BEIJING ON THE GREAT SALT LAKE!

Did you see the pictures of smog in Salt Lake City last week on the NBC Nightly News? They had one of those winter temperature inversions that traps all the air pollution that the city creates in the Salt Lake valley and the smog got really bad. It looked Beijing bad! Because I lived in the greater Salt Lake area for almost ten years back in the 70s and 80s my first reaction was to question, "how they could let things get so out of hand?" But the more I thought about it, I remembered that even back in the late 70s Salt Lake City had this same problem, just not as bad and I didn't do or say a word about it. I just drove my cars and went to work and ignored it like everyone else. I didn't write a letter to the editor or try to organize or donate money to organizations trying to cleanup the environment. Why was I so complacent?

That is real question at the heart of this problem, "why do we take the health of our environment for granted?" I know many people in Salt Lake and they are very involved in their community and care deeply about their families. They volunteer, donate to charities and get involved in their local government. These are good people, so why the blind spot on the environment? It is a blind spot that almost all of us seem to share but what is causing it? 

Is it the old quasi-religious belief that God gave the planet and all nature to man to have dominion over so we can do whatever we want with it? Or could it be an Industrial Revolution era faith in unrestrained capitalism? Sort of an economic Darwinist point of view where the markets will sort out what species survive, which ones don't and technology will pull us through the bad spots. Perhaps, it is just a form of following the path of least resistance until the situation gets so bad that we can't ignore it anymore. From the look of the pictures on TV Salt Lake City maybe at that point.

What do you think will shake us out of our complacency on global warming?

THE BOEING 787 DREAMLINER, MADE IN AMERICA OR JUST ASSEMBLED HERE?

Have you ever noticed that when a new product comes out, whether it's a new type of car or a new computer operating system, there always seems to be a bunch of bugs in it for a year or so. This seems to hold especially true for very complex products, like aircraft. In fact, you could probably make a generalization that "the more complex the design or product the greater the likelihood of problems with it." So when the Boeing 787 Dreamliners began to have problems, even before they got off the assembly line, I wasn't entirely surprised to hear that as much as 30% of the production of parts for the plane had been outsourced to companies offshore, although the final assembly was kept in the US. Here Boeing is building a radical new design, with new composite materials and cutting edge technologies and it scatters it's parts production across the globe, in many time zones , companies and countries with a variety of languages. Common sense would seem to dictate that such a highly experimental and complex project should have been  kept closer to home, with more reliable suppliers that could have been more easily supervised. 

The folks at Boeing are very bright and have been building jetliners for years, so what gives? Is it the corporate herd mentality that seemed to prompt Boeing to move it's headquarters from Seattle to Chicago so they could rub elbows with the big boys? Is that same lemming like thinking driving Boeing's management to push off shoring because everyone else is? Is this some sort of strategy to break into the Chinese aircraft market to try to secure future growth prospects there? Or, is it just about money, cutting overhead, cheaper labor and the like? Unions are tough to deal with and skilled American workers demand good wages and benefits unlike those in many other countries. 

So, I wonder, how is this new offshore strategy working out? Boeing, now  has a new jetliner that's three years behind schedule and all 50 planes it had in service have been grounded by the FAA. I'm sure that in time the engineers at Boeing will get the bugs worked out of this plane but I'll bet that things are pretty intense back in Chicago right now. In the mean time we are all getting a very public demonstration of the difference between "Made in America" and "Assembled in America." 

Here's an interesting article I ran across on this subject:

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/18/is-outsourcing-to-blame-for-boeings-787-woes/

Is this just about working out the bugs in a complex design or is it really about corporate greed? What do you think? 

GOOD-BYE 112th CONGRESS AND GOOD RIDDANCE!

As I watched the 113th Congress being sworn in on TV I couldn't help but think of how bad the 112th congress has been. The Republican hatred for all things Obama, combined with the Tea Party's simplistic economic theories have just about brought the Federal Government to a halt but that's really what they want, isn't it? You've heard their cute little lines about how "government isn't the solution, it's the problem" or that they want to "shrink government down to a size where they could drown it in a bathtub." It's the sort of political philosophy  that claims government doesn't work and then goes about crippling it to make sure it can't function. Trouble is that the 112th Congress had a large number of members who seemed to really believe this sort of stuff and unfortunately for the people of the United States the 113th Congress does too. I think the next couple of years will be a painful repeat of the last two, like a bad B movie sequel, let's call it Congzilla II or Congzilla 113. Their behavior is so bad as to almost be funny but they have been doing real harm to our economic recovery and they seem to be planning to do even more damage.  I sincerely hope I'm wrong on this for all our sake's.

