From Where I Stand: Step 139

All right, so where is this new blog that is going to take the place of Time to Reflect and From Where I Stand. Announcing the new blog written by yours truly is called Hi Oh Silver. If you click on the link it will take you to hiohsilver.com.

Of course that is the big story of the day. While my life story will continue to appear here at Every Step of the Way, the blog for people interested in an exchange of ideas from politics and business to entertainment and the economy with a bit of humor thrown in as a bonus will be found at Hi Oh Silver.

Have a Fantastic Fourth of July!

From Where I Stand: Step 132

As reported last week a jury found a counselor at a Youth Correctional Facility here in the great state of California had violated the civil rights of four of the wards at the facility. Attorney General Jerry Brown’s office represented all three defendants: the counselor, the superintendent of the facility, and the state director of juvenile justice. They were ordered to pay awards totaling more than a million dollars, and attorney fees plus punitive damages that the judge is working to assess. To date there has been no response from Jerry Brown, Meg Whitman, anyone associated with the campaigns for governor, or any of the major media outlets in the state.

Perhaps Meg Whitman found herself too busy defending her own actions. In an article in Friday’s Los Angeles Times, Whitman, who was the CEO of EBay in 2007 when the incident took place, stated, “Young Mi Kim and I had a verbal disagreement and it escalated and I actually, as the New York Times accurately reported, you know escorted her out of the room and then I went back to what I needed to do in that meeting.”

It is unlikely we will ever know the exact content of the disagreement, or the level of force exerted to escort Ms. Kim, but whatever it was Kim reportedly received a $200,000 settlement. This figure is slightly less according to my source than the quarter of a million dollars the attorney general spent for expert witnesses whose purpose was to solidify the defense of the aforementioned correctional officials.

When asked if Attorney General Jerry Brown knew about this expenditure my source responded by asking, “What do you think? Who else is going to approve spending that kind of money?”

During the past week I also learned that while the attorneys for the plaintiffs have spent six years putting this case together none of them have been compensated, and may have to wait for the outcome of any appeal the state may file on behalf of the defendants. Meanwhile, I also learned, outside counsel retained to assist the state was paid for by the prison guard union.

Again, this is the same union that is contributing large sums of money to elect Jerry Brown governor of California. Of course if Meg Whitman continues to have questions raised about her temper, management style or abuse of employees, there may not be anyone qualified other than the Ella Baker Center for Human Rights to ask why when a unanimous jury finds “clear and convincing” evidence that the defendants violated the civil rights of these four former wards is the state still considering their appeal.

A logical person might further question whether this civil case warrants some form of criminal prosecution. As I recall, Jerry Brown was the tough on crime mayor of Oakland, and has spent time as attorney general portraying himself as a protector of innocent victims. Naturally the burden of proof is different in a criminal case, but at least it might say the state of California cares about its citizens, even incarcerated ones, more than someone who uses his position as a state employee to abuse those citizens.

What do you think? Tell us in the comment section. Or, write Jerry Brown and Meg Whitman and tell them what you think about this case.

From Where I Stand: Step 125

When we sat down for bagels and juice the discussion quickly moved beyond the lack of diplomacy by BP CEO Tony Hayward and the ridiculous apology he received from Texas Congressman Joe Barton to the intriguing results of a trial where all twelve jurors found an official at a Youth Correctional Facility in Chino, California had violated the civil rights of four wards by forcing them to have sex. Mitch, who was barred from discussing the matter for the five months of trial where he represented one of the plaintiffs, said the attorney general’s office had refused any effort to resolve the matter during the six years he had been working on the case. Now, he says they are considering an appeal.

When Dan asked why he had not heard about the case in the news Mitch explained that only the San Bernardino Sun had written an article about the outcome. He said other media might be waiting to see if an appeal is filed. In the meanwhile the judge is determining punitive damages and attorney fees, which the defendant has been ordered to pay. Were the attorney general to decide to appeal the state would have to put aside a promissory note one and a half times the total of the awards and fees, according to Mitch.

Manuel wanted to know if that meant his money, as a taxpayer would be set aside for this case. Mitch assured him that is what would be done.

