post-Occupy in the media on the subject of jobs, for instance. Pre-Occupy, the entire conversation was about slashing the federal budget. Post-Occupy, the conversation has at least shifted somewhat toward the economic plight of millions of Americans. It’s hard to remember now, but pre-Occupy this was deemed “old news” or “not news” by national news directors and editors, and now it will likely be a centerpiece of the upcoming presidential campaign. That is a big victory, even if a bit intangible. The problem of the Occupy movement has always been defining a path forward. Seeing the utopia at the end of the rainbow is always easier than trying to figure out how to get there, to put it another way. Asking Occupiers what they would change about the system brought forth many admirable goals: ending the power of Big Banking, getting rid of lobbying and money in politics, solving the student loan crisis, and many other worthy ideas. But when asked how to achieve those goals, many Occupiers shied away from working within the existing political system altogether, seeing it as so corrupted and ineffectual as to not be worth the effort. But how else is any of this stuff supposed to happen? Overturning the Citizens United decision, just to pick one, would likely (at this point) require an amendment to the Constitution. This would be an enormous achievement, and a fundamental realignment of money in politics, but it would also require an almost Herculean effort to pass. That effort would have to take place not only on the national political level (Congress) but also in statehouses across the land (ratification), and it would take years and years of very hard work to accomplish. That’s not to say it isn’t worth such an effort, but absent such effort it is never going to happen . All movements face this ultimate dilemma: work within the system, or work to create an entirely new system. But creating an entirely new “paradigm” would be even harder than passing an amendment to kill the Citizens United decision — and getting large groups of people to agree on what that new system would be seems (at this point) to be an almost impossible task for the Occupiers. The Occupiers need to ask themselves some very bedrock questions about what it is they are trying to do, and how exactly they plan to get there. Here is how I would compose such a self-examination: Do you want to get something done? Or do you just want to get on television? Do you want to take steps, however small, toward your ultimate goals? Or do you just want to make a certain point, and make it as loudly as you can? Can you accept the fact that in order to achieve any change at all, it will likely have to come from the same corrupt system you are protesting? Or will you remain pure and not change anything in any concrete way? Will you welcome fellow travelers along the path you foresee, even those who might have their own ideas about what to push for next, or will you exclude any group that doesn’t share your ideological purity? What is the point of your movement, and how do you see yourselves getting there? These are important questions, and I am quite obviously biased in the way I have framed them. I do believe that “the system” needs a good grasp by the collar and a healthy shakeup every now and again, but I also believe that ending “the system” and building a new one from scratch on better, more utopian lines is simply not going to take place in my lifetime. Call me a cynic if you must, but there it is. Working within a corrupt system to achieve even incremental change is hard: it takes a long time, and it takes a monumental amount of effort (and some luck). It is not easy. The only easy thing is getting frustrated by the glacial pace of change and giving up on “the system” altogether. The other thing change requires is numbers. Taking over a park — even in every city in America — is one thing. But getting millions of Americans who likely largely agree with your basic goals to influence politicians is another. Achieving even that is going to require some helping hands, which is why the 99 Percent Spring and the Occupy Wall Street folks would do far better to march forward hand-in-hand than worry too much about being “co-opted” or about anyone’s ideological purity.   Chris Weigant blogs at: Follow Chris on Twitter: @ChrisWeigant Become a fan of Chris on The Huffington Post  

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Mike Lux: Homes, Banks, and Politics: Round 2 of Settlement Talks

