Friday, March 22, 2013

Catskill Review of Books Friday 22 March Wall St

 This week's Catskill Review of Books features Jonathan Macey about his book "the Death of Corporate Reputation" a devastating and readable critical analysis of Wall St.

The Catskill Review of Books
3:30 pm  every Friday on WJFF 90.5 FM

Eco-Terrorism Can Be Fun

Here is Friday's  Catskill Review of Books show, broadcast 3:30 EST
in which I interview Robert Ferrigno about his new book, The Girl Who Cried Wolf

The Catskill Review of Books
3:30 Every Friday on WJFF 90.5 Fm

A Modest Proposal! UN and Israel

I was in an Irish bar with Mo Sacirbey, the former Foreign Minister of Bosnia, when a local woman who had overheard us talking about the UN launched into an intemperate tirade against the organisation. Oddly enough, it inspired a modest proposal for the UN and Israel Lobby to work together for a swift response to the US budget crisis. But first, some background. In Blazing Saddles, one of the funniest films ever made, the black sheriff holds himself hostage at gunpoint. This improbable scenario is now being enacted on Capitol Hill. To get a budget agreement Congressional leaders signed a pact that would bring about “sequestration” - deep across the board cuts in Federal spending - including for that Republican Shibboleth, the Pentagon, which they hoped would force Congress to deal.

Fully aware of the voting proclivities of pensioners, the authors of the deal agreed that sequestration would not affect Social Security and Medicare the old age pension and medical programmes, which, technically are pre-paid from previous pension contributions and not part of the budget, although Republican die-hards keep circling them while sharpening knives.

Alas, the framers of the economic suicide pact underestimated the ideological obduracy of the new Republicans, so at a time when the economy teeters on the brink of recovery Federal spending cuts begin, laying off workers and stopping hiring new ones. The Obama administration is, understandably, talking up the consequences. Like  Blazing Saddle’s Sheriff Bart (played brilliantly by Cleavon Little, by the way) he is dealing with idiots, in this case the GOP economic illiterates.

It will indeed have an inhibiting effect on the economy, but the heavy spending cuts would be way down the line. The defence programmes are already committed which is why Boeing its peer companies are not already strafing Capitol Hill.

But then in ride the hobby horses.  The Israel Lobby is trying hard, but discreetly, to ensure that the steady torrent of cash from US taxpayers to its favourite state continues unchecked through the sequestration. Traditionally the Lobby hid behind the Foreign Aid budget as if food for starving refugees were in the same category as phosphorus shells for the IDF. But some of its supporters now want to decouple to connection.

“Despite ongoing budget woes, it is critical that the United States live up to its aid commitment to Israel,” AIPAC states. “As our one reliable Middle East ally, Israel serves critical national security objectives. Any reduction in that aid would send the wrong message to Israel’s — and America’s — enemies.”

It sends a message to US voters as well which is why wiser souls who support Israel want to keep their heads down, since taxpayers who do not have a national health service and free higher education might cavil at shovelling their money as aid to a state that does - and which uses the aid to defend settlements that Washington opposes!

And so to my proposal. An odious, albeit ironic comparison of aid to Israel and dues to the UN as a packaged, essential public-diplomacy exception to the sequestration. While most countries regard United Nations dues and peacekeeping contributions as treaty-bound obligations, the US Congress treats them as discretionary items, ever since they began, half a century ago to penalise the organisation for its votes on, of course, Israel. Under Bush’s second term and under Obama, the US has essentially been paying up without too much demur, which is just as well since peacekeeping operations in places like Mali depend on a flow of contributions from richer countries, above all the US which is desperately interested in Saharo-Salafist affairs.

Listening to the rabid pro-Israeli supporters among local New York politicians, this might appear to be a stretch, since antipathy to the UN is in their ideological chromosomes. But in contrast to their local supporters, Israeli politicians assiduously court the organisation. Secretary General Ban Kimoon welcomes them when they visit New York - even though his public statements forcefully repeat the official UN lines on, for example settlements and Gaza, that the American lobbyists would punish any American politician for. But Ban has a rare talent for understated diplomacy that allows him to speak truths and to keep the Israeli pols coming - albeit probably helped because they can do some fundraising of their own in New York while visiting the UN on official business but also because they have a talent for not listening to advice from outsiders anyway.

Such a tie in would neutralise the bloc that does most harm to UN financing in DC and do no harm at all, since just as it has always done,  in the end, AIPAC will get its money even if kids go hungry in the USA,

Monday, March 11, 2013

CEO's, the new Robber Barons

Comment: The CEO is always right in Delaware

) | 6 Feb 2013  Investor Relations magazine  | Print

It should be shocking there is no national company law in the US

An innocent alien looking at the business directory for Wilmington, Delaware might assume the town is a mighty humming hive of industry, whose citizens multi-task to the max. One building alone – 1209 North Orange Street – is home to more than 6,500 corporations and is the address of more than 200,000 businesses.

Wilmington’s 70,000 people have to operate almost three corporations per person from each one of the city’s buildings. Some of the corporations ‘in’ Wilmington probably employ more people globally than the 750,000 residents of Delaware; many of them do not employ a single person in the state. It brings to mind the old medieval quiddity of how many angels can dance on a pinhead: it seems an infinite number of companies can ‘work’ out of one building. It is time to take a step back.

On reflection it should be shocking that there is no national company law in the US. We talk of corporate governance and shareholder capitalism, but the US is completely Balkanized in its corporate legal frameworks. Actually, that’s unfair to the Balkans: as countries accede to the EU, their company laws have to adhere to minimum European standards, which are generally quite high.

It has been argued that in the US, the 50 states with their quasi-independence offer a social laboratory where different political and economic ideas can flourish. In fact, it’s a race to the bottom – which is situated just north of the nation’s capital, in Delaware.

Apart from the opacity of the ownership of Delaware corporations – by comparison with which Liechtenstein and the Cayman Islands look like temples to transparency – the real issue is the pernicious reinforcement of the overweening power of corporate executives that decades of Delaware governance has wreaked.

Its judges rule against employees, shareholders, pensioners and consumers alike. Its negation of anti-usury laws common in other states makes the plastic capital of the US the state that grasping credit card companies like to call home. That in turn makes it a major contributor to the house of cards that recently collapsed.

Litigation in Delaware takes place in a Chancery Court, which is one of the more recondite branches of Anglo-Norman law, famous for centuries of obscure decisions invoking even more obscure precedents to deliver the verdict the judges’ prejudices demand. Delaware, however, sells itself on the speed of its judgments – and its reliability: the CEO is always right. Sometimes there is a contest, when there is litigation between companies, but the only question then becomes: ‘Which CEO is right?’

The founding fathers were generally very dubious about corporations, seeing them as shifty boondoggles set up by shysters such as Aaron Burr to make themselves rich. Maybe that reluctance was one reason they were not mentioned in the US Constitution, but have now, as we know, been retrospectively palimpsested into that document by a tortuous line of reasoning from the 14th amendment that sought, unsuccessfully, to guarantee ex-slaves equal rights. Corporations’ present personhood guarantees them perpetual impunity: they can claim almost all of the prerogatives of citizenship except the susceptibility to punishment.

But if ever the Federal government had a hook to grab, it is surely regulating companies that deal nationally, in interstate commerce. Surely there is nothing constitutional to stop Congress requiring any corporation operating in more than one state to abide by basic minimum standards for its governance and conduct.

In the meantime, perhaps, whoever moves a company HQ to Delaware should be prosecuted under some form of the Mann Act: transporting corporate people across state lines for immoral purposes. Certainly, shareholders should assume the worst of any CEO who makes such a move.