So, what pray tell, we all wanted to know, was the basis for the defense? Mitch said they had a number of expert witnesses, none of whom had ever visited this facility, state this kind of behavior could not have happened. One expert on prison culture claimed to be writing a book with research to support the defense’s argument. Apparently none of the twelve jurors were buying the expert testimony nor do I foresee any of them running out to purchase the book.

It occurred to me the individual found to have perpetrated this act might be represented by the correction officers’ union. While Mitch could not substantiate whether or not this person was a member of the union he did say the prison guard union was well known to be one of the most powerful organizations in the state. Of course this stems from a multiplying of the prison population in recent years, but that’s a conversation for another day.

When I got home I found in the Sun article both the superintendent of the facility and the head of the California Youth Authority at the time of the incident were found responsible for imprisoning the four youths in conditions “that exposed them to a substantial risk of serious harm and/or sexual abuse.” One of the attorneys stated, “They have to take affirmative action to protect the wards. Prison staff were warned repeatedly that Shelby was a sexual predator, and absolutely nothing was done about it.”

So one might wonder, is there a point of law that merits appeal in this case? Or, is there reason to speculate that since attorney general Jerry Brown is running for governor support by the correctional officer’s union might influence such a decision. While no direct link to my knowledge has been established it is essential his office repudiate the slightest whiff of impropriety or be subject to the wrath of the voters, or at least Meg Whitman.

One group, the Ella Baker Center for Human Rights seeks support for a petition asking Attorney General Brown to let the judgment in this case stand.

What do you think? Please let us know in the comment section.

From Where I Stand: Step 118

When I sat down yesterday at the luncheon following the rabbi’s daughter’s Bat Mitzvah and started to talk with my friend Dr. Mark a dean at California State University-Fullerton about what he did on his furlough day, I had no idea the question, “Is a college degree still worth it?” was the headline story in Saturday’s Los Angeles Times. Our conversation centered around the growth in prison budgets being many times the level of higher education during the past decade, while the article pointed to the “vast majority of job gains this year have gone to workers with only a high school education or less,” and the prospects for the future look like that trend will continue.

Needless to say this is disheartening for me to hear since following my parents’ advice led to two advanced degrees, nearly a dozen certifications in three states, and two years of rejection in the pursuit of returning to full time employment. In the words of Rodney Dangerfield, “I just can’t seem to get any respect.” Actually I’ll forgo the respect factor in favor of putting those of us who bought into the American dream of improving oneself through education back to work.

To make matters worse most of us who bought into this ploy, no doubt perpetrated by an educational aristocracy with connections to some Chinese, Indian, or Waltonian demonic plot, foolishly led our children astray with this illusion. It certainly appears conspiratorial when your oldest child is an adjunct faculty at a Midwestern university working on her doctorate, your second child graduated from law school and is studying for the California bar, and your youngest child is completing her bachelor degree in a state more interested in protecting menial jobs for high school dropouts than developing the talents of the brightest at their noteworthy institutions. Why did the Times wait a decade for them to pile up their own individual debt accounts before raising the question about whether or not it’s a worthwhile venture?

Almost as astounding to me is the notion by various economists, bureaucrats, and members of the media that we are supposed to somehow buy our way out of this Great Recession. All of them seemed to be equally amazed when consumers put away their credit cards and sales fell in May. While most consumers are deep in debt like myself, those with resources may be following Franklin’s advice and saving for those rainier days ahead.

Speaking of rainier days, Robert Reich, the diminutive secretary of labor in the Clinton administration now teaching economics at Berkeley, reported there is now a 50:50 chance there will be a double dip recession. For those of us who have yet to climb out of the first dip this comes as both further bad news and no surprise. When banks which double dipped by making unsecured loans and writing them down with the assistance of both the Republican and Democratic administrations stop gambling in derivatives, provide a rate of interest on savings in line with rates charged for loans, and invest venture capital in local small businesses the economy will recover.

Meanwhile we may seek refuge from the storm by losing our worries for a few hours watching the classic match up of NBA Finals rivals the Lakers and Celtics. For sports fans not into professional basketball there is the thriller from South Africa. By the way I know both Kobe and the G-man chose to skip college and March Madness in favor of ever increasing economic opportunity, but I have no idea how many soccer players on the men’s and women’s teams decided college had nothing to offer them.