April 6, 2012

Now that the big settlement talks with the banks are over, and most of the reporters have gone home, not very many people are paying attention to what is going on in the financial fraud task force, or in the continuing conversations between various players on Wall Street and the government. But not understood by most people is that there may be a Round 2 in the settlement talks, and if there is, it may well be a doozy — a much bigger deal than the first round. If there isn’t a Round 2, that will likely be a different kind of “doozy,” a problem with huge political and economic implications for the president and politicians of all stripes. Let’s start with talking about why so many activists and organizations like the Campaign for a Fair Settlement and the New Bottom Line pushed so hard for a more aggressive investigation in the first place. No matter how those first settlement talks with the banks turned out, it was always clear that whatever the number government negotiators got would be tiny compared to the scope of the $700 billion dollar underwater mortgage problem homeowners and our entire economy is faced with. And we were right: the $25 billion is a drop in the bucket, about 3 percent of the way to a solution. The far bigger question is what would happen next, because our national economy will continue to be weighed down heavily by this deeply damaged housing market unless there are much deeper mortgage write-downs. There are two big ways for more mortgage write-downs to happen, and two big goals progressives should have for the financial fraud task force. The former pair first: most mortgages are owned by either Fannie and Freddie, or by the big bank conglomerates on Wall Street. The first way for massive mortgage write-downs to happen is either for Fannie and Freddie acting administrator Ed DeMarco to change his policies on write-downs, or for him to be replaced by Obama making a recess appointment of someone who would change the policies. That’s why many groups have launched a Fire DeMarco campaign, and many others keep banging on his door to ask him to change direction. There is some dissent on this among people who know the banking issue, because some banks own second liens on these mortgages and could benefit as a result. It’s a fair point, and anything that can be done to structure Fannie and Freddie write-downs in a way to not help the big banks is important to do. But my view is that maximizing the write-downs is critical, that homeowners and the overall economy need these write-downs too badly to spend an inordinate time worrying that some banks may benefit as a result. (Wall Street bankers find many different ways to hedge their bets and diversify their holdings, meaning they sometimes find ways to profit even on things that are actually good for people. Go figure.) The other way for big write-downs to happen is if the financial fraud task force can squeeze the big banks on all the fraud they have committed, and get them to agree to writing down a much bigger pot of money — in the hundreds of billions, not the tens — in exchange for a legal release on some fraud claims (although definitely not all) by the government. Which leads to my next major point: that of goals for this fraud task force. The two goals for the task force as far as the progressives I am talking to are these: write-down money and prosecution for crimes committed. Some people think these are mutually exclusive. I don’t, and neither should task force members. Based on what we already know from news reports and other legal action, it is clear that if the task force is aggressive and tough enough in their negotiations, they can through subpoenas and depositions find thousands of separate violations of punishable financial fraud. Much of that can be used to force the bankers to the table for real negotiations about hundreds of billions of dollars in mortgage write-downs, but investigators will also find plenty of fraud so egregious that the high rollers in these firms ought to be going to jail as well. Indicting, perp walking, and sending some of these top execs to prison is important, because if wealthy and powerful people can continually violate the law with impunity, they will in fact keep doing just that, and our financial system will be permanently at risk. The question now is whether the task force will be effective in bringing bankers to justice, and in forcing bigger write-downs. But this is a real question, and I think it is important for the American people to understand what is going on in there. To all of us on the outside who have been working on these issues, things don’t seem to be moving very fast. We need to know the answers to some very important questions, including: Is there an executive director, coordinator, or clear manager of any kind in place to drive this process forward aggressively? There was discussion for a while of Rep. Brad Miller (D-N.C.), a great consumer advocate, playing such a role, but that talk seems to have died out and I am still not clear how they are managing this in the meantime. Will any more staff resources beyond the very modest numbers announced when the task force was unveiled be appointed? Of the staff resources that were appointed, are all of them actually assigned and working? If not, how many are actually doing any work? If not, why (the hell) not? Are task force leaders keeping a close eye on statute of limitation issues to make sure we can actually prosecute the most important cases of bank fraud that exist out there? After the first flurry of subpoenas, we haven’t to my knowledge seen any more come down. Why not? Seems like there is plenty to investigate, why the hold-up on more subpoenas? At least some of the members of the task force have said they want to be aggressive and fast-moving in this investigation. Are there people putting road blocks up? If so, why aren’t they being cleared away? Who has point responsibility for clearing the road blocks out of the way? Here’s the most important question in my mind: is the White House paying enough attention to this? I know from my experience in the Clinton White House that once a decision is made to move forward on a major new initiative like the settlement and fraud task force, that sometimes the sense of urgency fades and senior staff tend to move on to new issues, problems, and crises — they assume whoever they appointed to do things is taking care of it. That is natural enough given all the demands on the White House, and I sense it may have happened here. But I fear for my friends in the Obama White House that this is going to come back and bite them in the ass in a really serious way if they aren’t paying a lot of attention to it. One of the greatest weaknesses the president has going into election season, both with swing and base voters, is the lingering feeling that he and his team have been too soft on the Wall Street guys that took down this economy. The big banks making record profits and handing out record bonuses the year after taxpayers bailed them out, and while the overall economy has been terrible, has left a lasting impression with voters. The failures of the HAMP program, the flurry of bad press around the Suskind book, the unwillingness to recess appoint Elizabeth Warren as the head of Consumer Financial Protection Bureau (even though the person Obama appointed, Rich Cordray, has been terrific, he has nowhere near the profile or cachet with activists following the issue as Warren), and the lack of any prosecution of Wall Street big shots has steadily added to that image. So if nothing happens with this task force any time soon, it will be a huge disappointment and a very big deal to people and organizations working on the issue, to the reporters who know the financial beat, and to voters in general. In an election season dominated by discussion of Mitt Romney’s Wall Street background, for the president to be vulnerable on this issue would be a terrible mistake, and the way they get strong on it is to have a successful task force. Here’s the electoral component of this that almost no one is thinking about: there are 1 1,000,000 underwater homeowners right now, many of them families with multiple voters living there. There are a ton of them in key swing states like Nevada, Florida, Ohio, Pennsylvania, North Carolina, Wisconsin, and Colorado. In my mind, they are very likely to be swing voters: screwed over by Wall Street, but not feeling like either party is helping them much. They have heard about the settlement, but $25 million doesn’t go very far when there’s $700 million in negative equity, so they aren’t likely to get much help, which will make them even more irritable — it could be HAMP all over again in terms of promises of help made but not delivered. Holding the banks accountable, and delivering a big new round of write-downs, is going to look awfully good to those voters and their neighbors who don’t want more foreclosed homes on the block. My advice to my friends at the White House is to pay a lot of attention to this sooner rather than later, and to light a fire under anyone involved in the task force who may be throwing those road blocks up. The task force needs to show some visible progress, some real movement that is obvious to people, sooner rather than later on this. If they move aggressively forward, I believe based on conversations with legal experts that it is entirely possible the banks can be forced to write down $200-300 billion in mortgages before the end of the year. That would not only help those underwater homeowners but would be a dramatic boost to the entire rest of the economy because of the extra cash it would put in homeowners’ pockets and the major boost it would be to the overall housing market. The big banks can certainly afford it: according to an SEIU report , in 2010 alone just the six biggest banks gave out an estimated $143 billion in bonuses. Given that these write-downs would be cumulative over many years, $200-300 billion might mean smaller bonus checks and profit margins, but it is nothing that would break the bank. And here’s the other thing: if you write down these mortgages and stabilize the housing market, all those toxic assets the big banks hold will start to look healthier soon, so the banks would even get some of that money back. This issue has faded from the headlines, but it is a huge deal — for the homeowners who remain stuck underwater, for the housing market and economy as a whole, and for the president’s re-election chances. Let’s hope these questions get answered soon, and in a good way. And let’s hope the task force can get its act together to force another big settlement, and some perp walks as well, before it is through.

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Matt Bieber: To Bet or Not to Bet? Why Gambling on Elections Is Wrong

April 6, 2012

Many mornings this spring, my roommate, Teddy, and I have speculated about how the Republican candidates are likely to fare in states we’ve never visited. Our third roommate, Ben, stays quiet and seeks out the most reliable polling information he knows. “InTrade has Romney up by 4,” Ben will say. When he does so, my stomach churns a bit — and not because of Romney. InTrade — which bills itself as the “World’s Leading Prediction Market” — is a website that allows users to create betting ‘markets’ and buy or sell ‘shares’ in any yes-or-no prediction they can dream up. Shares range from $0 to $10, and their prices reflect the market’s overall confidence that the event in question will happen. Right now, for example, it costs a user $9.74 to buy a share in the market that Ruth Bader Ginsburg will be the next Supreme Court justice to retire or resign . In other words, the market thinks there’s a 97.4% chance that this event will take place. (InTrade’s election-specific predictions are quite accurate — and much more so than many polls.) You can also bet on election outcomes. Will Rick Santorum win the Pennsylvania primary ? Will Pat Toomey be the Republican VP nominee ? Will Barack Obama be re-elected? But as much fun as it can be to speculate about these questions, I can’t bring myself to feel good about the idea of gambling on election outcomes. It’s not because I oppose gambling in general; I think betting on how much money The Hunger Games makes on its opening weekend is just fine. (A little silly maybe, but fine.) Instead, my objection has to do with a feeling that our elections are profound, even sacred opportunities to express our highest ideals, and that gambling profanes them. Now, that’s not to say that our elections actually are particularly high-minded affairs. They usually aren’t. But they could be, if only we’d take ourselves and our democracy seriously enough to insist on it. Gambling on elections cuts the other way. It’s as if the InTraders are saying, “None of the stuff that’s at stake in these elections matters to us. We just care about getting ours.” (You can imagine the more cynical version: We’re screwed either way, so we might as well make a few bucks betting on when the ship will go down.) Maybe I’m being unfair. After all, some of these folks could be dedicated activists who also enjoy expressing their commitment to a particular candidate by putting money behind the campaign — gambling as a gesture of hope or faith. My roommate Ben has an even more sanguine take. Not only is betting on elections morally acceptable, he thinks, it’s actually valuable. After all, prediction markets provide a kind of information that you can’t get anywhere else. This information comes in the form of prices, which Ben takes to be an important signal of people’s real feelings about a matter. People might lie to pollsters, his thinking goes, but they’re less likely to lie to themselves when they’re deciding how to bet on Santorum stock . When Ben first explained this line of thinking, I felt a familiar kind of ethical tension. While I’m not comfortable gambling on elections, that fact that other people do so creates something I value. (After all, I want to know which candidate the markets think is going to win — and above all, I want my candidate to know so that his or her campaign can develop the most effective strategy.) But that doesn’t answer the basic question: how should we regard gambling on elections in the first place? Perhaps an analogy will help. Right now on InTrade, you can place bets on whether the U.S. or Israel will launch an air strike on Iran this year . (In fact, you can place different bets based on when you think a strike might occur.) When I told a friend about this, he responded, “Why would you create an incentive to rejoice at war?” He’s right. When we bet on trivial things — basketball games, American Idol — we don’t put our moral selves at stake. Regardless of how things turn out, the world won’t be meaningfully better or worse. But when we gamble on things like war (or elections), we create incentives for ourselves to want things that may run counter to our best moral instincts. No, I don’t want to see Tehran burn, but it would be nice to have that $50. These incentives encourage us to balance things that cannot be balanced. They may even affect our political behavior — distorting our priorities and inviting us to be a little more (or less) vocal than we might otherwise be. If that example seems extreme, take something closer to home. Would you bet on how long a friend’s marriage might last? How about the month in which a family member might die? If you said no, my guess is that you did so because you understand what another friend recently suggested to me: that part of being moral involves responding appropriately to things with moral weight. The world is a complicated and uncertain place. But that doesn’t mean that everything in it should be treated like a March Madness pool. Some things matter more. Some things are sacred, even. Gambling sullies them and sullies us. Note: this article originally appeared at The Wheat and Chaff .