BEWARE OF BANKERS BEARING GIFTS!

"What's in your wallet?" is the slogan of one of the big banks but the proper question should be who's in your wallet and how much can you trust them? No, I'm not talking about your ex-wife or your teenage kids I'm referring to the organizations who are lending you money, the financial services industry, in short the banks. You wouldn't buy a new plasma flat screen TV on credit if you had to borrow the money from some guy named Vinny down at your local neighborhood bar. Yet we don't think twice about whipping out the credit cards and taking out instant loans with banks who's business model has become the equivalent of legalized loan sharking. How many ex-home owners were ripped off by their banks using tricks like "Robo Signing" of fraudulent documents during their foreclosure process? How many hundreds of millions of dollars were lost by investors and pension funds who were sold AAA grade mortgage backed derivatives by their investment banks who knew the derivatives were worthless and then bet against them using credit default swaps? I know, banks, credit cards and mortgages are all facts of modern life but I guess what I'm saying is when dealing with bankers one should be very cautious. No matter how warm and fuzzy their commercials are they are not loaning you money to help you out, or build a lasting business relationship, or help the community, or help your business grow or any of the other lines of BS they spout. It's all about the money, the fees, the commissions, the interest payments, your well being never figures into their calculations. So Borrower Beware! 

A BANKER A DAY KEEPS THE DEPRESSION AWAY!

In 2008 the global economy crashed and we nearly got sucked into a second Great Depression. This was due in large part to the sub prime mortgage crisis  created by banks lending massive amounts of money to people they knew couldn't possibly pay them back. They blew up the global economy by securitizing that same bad debt into mortgage backed securities which they sold all over the World as AAA grade derivatives. By using credit default swaps, many of these banks  bet  that the derivatives they sold would fail. To be able to securitize mortgages they created an organization call "MERS" which was supposed to keep track of who owns all of these securitized mortgages but in fact destroyed the paper trail for millions of mortgages and has shaken the very foundations of real estate law in the United States. MERS had the added benefit to the Banks of avoiding paying millions in title transfer fees which are owed to local municipalities when the ownership of a property is transferred.

These same banks got a 800 billion dollar bailout in 2008-9 and trillions in nearly zero interest loans from the Federal Reserve to keep the entire financial system from collapsing but they continue to pay massive bonuses and to gamble in the derivatives markets. Now we've found out that many of the largest banks were manipulating the LIBOR which is used to set most of the interest rates in the World but if that wasn't enough one of the world's largest banks, British based HSBC has just agreed to pay a 1.9 billion dollar fine for money laundering. 

My fear is that as long as the big banks are allowed to continue to conduct business as usual we are in danger of having a repeat of 2008. The Dodd Frank Act was a good first step but major restructuring of the big banks maybe necessary. The next big bank that gets in trouble I think should be taken through bankruptcy and broken up. I'd also like to see the an updated version of the old Glass Seagall Act passed by Congress to separate commercial banking from investment banking. So what do you think? Is the Volcker Rule going to be strong enough? Have we adequately dealt with derivatives? Is Congress going to just ignore the problem until it blows up again?

SCROOGE, ALIVE AND LIVING IN CORPORATE AMERICA!

You could have called it a classically Dickens type of day. It was cold, with traces of snow in the grass and flurries swirling in the wind. I had just dropped off a Christmas present and mailed some cards. It seemed like the perfect day for some hot chocolate and a pastry so I walked over to my neighborhood Starbucks. As I approached the building I saw a big banner hanging over the windows. "OPEN ON CHRISTMAS DAY" was all it said but it instantly occurred to me that even Ebenezer Scrooge gave Bob Cratchit Christmas Day off. When I got home I did a little research and it appears that Scrooge is alive and well and living in corporate America. I worked for many years in retail and there use to be only three holidays that everyone got off, Thanksgiving, Christmas and Easter but apparently that's no longer the case. Is one more shopping day a year going to make that big of deal to a company's bottom line, or stock price, or a CEO's year end bonus?  I think it's time to start pushing back against companies that do this kind of stuff. What do you think? Would things like boycotts work?