How about it: has your college degree paid dividends? Are you still planning to send your kids to college? Let us know in the comment section.

From Where I Stand: Step 111

A consensus is the census is only a temporary solution to an extensive lack of growth in labor during a protracted period of egregious economic woes. While the growth in jobs jumped to 431,000 in May, the most in a decade, the overwhelming majority went to census workers, a body of temporary government employees, which distorted the number. As a result Wall Street wasn’t buying and took a dive of 300 points on Friday.

Which brings me to the dilemma I face when trying to assess what is really happening in this wonderful land of ours. On the one hand I want to see the economy grow and people go back to work. Efforts by the government to stimulate growth, such as the Workforce Investment Act that provides programs those of us in transition use to return to productivity are vital. Yet, like my conservative friends I know sustained growth requires expansion in private industry.

On the other hand to see the same corrupt corporate practices that built the bubble that burst to bring about this tremendous economic catastrophe benefit from a populace too willing to put their hard earned dollars back into it makes me want to puke. One has to ask is there any other way to measure economic success besides the figures reported on the stock market? It is hard to believe I am alone when I feel a smile welling up inside knowing some oil, pharmaceutical or banking executive took a hit when the market tumbled. Yet, like my liberal friends remind me their pensions are dependent upon the sustained growth of that same market.

One thing we can be sure of is the people on Madison Avenue, where I crossed the street a week ago, are dreaming of ways to sustain their positions along with their friends on Wall Street. As I walked along 47^th Street barely able to carry on a conversation over the din of the jackhammers it occurred to me how those spin doctors up in their ivory towers make us forget how government employees like the guy wearing the orange and yellow vest breaking up the street are every bit as important to us as the banker or broker weaving ways to turn simple cash into complex derivatives. At the same time I had to wonder if the guys with the calluses might be able to get us some basic simple interest while the soft skinned guys attempted to hold onto the jackhammer for just an hour.

Of course most of my readers realize my what ifs are purely fantasy, just like the what if BP knew what it was doing and had tested methods to remediate a deep water well explosion. In lieu of such a what if one might contemplate what if instead of spending millions of dollars for the Madison Avenue boys and girls to assure us BP is doing everything it can to contain the spill they actually spent that money on such an effort. Or, what if everyone in the country buys a Nissan Leaf, Ford Transit Connect, Chevy Volt or California’s own Tesla.

As emotions regarding the bloody Israeli-Palestinian clash aboard a flotilla that confronted a blockade continue to escalate, and who shot who with what and why is shown on poorly lit incoherent video all over the internet, it is wise to take a deep breath and wait for Netanyahu to “get all the facts” Obama asked for on Monday. Hopefully, calm minds will prevail and an assessment of actions and reactions can be made accurately without all the preconceived rhetoric in the near future.

Finally, while I was excited to see the Lakers jump off to a first game victory over the Celtics in the NBA Finals, it was tempered by the news of basketball legend John Wooden's death Friday. Coach Wooden led UCLA to seven straight and a total of 10 national championships. Arguably the greatest coach of all time, he was 99 years old.

From Where I Stand: Step 104

NO IMAGES WHILE
I'M BLOGGING
IN NEW YORK CITY

First, I want to acknowledge I am writing this blog on my iMac, and after years of frustration working on different brands of personal computers it was good to return last year to the user friendly company that passed Microsoft this week as the top technology company by stock market value. It seems like only a few years since my friends warmed me I should stop playing on my Apple and get a real computer. Many said that Apple with its proprietary system and expensive price points would collapse and die. While Steve Jobs and the national economy may face ill health the company he founded definitely does not.

Questions unfolded this week regarding the timeliness of the government response to the oil spill in the Gulf of Mexico. While there has been a lot of finger pointing about how responsible BP is and what responsibility needs to be leveled upon Haliburton and other interests in the drilling operation, the latest is to find fault with those who regulated the process. Some have even gone so far as to draw parallels between how Washington bureaucrats handled this disaster and the way the Bush bureaucrats handled Katrina. Although there seems to be better personnel involved in the Obama team, I'll await further investigation to assess the qualityh of their response.