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Blair Bowie: Disempowered Bankers Start Super PAC, Reveal Plans for World Domination

April 6, 2012

The American Banker Association recently announced that after years of being ignored in the halls of power, it will at last be creating its own super PAC to serve as its proverbial “big stick.” For too long, the banking industry has been stuck at 13 on the list of industries giving the most to members of Congress , drowned out by such vehemently anti-banking interests as “Misc. Finance” (12), “Lobbyists” (7), “Real Estate” (5), and “Securities and Investment” (3). American Banker editor-at-large Barbara Rehm writes, “Frustrated by a lack of political power and fed up with blindly donating to politicians who consistently vote against the industry’s interests, a handful of leaders are determined to shake things up.” While I am highly skeptical of the sentiment that “Congress is not afraid of bankers”, given that banking lobbyists outnumber banking reform advocates 25-1 and that the Chairman of the Senate Financial Services Committee seems to believe that “the banks own the place,” the most ridiculous thing about this announcement may just be ABA’s willingness to reveal its strategy for skirting the non-coordination rules. The Supreme Court and FEC explicitly prohibit Super PACs from coordinating with candidates and their campaigns. I generally interpret this to mean that having a direct conversation with a candidate is a violation of the rules. Yet Matt Packard, the Super PAC’s chairman, is apparently quite excited about using his new stick in that context, “If someone says I am going to give your opponent $5,000 or $10,000, you might say, ‘Yea, okay’. But if you say the bankers are going to put in $10,000 or $500,000 or $1 million into your opponent’s campaign, that starts to draw some attention.” When is Packard imagining himself having this conversation and what will he be asking for to call off the hounds? This statement speaks volumes about how the industry thinks about its involvement in politics. Note too that Packard says they may be directing money “into your opponent’s campaign.” He means that in the same way that one might give to Restore Our Future to support Romney right? Nope. While the coordination rules are twisted enough when it comes to candidate specific super PACs, Friends of Traditional Banking plans to go even further. The independen expenditure-only committee, according to Rehm’s description, will exist not to “touch the money,” but to direct it to the candidate’s actual campaigns. This is starting to feel like the scene where the Bond villain reveals his whole plan for world domination. Even with a feckless FEC on the beat, Friends of Traditional Banking seems to be inviting federal investigation. Rehm reports that the first thing prospective donors have been asking Utah Bankers Association president Howard Headlee is, “Is this legal?” Luckily, Headlee seems to have a Trevor Potter button for that.

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Adrian Nazari: Credit Card Breach: It Can Happen to Anyone, Do You Know What to Do?

April 6, 2012

Joining the likes of Zappos, Michael’s, Sony, Epsilon and the New York Yankees — Global Payments Inc. is the latest company to make headlines with a data breach originally reported to have compromised more than 10 million card numbers. Global Payments is a large third-party payment processor for Visa and MasterCard, and handles a substantial number of transactions for Discover and American Express as well. Global Payments has since confirmed that the breach was limited to their North American systems and believes that “fewer than 1.5 million card numbers may have been stolen.” An investigation is currently underway but we won’t fully know how many cardholders were impacted, or how extensive the breach, until the dust settles and the investigation is completed — which could take weeks, or even months. Are You Protected Under Federal Law? The good news for cardholders, if you can call it that, is the theft was limited to credit card numbers and did not include names, Social Security numbers, or addresses. This means the information that was stolen is limited to fraudulent credit card charges, which consumers are protected from by federal law. On credit cards, the Fair Credit Billing Act limits the liability for fraudulent charges to $50, and if a card number is stolen — and not the actual card — cardholders are not responsible for any of the fraudulent charges. For debit cards, consumers are covered under the Electronic Funds Transfer Act and are not be liable for unauthorized charges if the card was not physically lost or stolen. The main difference between the two is that with a debit card being directly tied to a checking account, cardholders have the additional frustration and inconvenience of waiting on the bank to investigate and return the fraudulently used funds. How Will You Know if Your Card was Compromised? Chances are, if your data was breached, you have already received — or will soon receive — notification from your bank or card issuer. When a consumer’s personal data is breached there are mandatory security breach notification laws in 46 states that require businesses to notify you if your personal information has been compromised in a breach. In most cases the bank or card issuer will automatically re-issue a new card with a new account number, effectively eliminating the extent of the theft. But, if you have not received an official notification, don’t assume you are in the clear; contact the issuer or check your account online to find out. Thieves are smart and may lay low and wait months, or even years before using the data they’ve stolen, and could hit you when you least expect it. What Steps Can You Take to Protect Yourself? Whether you think your data may have been compromised or not, one thing is clear: No matter how cautious we are as consumers, we are all vulnerable when it comes to the security of our personal information. We may not be able to prevent a data breach from happening, but we can take steps to protect ourselves and limit the damage if it does: Check your credit and debit card accounts regularly for any unauthorized transactions. If you can, don’t wait until your statement arrives to check for unusual activity or unauthorized charges. If you spot any unusual charges, contact the issuer immediately. Avoid sharing too much information online, including social networking sites. It doesn’t take much for a thief to steal your identity — a name, an address, a pin number. They don’t need your Social Security number or specific financial information to succeed. Review your credit reports for any unusual activity. The Fair and Accurate Credit Transactions Act (FACTA) gives you the right to a free copy of your credit report, once every 12 months, from each of the three credit reporting agencies through www.annualcreditreport.com , the federally mandated website. Monitor your credit and credit report information every month to catch any suspicious loan or credit activity, or sudden, unexpected drops in your credit score. Most of these services cost money but there are also free resources like CreditSesame.com, where you can get your free credit score with monthly updates to help pinpoint unauthorized or sudden changes to your score or balances, which are often indicative of credit card fraud or identity theft. What Can You Do to Minimize the Damage? By taking these precautions you’ll be able to identify whether or not your information or identity have been compromised. In the unlikely event that you are a victim of identity theft, it’s crucial to act immediately. Report the theft. Notify the affected account or company to report the theft immediately to stop any further charges or theft. Place a fraud alert on your credit report. A fraud alert lets creditors know that you may be a victim of identity theft and will alert creditors and keep an identity thief from opening new accounts in your name. To place a 90-day fraud alert on your credit reports you only need to contact one of the three credit reporting agencies to have the alert show on all three of your credit reports. File a police report. If the extent of the theft is more severe than fraudulent credit card charges, you’ll want to file a police report to document the crime and keep the damage from escalating even further. There’s no surefire way to prevent identity theft, but if you follow these basic guidelines, you can minimize the damage and save yourself a much larger financial headache in the event it does happen. Adrian Nazari is the Founder and CEO of CreditSesame.com , a free personal finance resource that gives consumers the power of bank-level analytics — providing comprehensive credit and debt analysis, monthly access to your free credit score, and personalized savings advice to help improve your finances, build wealth, and save money.

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Neda Talebian Funk: Fitness: The New ‘It’ Bag

April 5, 2012

Remember when dinner conversation between friends was once all about kids, fashion, and where you were traveling next? Today, the topic in vogue is fitness. It may start with, “Who is your favorite spin instructor and what class are you taking tomorrow?” and an hour later, the group is likely still talking about where and how they get their sweat on. Fitness is the new fashion, and — not surprisingly — it is quickly taking a greater portion of wallet share. At over $20 billion, the U.S. fitness market continues to grow at a solid clip. Further, the introduction of “a la carte” group fitness classes has created a growing market of fitness-goers who spend north of $300 per month on their group fitness classes alone. The boom in boutique studios and fitness apparel is proof. Fitness is not only what people are talking about, but it’s what they are doing. As Technogym’s Nerio Alessandri so perfectly once said, “Fashion is looking good outside; wellness is feeling good inside. It’s the new frontier of luxury.” What makes getting your heart rate up with a sweaty workout the new luxury? The Rise of the Boutiques. Let’s face it: The gym has not changed very much over the years. The big box format offers everything — its cardio machines, group fitness classes and locker rooms — all under one roof, and has remained pretty standard. Thanks, Jack LaLanne. Yet, in recent years, there has been a proliferation of “boutique” fitness studios offering a specialized workout. These workouts embody the “3 E’s,” as coined by fitness consultant, Jonathan Fields: efficiency, effectiveness, and engagement. Boutique studios also tend to be upscale: think $30+ per class in major cities. In fact, over the last three years despite the economic downtown, the NYC market has seen an incredible rise in the boutique studio — up over 30 percent, according to FITiST internal research. Chanel, Oscar de la Renta… and Lululemon. Walk down the street in NYC, LA, or any other metropolitan city and you will see more women in yoga pants than jeans. It’s a fact and a lifestyle. Fashion fitness brands such as Lululemon have revolutionized the fitness apparel industry. Remember working out in baggy soccer shorts and big t-shirts? Not anymore. Flattering, formfitting and highly technical sportswear is being worn not only in the gym, but to lunch, on weekends and even in the office. Want proof? Lululemon has posted over 30 percent year over year sales gains for the past nine quarters, and now boasts a market value of $10.4 billion… Yes, that’s billion. In the last quarter, the company’s sales per square foot were over three times that of luxury retailer, Neiman Marcus. And fashion designers themselves are mixing sportier styles into their lines and even doing collaborations with sportswear labels. Stella McCartney’s collaboration with Adidas has been among the more prominent designer athletic lines to date. The Celeb Factor. Simple truth: Thanks to the likes of Us Weekly , our culture is obsessed with celebrities’ every move, including how they sweat. Why do we all know Tracy Anderson? She trained Madonna and now Gwyneth. And who doesn’t want to look like Gwyneth Paltrow? People are more likely to fork over $35 for a class at a studio when they know it’s where Kelly Ripa gets her sweat on, Lady Gaga spends her birthday, or Matthew McConaughey blows off steam. In conclusion, fitness is simply the new “IT” bag, the season’s most talked about story — “seen in” is now “seen at.” For more by Neda Talebian Funk, click here . For more on fitness and exercise, click here .

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Mike Lux: Darwin: Scientist but Not Economist

April 5, 2012

I wrote a book that came out in early 2009 called, The Progressive Revolution: How The Best In America Came To Be , that talked about the history of the American political debate. One of my fundamental arguments was that conservatives are using the same arguments against modern day progress that their ideological ancestors used against the progress we made throughout history. What I underestimated, though, is how fiercely and broadly the modern conservative movement is trying not only to block advances in progress, but to actually roll back the gains of our history. Things that had seemed long settled only a few years back when I wrote that book are now being fought over anew, and not by trivial people on the fringes of our politics but by most of the leaders in the Republican Party. Over the last couple of years, we have seen the Supreme Court overturn 100 years of precedent in dramatically expanding corporate political power, and have seen Supreme Court Justices imply in oral arguments that Medicaid might be unconstitutional; we have seen leading Republican presidential candidates openly calling for the repeal of child labor laws, argue for letting the states ban contraception, and say that Social Security is unconstitutional and a Ponzi scheme; there was a Republican governor and presidential candidate, Rick Perry, who opened the door to his state seceding from the union; there is a Republican senator who called for a repeal of the Civil Rights Act of 1964 (although he later pulled back from that under intense pressure); and the Paul Ryan budget, passed twice by the Republican House and unreservedly endorsed by their presumptive, ends Medicare and Medicaid as we know them, and calls for a 95 percent cut in domestic spending over the next four decades. This was the stuff of the extremist fringe — the John Birch Society, the militia types, the neo-Confederacy fan boys in the South, the Ayn Rand apostles, the Christian Dominionists — until fairly recently. But this group of outside-the-mainstream ghouls has become the twisted heart and soul of the 2012 Republican Party. President Obama’s speech this week went after the extremists who control the Republican Party hard, and he nailed it. As a history buff, and someone who wrote at length about the original Social Darwinists in my book, I was glad to see him explicitly tie Ryan and Romney to their Social Darwinist ancestors: This congressional Republican budget is something different altogether. It is a Trojan Horse. Disguised as deficit reduction plans, it is really an attempt to impose a radical vision on our country. It is thinly veiled social Darwinism. It is antithetical to our entire history as a land of opportunity and upward mobility for everybody who’s willing to work for it; a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of the middle class. And by gutting the very things we need to grow an economy that’s built to last — education and training, research and development, our infrastructure — it is a prescription for decline. Just to give you a flavor of the original Social Darwinists, their intellectual founder was British writer Herbert Spencer, who happily applauded the divine right of Kings and “anyone who can get uppermost”. He attacked democratic forms of government, as well as trial by jury, where “12 people of average ignorance” would dare to sit in judgment of great corporations or wealthy people. In the U.S., the leading Social Darwinist was a Yale professor named William Graham Sumner, who said that every society had a choice between only two alternatives: “liberty, inequality, survival of the fittest” or “un-liberty, equality, survival of the unfittest.” It is ironic that the modern Republican Party is a place where most of its adherents reject Charles Darwin’s ideas on science yet have embraced them fully on economics. Here’s the problem, though: Darwin was a scientist, not an economist. His ideas have been accepted, and have thoroughly stood the test of time, in the realm of science. But when applied to economic policy in the U.S. in the 1880-90s, the 1920s, and the Bush era at the turn of this century, they have caused economic depressions and the massive destruction of the middle class every time. President Obama’s messaging on this is right where it needs to be. This paragraph is beautiful: In this country, broad-based prosperity has never trickled down from the success of a wealthy few. It has always come from the success of a strong and growing middle class. That’s how a generation who went to college on the G.I. Bill, including my grandfather, helped build the most prosperous economy the world has ever known. That’s why a CEO like Henry Ford made it his mission to pay his workers enough so they could buy the cars that they made. That’s why research has shown that countries with less inequality tend to have stronger and steadier economic growth over the long run. This is an election where it is very clear that people are going into the voting booth unhappy with the economy and with both parties. For the most part, they aren’t going to have faith in anyone on the ballot, and they aren’t going to be feeling optimistic about winning the future. They are going to need to see a clear contrast. On the one hand, they need to understand just what the Republicans are offering: a Social Darwinist, Ayn Randish future where all the benefits go to the wealthiest, who got that way because they are the “fittest” — where only the wealthy “job producers” get any benefits at all from government. On the other, they need to see Democratic candidates from the presidential level on down who they believe will fight without pause or fear for the middle class and those trying to climb the ladder up into it. From the looks of the president’s speech Tuesday, that is exactly what we will get.