As I am writing this without the help of my volleyball friends, since I am attending my daughter's graduation from law school while they're batting the ball around on the other end of the continent, I lack confidence in assessing how well the mud is doing in capping the well. I am pretty certain however there will be lots of late night jokes about muddying the water.

It is surprising to me how long it has taken the federal government to respond to the Arizona law governing procedures for questioning individuals about their citizenship. Apparently, when a law claims to help reduce or eliminate illegal immigration there needs to be evidence it violates civil rights or hampers law enforcement before the federal government will take action. Fortunately, the director of the Police Executive Research Forum, Chuck Wexler was able to get a number of police chiefs to explain to Attorney General Eric Holder how the law would inhibit law enforcement.

Finally, after months of anticipation Simon Cowell stepped down as a judge on the show he originated, American Idol. He'll continue to produce the show and the recording artists it generates. Oh yes, Lee DeWyze edged out Crystal Bowersox as the winner of the ninth season. I predict they will both have glorious careers.

And last but not least as noted earlier and in yesterday's blog the most important news is Heather is graduating law school. Here to I predict a glorious career.

From Where I Stand: Step 90

Many of the important events of the past week are continuing stories from weeks gone by. Two of these stories I referred to during the past week were the unemployment rate, which came up in my reflection yesterday, and the British election, which was noted briefly in my commentary outlining where I stand regarding their lack of leadership in the economic calamity in Greece and the European Union.

So, let’s start with the most fascinating of circumstances the greater than expected addition of 290,000 new jobs in April while the unemployment rate continued to rise to 9.9% nationally. Actually, this perceived contradiction has been explained before when it initially became apparent that those who had stopped looking for work and were therefore not counted as unemployed returned when the chances of finding employment looked better. People, such as myself, will continue to frustrate statistical analysis as we redefine our means of contribution and earnings during our transition in this economy.

Taking a close look at the British election one has to wonder if we can take away some lessons from the democracy from which we sprang. Our country took nearly a hundred years to arrive at the two party system. Attempts by a third party to impact government, other than spoiling the election for one of the two parties, have not worked to this point. In England, however, the third party, became power brokers when neither of the leading parties had enough seats in parliament. Nick Clegg of the Liberal Democrats formed a coalition government, the first in 65 years, with David Cameron of the Conservative Party, forcing Labour out of power for the first time in 13 years. I’m not advocating a third party but the idea of a coalition among lawmakers is appealing.

Looking at the mess in the Gulf of Mexico there does not seem to be a particular partisan point of view and one could hope, against odds of course, a consensus about how to avoid such problems in the future can be reached. Taking policy statements from both sides of the aisle, NRDC president Frances Beinecke proposes some ways each of us can help find solutions in her book, Clean Energy Common Sense: An American Call to Action on Global Climate Change.

In another attempt to show his level of pragmatism over idealism President Obama nominated Elena Kagan to replace the more liberal John Paul Stevens on the Supreme Court. Her ability to raise both the margin of feminism and Judaism to a third of the highest court is unlikely to increase the number of conservatives voting for her confirmation, but her consensus building style may move senators to put the party line aside to act in the best interest of the country.

Of course after the regular season the consensus among basketball sports writers was Cleveland would continue their domination to the NBA Championship. With Boston eliminating LeBron and company in just six games, the question arises whether they are good enough to topple the reigning eastern conference champion Orlando Magic, which is undefeated in the playoffs so far. In the west the Lakers hold the upper hand in my opinion largely due to someone who remains on the sideline. No, I’m not referring to Jack Nicholson. With more NBA championships than any other coach or player in history and a firm grasp of how to influence all forces, players, refs, and reporters, the Zen Master will do everything in his power to return to the finals again.

From Where I Stand: Step 83

Let me first wish every mother in the world a warm and wonderful Happy Mother’s Day. Without mothers there would be no children of the world to mess up everything their mothers worked so hard to achieve.

A perfect example of this is the current situation in Greece and Europe, the birthplace of western civilization. Looking back upon history we find the mothers of ancient Greece gave their children the concept of equality among rights and responsibilities, a set of principles known as democracy.

Further, these same mothers bestowed upon their children the thirst for knowledge, the desire to place thought into coherent patterns, and to propose theories regarding the meaning of life, a set of ideas known as philosophy.