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Annie McKee: The Evil Boss Reconsidered

April 5, 2012

“I can’t stand my boss.” “My boss is incompetent.” “I hate my boss.” “My boss is clueless.” It’s a sad situation, really, when statements like these are at the center of so many conversations at work. But it’s true: bosses are disliked, despised, disrespected and detested. More people leave jobs because of their bosses than because of pay issues, working conditions or the job itself. In fact, in a Gallup survey, fully one half of all workers would fire their boss if given the opportunity . So, if we want to improve our workplaces and work lives, we better start by looking at why so many leaders are falling short on such a grand scale. I’ve spent the last decade or so on the other side of this question — how to help leaders get better at what they do. It’s more fun to look at the problem with a solution in mind, but I keep coming back to the fundamental fact that too many leaders really do wreak havoc on people and organizations. Why does this issue persist? There are countless reasons, but a few stand out: First: We promote people for the wrong reasons. We revere the mind and we promote people who seem smart — regardless of their ability to deal well with people. We worship money and reward individuals for making it for our companies, no matter the collateral damage to people along the way. By the time a person has significant leadership responsibility, he or she has gotten loads of positive feedback — money, praise, promotions, you name it. Why should they think there is anything wrong? And if we do notice the problems with these dissonant individuals, it’s hard to convince anyone — so we see again and again that the easiest thing to quiet the storm is to promote them again. Second: Even if people want to learn how to lead, it’s difficult, if not impossible, to get this kind of development at work today. Most of our bad bosses have not learned anything at all about how to manage or lead people — that is, other than the basic plug-and-play that is the stuff of most leadership development programs in organizations. Fact: billions of dollars are wasted on leadership development programs every year , partly because they are designed and conducted in ways that ignore the vast proven practices for meaningful learning. The result: a few people learn something, most people learn very little — and even those small gains are lost over time — and we’re talking lost after only a few weeks or months, not years. And even the companies that have good programs have sidelined most of them for the last four years. Four years! That’s a generation in management terms, and accounts for the exceptionally low rate of employee satisfaction these days. Third: These bad bosses are completely, totally stressed out. If they ever had self-awareness, self-management or the capacity to create a resonant environment, these skills have become casualties of the Sacrifice Syndrome . We expect so much of our leaders, work is incredibly demanding, and our home lives aren’t easy either. Try working 24/7 for a few years, and see what happens. With that kind of stress, our brains are designed to shut down, to go myopic — and in that state you can say good-bye to clear thinking, good judgment and positive relationships at work or home. In the end, organizations create their own monsters. These bad bosses aren’t usually evil. Don’t get me wrong, I’ve met a few who are. I even worked for one. They are soul destroying. But so are the well-intended, generally good people who have turned into insecure, credit-seeking, micromanaging nightmares. What can you do? 1. The first thing you need to do is check to see if you are one of them. If you have become the person everyone loves to hate, it’s time for a change. It won’t necessarily be easy, but if you want to get back to the person you really are, you’ll need to take a hard look at what got you to this place. You’ll likely need to make some pretty major changes to your lifestyle so you can deal with the stress that is inherent in your job. You may need to put yourself in a learning mode — get a coach, find a good leadership program, develop daily routines that support you to be at your best more often, maybe even get a therapist. Yes, it might require even that. At the least, you’re sure to need to focus on personal growth. Professional development simply doesn’t happen without it. 2. If you’re not the problem — still a good leader, still creating a resonant environment for your team — you need to find ways to protect yourself from the dissonance around you. You can start by making sure your psychological defenses are strong and in place. Make sure you know that the behavior directed your way that hurts so much is not about you. It’s about your boss. It is his or her stress, not yours. It’s her insecurity, his lack of understanding about how to manage people. Defend yourself by refusing to let your bad boss hurt you. 3. You can also take some solace in looking down and around you. Make sure that you’re not “kicking the dog.” Instead of passing on the bad behavior, do just the opposite. Get yourself to the point where you can share positive emotions, not negative. Create an environment that is full of promise and excitement, not doom and gloom. Engage your natural optimism and focus on hope. Focus on empathy and compassion so you can direct your activities toward supporting others. Hope and compassion are two ways to literally shift your brain into a mode that helps you deal with stress — while you are also protecting and inspiring others. 4. Finally, you can stop the madness by promoting the right people. Don’t focus so much on results, focus on how people get results. Look under the rocks — what are they doing to people? Are they killing people to reach goals? Squeezing the life out of their team to get that last half percent of growth in the business? If so, it’s not worth it when you consider the debris they have left in their wake. No matter how unpleasant it is, you really do need to learn to give people honest feedback about their leadership skills. It’s time we look beyond smarts and focus on emotional intelligence — those are the skills that make good leaders and are the antidote to the bad bosses out there. It may be common sense, but it’s not common practice — so if we want high performing and compassionate organizations, it’s time to turn this around.

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Richard (RJ) Eskow: Good Guys Win One: With ALEC, Things Go Better Without Coke

April 4, 2012

Score one for the good guys: After being pressured by Color of Change and other progressive groups, Coca-Cola has left ALEC — the cynical corporate coalition that has pushed a bevy of anti-democratic, anti-middle class, and anti-consumer initiatives. Now that Coke’s come around, next up is Walmart. Their response on the ALEC issue was equivocal and unacceptable. And the issue needs to be raised directly and firmly with the other companies that back the organization – a list that includes AT&T, Bayer, Coca-Cola, ExxonMobil, GlaxoSmithKline, Johnson & Johnson, Kraft Foods, Pfizer and UPS. Standing Up This weekend on The Breakdown we interviewed Rashad Robinson , Color of Change’s executive director, about the Trayvon Martin case and the role of ALEC in “stand your ground” laws like Florida’s. He indicated that ALEC’s member companies were going to be a leading target of the campaign for greater political and economic justice. A few days after that interview aired, Color of Change sent an email to its mailing list that read in part: You and more than 85,000 Color Of Change members have called on corporations to stop supporting the American Legislative Exchange Council (ALEC) because of its role in voter suppression. We contacted Coca-Cola to make sure they understand that through their membership in ALEC, they are supporting racially-discriminatory voter ID… They told us they recognize the importance of voting rights but claimed that they weren’t responsible for ALEC’s voter ID legislation. But it doesn’t matter whether the company had a direct role in the legislation — by funding ALEC, Coca-Cola is supporting an effort to disenfranchise African-Americans, Latinos, students, the elderly, the disabled and the poor. Eventually, representatives from Coca-Cola stopped responding to our emails and phone calls. Will you help us hold Coca-Cola accountable for supporting voter suppression? No Defense It’s true that ALEC is like the United States Chamber of Commerce, in that many of its member companies don’t realize what it really stands for. But the ones who have consciences (or understand the power of consumer anger) will eventually respond, just as they have for the Chamber. (Many leading corporations have left that organization as it moves to the extreme right.) So the role of activists in this situation isn’t just to exert pressure, but to educate. Companies like Coca-Cola need to understand the real nature of the organization they’re supporting. These corporations do bear moral responsibility for the actions taken with their funding and support, and they should be held accountable. (We’ll be airing an interview this weekend with Zaid Jilani, who wrote an excellent piece on The Five Most Despicable Laws Passed by ALEC , which Zaid lists as “banning living wages,” “crippling collective bargaining,” “privatizing our schools,” attacking voter rights,” and “selling prisons to the highest bidder.” We asked Zaid about laws that didn’t make the top five, and they were pretty bad too.) A Coke and a Smile Coca-Cola responded either to the information or to the persuasion. As Think Progress reports , Coke officials told the Washington Examiner today: The Coca-Cola Company has elected to discontinue its membership with the American Legislative Exchange Council (ALEC). Our involvement with ALEC was focused on efforts to oppose discriminatory food and beverage taxes, not on issues that have no direct bearing on our business. We have a long-standing policy of only taking positions on issues that impact our Company and industry. As Think Progress notes, the withdrawal came just five hours after Color of Change sent its email. In other Coca-Cola news, the company just signed a deal with Dunkin’ Brands to make its soft drinks available at Dunkin’ Donuts, Baskin-Robbins, and other Dunkin’ facilities. If you ask me, it’s a good day for a Coke (classic only, if you ask me), along with a donut or a couple scoops of ice cream. Attention Shoppers Coca-Cola’s retraction came in the Examiner ‘s ” Secrets ” blog. Blogger Paul Bedard’s interpretation of the facts comes with a strong ideological bias, but the facts are clear: The good guys won. By contrast, Wal-Mart told the Examiner : Our membership in any organization does not affirm our agreement with each policy created by the broader group. Wal-Mart has a long history of supporting voter rights, and we continue to be a strong proponent of this issue. In fact, Wal-Mart was an active supporter in 2006 of the renewal of the Voting Rights Act of… One of Wal-Mart’s basic beliefs is respect for the individual, and Wal-Mart will continue to stand with all Americans in ensuring our right to vote. Not good enough. If you support people who are attacking the right to vote, financially and with your reputation, then you are supporting injustice. Attention Sellers : This could affect your bottom line in a big way. There’s a large majority in this country that feels disenfranchised from the political process — and is. They’ve been, in the crude words of bar patrons everywhere, “screwed, blued, and tattooed.” They’ve lost their jobs, or their wages have stagnated, while organizations like ALEC strip them of organizing rights and the chance for a job at a living wage. They’ve also been disenfranchised by voter laws like the ones ALEC supports, and by a money-driven, corporate political process. But that disenfranchised majority has enormous economic power — and it’s learning how to use it. One of our most effective tools for responding to the power of corporate money is by cutting off the source of that money. Heads up, Wal-Mart. Know who does a lot of shopping in your stores? People who have been victimized by ALEC policies: Poor people, minorities and people who are working more and earning less. They’re getting wise, they’re getting angry — and they’re getting involved. Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future and the host of The Breakdown, broadcast Saturdays nights from 7-9 p.m. on WeAct Radio, AM 1480 in Washington, DC.

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Lenwood Brooks: Government Spending on Autopilot: Prepare for the Crash

April 4, 2012

Last summer, a Federal Aviation Administration advisory committee study on the use of autopilot inaircraft drew a sobering conclusion: too much reliance on automation and technology are degrading pilots’ flight skills. Indeed, reports indicate autopilot malfunctions were a contributing factor in numerous airline accidents in recent years. Perhaps members of Congress should consider the implications of those findings as they take up this year’s federal budget and appropriations process. Because with a majority of federal spending now running on autopilot, we’re setting ourselves up for a fiscal crash. What do I mean when I say the budget is “on autopilot”? Right now, vast swaths of government spending are classified as “mandatory.” That means certain programs are funded automatically. In other words, they are funded outside of the yearly congressional budget and appropriations process. Most Americans don’t realize it, but more than half of federal spending falls into the mandatory spending category: think Social Security, Medicare and Medicaid. (To be exact, 56 percent of all federal spending was spent on mandatory spending during the government’s last fiscal year.) Meanwhile, as of last year, just over a third (37 percent) of the federal budget is categorized as “discretionary” spending. This is the part of the budget over which Congress has decision-making power through the yearly budget and appropriations process. In the last year, Congress has attempted to tackle spending in two ways. First, in August 2011, Congress passed the Budget Control Act, which laid out steps to reduce the deficit over ten years in exchange for an immediate increase in the national debt ceiling. But if you look closer at these numbers, many of the “cuts” are not actual reductions in spending — they simply represent a slower rate of spending growth — and entirely come from the discretionary spending category, the smallest part of the federal budget. The Budget Control Act also established the so-called super committee to identify further potential deficit reduction targets. However, the committee failed to arrive at an agreement by its November deadline, so a series of scheduled automatic cutstotaling $1.2 trillion are now slated to go into effect in January of next year (and will be spread out through 2021). According to the non-partisan Congressional Budget Office, of these cuts triggered by the super committee’s failure, 71 percent — almost three-quarters — come from discretionary spending categories. Getting a serious handle on growing spending in Social Security, Medicare and Medicaid, some of the biggest programs in mandatory spending? It won’t happen under this plan. Worse yet, after the bitter trench warfare and brinksmanship of the 2011 debt ceiling deal, not only have we failed to achieve serious budget savings, it’s probable we’ll hit the debt limit again this year, sooner than was originally expected. That means Congress is likely to find themselves in a new debt ceiling showdown before a single cut triggered by the super committee’s failure has taken effect. Do you see a pattern here? Congress has repeatedly abdicated its responsibility for effective oversight and decision-making on critical questions of how the federal government spends money. At a House Oversight and Government Reform on March 21, Representative Trey Gowdy (R-SC) proposed an interesting hypothetical question to Treasury Secretary Tim Geithner. If the upcoming debt ceiling increase could be “the last debt ceiling increase you could ask for — the final one — and you had to make it large enough for all current and future obligations, what would the request need to be?” “I just can’t do it in my head,” Geithner eventually said when pressed on the question. But the number “would make you uncomfortable.” There is a reason the number causes an uncomfortable feeling: autopilot spending is driving this nation into bankruptcy. President Obama has shown little inclination to step up and show real leadership on this issue. Meanwhile, the budget proposal from Rep. Paul Ryan, the Wisconsin Republican who chairs the House Budget Committee, is an improvement. Credit Ryan for seeking to preserve the Medicare guarantee while keeping costs down and personalizing Medicare for seniors. However, his budget proposal doesn’t address the growth in Social Security spending. What should Congress do? Take a cue from the world of aviation. One recommendation stemming from the FAA autopilot study cited above is that pilots should devote more time to manual flying, rather than relying on automated systems, so they are better prepared at recognizing the warning signs of an emergency. “We’re forgetting how to fly,” explained the committee co-chair, a pilot himself. There’s a lesson for Congress there: enough with the autopilot spending. Congress must take control of the federal budget process, which means taking responsibility for all spending programs to get the deficit under control. If Congress doesn’t start relearning how to fly, we all need to be prepared for a fiscal crash. Lenwood Brooks is policy director of Public Notice, an independent, nonpartisan, nonprofit dedicated to providing facts and insight on the economy and how policy affects our financial well being.