Not wanting their children to rely upon only their mental assets these same mothers encouraged them to participate in activities to develop physical strength, endurance and flexibility, and to compete with each other in games near Mount Olympus.

In discussing these accomplishments of ancient Greek mothers while eating our Mother’s Day brunch at a non-Greek owned restaurant my brother reminded me they also gave us wrestling in the nude. Actually all the athletes of the first Olympic games were naked. Rather than some fear of a Janet Jackson type wardrobe malfunction the early sponsors of the games realized clothing limited the performance of the athlete.

Unfortunately, the children of Modern Greek mothers failed to apply this same understanding of performance to the twenty first century economic practice of borrowing enough money from a bank to build a business and reimbursing the bank in an expeditious manner.

To make matters worse Greece joined fifteen other countries with the same currency to form an organization known as the European Union. Their mothers warned them to make this idea of a common currency work they would need to set up some stringent rules regarding loans, pay back schedules, and strong investments. Following their mothers’ advice they wrote out a plan for limiting borrowing to a small percentage of the total economy.

Since each of the countries had their own finance minister there was no way to regulate the policy and overindulgent children of astute mothers of Greece found ways to borrow incessantly until the country found itself on the doorstep of financial collapse. In an effort to save their currency countries in the EU with fiscal resources were forced to step in and help this birthplace of democracy.

Still, a psychological and linguistic nightmare arose this week from the turmoil of this financial and economic crisis. While not a classically trained linguist as a student of the English language I still remember my teachers telling us ain’t ain’t a word. When pressed for a reason not to use such a common term they told us it was slang or figurative language. Amazingly, the British, parents of our language who are unable to choose a head of government, but that’s a story for another time, and their EU partners fear the spread of a Greek contagion. As a figure of speech a contagion is the spread of a harmful idea or practice, but as a psychological phenomenon it is not the spread of the practice but rather the result, financial collapse, that worries EU members.

Across the pond in the U.S. some worry we may have borrowed too much and could be infected by the contagion. Chances are we ain’t got nothin’ to worry about if we listen to our mothers and pay back our loans we can wash our hands of this contagion.

From Where I Stand: Step 76

With the responsibility of watching my seven-year-old niece comes the inability to play volleyball this morning. So, while she digests another episode of ICarly on Nick I will attempt to update my readers on the latest status of current events from where I stand. Of course, living in southern California one could sense the communal sigh of relief as the Lakers pulled it together Friday night to quash the upstart Thunder in Oklahoma and move on to the second round. Speaking of Oklahoma what is with a state that decides to protect doctors who fail to disclose fetal abnormalities to pregnant women. Apparently after Arizona pushed through their antagonistic law designed to incite hostility among law enforcement and those of foreign descent, other states such as Oklahoma feel compelled to act in an unfair and out of balance way knowing Fox-news will help get the story right, emphasis on the right. Meanwhile, protesters took to the streets in a May Day celebration of anger over the new immigration law in Arizona and calling for the federal government to take immediate action to bring about immigration reform. Elsewhere these protests are seen as an effort by the well-connected to draw attention away from the battle among senators, members of the Securities and Exchange Commission and New York state authorities over who will be the first to prosecute and convict Goldman Sachs and its executives of not only fraud, but stupidity in the way they brag about their deceptive practices in their emails. Feeling left out after the Southwest stirred up immigration, the boys in OK land thumbed their noses at women, and the Northeast derived a way to undo derivatives, the Southeast climbed on board by having an oil well bust up and blaming London-based BP Industries for the slick that threatens their coast in the Gulf of Mexico. Coming close on the heels of the disaster in West Virginia where twenty-nine miners lost their lives deep below the surface of the earth attempting to provide one of the substances we use to fuel our lives, the explosion, death of oil rig workers and ensuing rupture of another substance we use to fuel our lives, serves as a reminder how important energy reform ought to be. As the layer of black gold draws ever nearer the shoreline with even the greatest doubters of climate change aware of the devastation and ruin this catastrophe will have upon not only the environment but the economy, my mind is clear on why an oil man like George W. Bush supported drilling in the Arctic but completely baffled when a supposed liberal like Barack H. Obama supports offshore drilling. Change does take strength and commitment, and there must be well thought out systematic methods of transition developed, but true reform, especially moving away from oil, which has been the center piece of global conflict, and coal whose dust has filled our air with carcinogens and other harmful substances and sent too many West Virginians to an early grave, requires sacrifice. At a time like this it would be refreshing to hear the president step forward and explain how each of us must take every step we can to reign in our consumption of petroleum and coal based products. In other words, it is time to call for a national effort to walk, bicycle, carpool, utilize public transportation, limit driving, replace incandescent lights, and whatever else an individual can do to change energy consumption and preserve the planet for our children.