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Gene Marks: Prospective Employees: Please Show Me Your Facebook Page

April 4, 2012

We call her Aunt Dolores but she’s really not our Aunt. She is… now see if you can follow me… the 70-year-old sister of my sister’s father-in-law. We see her a lot at family functions. A year ago Aunt Dolores got on Facebook. And so that she could live up to her reputation as the “fun” aunt, she “friended” my teenage kids. They accepted. What happened next is no surprise. She saw pages that shocked her. Girls and boys trash talking each other. Lewd and racy photos. Profane and filthy comments. Inappropriate postings on each others’ walls. And that was just in her Bridge Club group. The activity on my kids’ pages was even worse! And then Aunt Dolores committed the ultimate Facebook faux pas: she commented on my son’s wall in response to something stupid another kid wrote. Grandparents and older relatives heed my warning. If you want to have an online relationship with your younger relatives remember this: stay silent! Aunt Dolores violated the code. Her reward: instant un-friending. My wife and I aren’t bad parents. We’ve sat through excruciatingly long middle school plays, listened without comment as 22-year-old teachers gave us advice on raising children and endured endless drives to Virginia, Maine and parts of Pennsylvania where most inhabitants have one eye and are married to each other’s cousin — just so that we could cheer on our kids as they played soccer, baseball, squash and track. Yes, squash. But we’ve drawn the line at Facebook. We don’t go there. The amount of dribble, trash talk and mostly undecipherable nonsense exchanged between middle and high school-aged kids would make any grown man’s brain melt after an extended period of exposure. When it comes to their online activities I have to cross my fingers and trust that my kids use judgment. I am being incredibly naive. But this is a battle I’m not up to fighting. You would think I would feel the same about Facebook privacy for prospective employees. But I don’t. In fact my stance, as a small business owner and employer, is different. When someone applies to work at my company I want to see what they’re up to on Facebook. Recently the House of Representatives voted down a bill that would restrict employers’ access to prospective and current employees’ Facebook pages. In a blog published last week, PCWorld ‘s Tony Bradley argued that he does not want employers to have any access to his Facebook page saying it is an invasion of privacy and a breach of security. “The practice is at least unethical, if not illegal,” he wrote . “There is simply no valid reason for an employee to give you his or her Facebook credentials — or any other password for that matter.” I respect Tony’s opinion on this issue. He’s a good writer and I’m a fan of his. But he’s not an employer. I’m an employer. And if you want to work for me, then I want to see what you’re up to on Facebook. I understand if this upsets you. It would upset me if I was applying for a job too. I wouldn’t want anyone digging into my Facebook activities. If you’re anything like my kids you probably have lots of things on your Facebook timeline that do not do you proud. As a parent that concerns me even more. You can’t be responsible for others writing on your wall or tagging you in pictures when you’re out having fun. You’re human and like all of us you’ve written things that you now regret. And maybe you’d prefer not to share the fact that you’re a member of the Maroon 5 fan group. Believe me, I wouldn’t want to reveal those details either. But as a prospective employer I want to see what you’re up to on Facebook. I don’t want your “password.” I don’t want to be able to go onto Facebook and be you. I don’t even want to monitor your activities on Facebook once you’re hired. All I want is to be “friended” for a short period of time while I’m evaluating you as a prospective employee. Because if I’m going to be a “friend” to you by giving you a job and allowing you to enter into my company, my community, my life, my employees’ lives… is it not so unreasonable to ask to be your friend in return? I may not even look at your page. It may not even be necessary. And if I do visit your site I doubt I’d even spend much time there. Like most employers, I get it. We know that our employees have personal lives and do goofy things. You should see the moronic exchanges I still have with my fraternity brothers… and we graduated college more than 25 years ago. I don’t really care about that stuff. But there are some activities that would raise my antenna. I’m no human resources expert, but I am looking for extreme issues. Is your online behavior severely inappropriate? Do you belong to any groups or participate in any activities that could be construed as harmful, racist, demeaning or offensive? Are you a member of the KKK, the Nazi Youth or the New York Mets fan club? Are you crossing a professional line in your personal life that I can’t ignore? This is my livelihood. Why do I care? Because before I hire someone I want to know as much information about that person as possible. And there are three reasons why. For starters, I have to consider the welfare of my existing employees. I can’t bring someone into the company who is disruptive or abusive or just not a good fit. At the age of 47, I am still the world’s worst judge of human character. I need all the help I can get. A simple interview doesn’t suffice. Checking references is never enough. A resume doesn’t tell me everything I need to know. If Facebook helps me determine that a prospective employee may be offensive to others in my office I want to know that. Whenever I hire someone I feel like I’m taking a gamble. Any information that can help me reduce this risk is welcome. Access to a candidate’s online activities would be very helpful. Secondly, for most small businesses hiring a new employee is no small matter. It’s a large risk. We are investing our time, resources and money in a new person. This is a person who will be representing my company to my customers, suppliers and partners. Who I hire says a lot about me and my company. If, after six months, it turns out to be a failure the result could be a major setback. We want to avoid this from happening. I hire someone with the intention of employing them for life. I don’t want to have to do this all over. So, again, the more information I have during the review process the better. Finally, in a close contest with another candidate, access to Facebook could turn out to be to a prospective employee’s benefit. Maybe there’s some educational activity that wasn’t on a candidate’s resume. Maybe the candidate is part of a group or has friends that I know who could serve as that extra little reference that I need. Maybe that candidate is doing something special online, like writing poetry or recommending books that sets that person apart or serves as a deeper connection to me. I’m not looking at just a piece of paper. I’m looking to invest in a person. I want to know everything about that person. I want to feel right about that person before I open up my life to him or her. And make no mistake: for any small business owner, our business is our life. And what if, as I was asked recently on MSNBC’s “Your Business,” a candidate refused my request to give me access to his or her Facebook page? Would that impact my decision to hire that person? It may. I wouldn’t be upset with that person because, like I wrote earlier, I wouldn’t be thrilled about giving up my privacy either. But, if by refusing to share with me information that other candidates are sharing, I may not know enough about this candidate to hire him or her. Is LinkedIn enough information? Maybe. But I always want more. It’s 2012. Most of us evaluate employees like it’s still 1960. We look at resumes and have an interview and call up a reference or two. Times have changed. The process for hiring people is changing too. Social media is now a deep part of our culture. And it should also be part of the hiring process. Another version of this post appears on The Philly Post .

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Ernan Roman: New Value Exchange: Preference Info to Drive Personalization

April 3, 2012

THE CHALLENGE: Consumer frustration with opt-out marketing policies is growing. Marketers need to convince them to share information regarding their preferences in exchange for a valuable, personalized relationship. Unfortunately, Opt-Out Is the New Norm There are now over 200 million numbers listed on the National Do Not Call Registry. Moreover, a number of states have introduced “Do-Not-Mail” bills and the topic of “Do Not Track” legislation is red-hot. Overseas, governments are taking even more drastic actions. For example, the Italian government banned all unsolicited mail, phone, email, fax and mobile communications. As consumers find more ways to avoid unsolicited marketing communications, panicked businesses are responding by creating opt-out relationships wherever they can. This is the wrong approach. Customer Frustration is Growing Today’s empowered consumers are questioning why the burden should be on them to opt-out. In fact, prominent opt-in campaigns have resulted in enthusiastic customer response. Consider the case of comedian Louis C.K. In recent years, Louis C.K. has risen to prominence as a stand-up comic, an actor, and, with his show Louie , a writer, director and editor. And with his self-produced and distributed “Live at the Beacon Theater” video, he’s setting an important example for online marketers. Rather than forcing his consumers to opt-out, he asked them to opt-in — in a prominent, tongue-in-cheek way: “I’m going to be offering other things through this site. Would you like to hear about them? – Yes, I’d like to receive further emails about Louis C.K. things. – No, leave me alone forever, you fat idiot.” The latter was selected by default. The customer response was unequivocal: “‘Opt in’ as the default is such a minor thing, but it makes people feel good.” Create a Reciprocity of Value Rather than making “opt-out” the default, marketers should compete to engage consumers with compelling value propositions that motivate them to opt-in. The most compelling value you can offer is relevance. Consumers are eager for meaningful personalization. The challenge for marketers is to make them aware that, in order to receive or access increasingly relevant information, consumers must share increasing amounts of information regarding their preferences. Microsoft used Voice of the Customer (VoC) research to create a highly personalized experience in their Business Resource Center, which asked over 14 detailed business questions in order to deliver targeted and relevant information. As a result, they have achieved opt-in rates as high as 95 percent. Three Takeaways for Marketers > Create a Reciprocity of Value Consumers opt-in to share increasingly detailed personal preference information in exchange for marketer’s promises to deliver relevant information and offers. > Opt-In Is Not About Passively Agreeing to Receive Email It’s about actively opting-in to a relationship and self-profiling your preferences and aversions. > Consumers Are Eager to Tell You How They Want to be Treated The key is to ask. Ernan Roman is President of the marketing consultancy, Ernan Roman Direct Marketing. Recognized as the industry pioneer who created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing, and Voice of Customer Relationship Research. Ernan was recently inducted into the Marketing Hall of Fame. Clients include Microsoft, NBC Universal, Disney, Hewlett-Packard and IBM. Ernan was named to “B to B’s Who’s Who” as one of the “100 most influential people” in Business Marketing by Crain’s B to B Magazine. His fourth and latest book on marketing best practices is titled: Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay . Ernan is also the co-author of “Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing” and author of “Integrated Direct Marketing: The Cutting Edge Strategy for Synchronizing Advertising, Direct Mail, Telemarketing and Field Sales.” www.erdm.com ernan@erdm.com

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Rabbi Peter H. Schweitzer: 10 New Plagues For Passover 2012

April 3, 2012

The Passover holiday, which this year begins on Friday (April 6), celebrates the story of freedom of the ancient Hebrew people from Egyptian bondage. But more than just a compelling lesson about our legendary past, it is an urgent call for justice, equality and freedom for those who are still oppressed today. According to the Exodus story, Pharaoh had an obstinate heart and refused to let the Hebrew slaves go free. As a consequence, he brought 10 plagues on his land, including blood and frogs, lice, gnats and flies, murrain and boils, hail and darkness, and finally, the death of the first-born Egyptians. Pharaoh ultimately capitulated, but we are cautioned not to rejoice at his downfall or that Egyptians were drowned in the Red Sea while attempting to catch the fleeing Israelites. Instead, during the Seder (service before the Passover meal) it is a custom to recite the plagues and spill a drop of wine at the mention of each plague, thereby diminishing our pleasure. In recent years, many new modern Haggadahs have been created — the books used to retell the Passover story — and they are likely to incorporate a list of “Contemporary Afflictions,” including AIDS, drugs, hunger, illiteracy, pollution, poverty and racism, modern plagues that continue to darken our lives today. As we find ourselves in the midst of the latest presidential election cycle, an affliction unto itself, here is a set of 10 New Plagues for Passover 2012. 1. Out-of-control SuperPACs that are unaffiliated, uncoordinated, unassociated and secretly run by billionaires. 2. No-holds-barred political consultants who run unfettered, unrestrained, carpet-bombing smear campaigns. 3. Fear-mongering politicians who foster anxiety and anger rather than confidence and hope. 4. Arrogant candidates who sarcastically deflect important and legitimate questions with snide responses that scapegoat the “elite” media. 5. Puritanical religious crusaders who make outrageous attacks on contraception, freedom of choice, women, gays and lesbians, teachers and union members, as well as intellectuals and liberals and the colleges that “indoctrinate” them. 6. Rogue robocalls that are unleashed, unregistered and illegal. 7. Bloviating, bombastic, pompous and inflammatory talkshow hosts. 8. Crackpot conspiracy theorists who don’t care about facts, evidence or truth. 9. All-powerful, self-interested banks and financial organizations that don’t care about the client. 10. Otherwise reasonable, caring people who let them all get away with it. Rabbi Peter H. Schweitzer is the leader of The City Congregation for Humanistic Judaism (New York City) www.citycongregation.org. He is the author of “The Liberated Haggadah: A Passover Celebration for Cultural, Secular and Humanistic Jews.” (secularhaggadah.com)

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