From Where I Stand: Step 69

Before we sat down to have our first bagel after volleyball this morning Dan said he believed Arizona with its new law designed to crack down on illegal immigration would become the target of late night comedians on television. Unfortunately, neither Sam, who was born in Mexico nor Manuel who was born in Spain played volleyball this week and were not available to comment on the controversial law implemented by our neighboring state. Mitch, the resident attorney, said the law would not change a thing because there was no provision to slow or deter immigrants without proper documentation from coming to the U.S. He said even if the law required local law enforcement to take action and turn violators over to federal authorities that as soon as they were deported they would just turn around and come back to find work. Then I raised the question of whether anyone believed Governor Jan Brewer who after signing SB 1070 into law said it was done for safety reasons and would be enforced without racial profiling. The tallest of the Mikes smiled and nodded leading me to believe he may have questioned the feasibility of such a plan. Dan said they could probably start by questioning anyone who appears to not belong, especially if they have a mustache. Everyone looked at Art who immediately said he had his driver’s license with him, but when asked if he had his green card said he was born in the U.S. and had no such paper. That may be all right here Art, but when traveling to Arizona wearing a mustache one would be wise to have whatever documents local authorities say are needed. Questions arose as to whether any effort by local law enforcement to apprehend illegal immigrants entering either the Angels or Dodgers baseball stadiums had ever been undertaken. Dan said he thought the teams were more interested in another form of green than whether or not any of their fans was carrying their green card with them to the game. Although continuing on his theme that the new law provided fodder for comedy, he said he could imagine a local police officer circling the Diamondbacks stadium in Phoenix during the seventh inning stretch questioning anyone with a mustache. Now, I have not had the opportunity to question my daughter who is attending the University of Arizona in Tucson to see what she and her friends think of the law, but my guess is she may have some thoughts about how it will affect customer relations at Target where she works part time. Two things struck me in the news about this over the past couple days since Brewer signed the bill that becomes law in 90 days. First, the governor’s predecessor, Janet Napolitano, Secretary of Homeland Security, stated she had vetoed similar legislation because law enforcement officials told her it “diverted critical law enforcement resources from the most serious threats to public safety and undermined the trust between local jurisdictions and the communities they serve.” Second, in a letter to the editor of the Los Angeles Times, Jose Figueroa, whose “mother’s family goes back to Texas before the invasion” wants to know “just what kind of papers are people like me supposed to carry?” He claims when he leaves his home in Los Angeles to visit his family in Texas he will be sure to get gas at the border and not stop at his favorite restaurants in Phoenix and Tucson, and “go through the state and not leave a cent.” Your indignation appears appropriate given the circumstances Mr. Figueroa, and may I also recommend that you shave before you leave if you happen to have a mustache.

From Where I Stand: Step 62

What an array of topics made news this past week. Headlines included another devastating earthquake in China, immigration reform legislation, a presidential move to grant same-sex partners hospital visitation rights, Tea Party protests on tax day, and unemployment hitting 12.6% in California. While all are important, none of them spoke to me the way the story about the SEC filing a fraud suit against Goldman Sachs did. Now, in fairness to those unlike me who have a strong background in either finances or economics, let me disclose that my last economics class was in high school and my own finances are run through Schools First Federal Credit Union and Union Bank, two institutions I hold in high regard. Although I knew of Goldman Sachs as a firm with an incredible history on Wall Street, their name was not one associated with an average citizen until their former head, Henry Paulson, was making bigger headlines than the two men facing off in the 2008 presidential election. In his role as Secretary of the Treasury he advised President Bush to bailout banks including Goldman Sachs, but not their rivals, Lehman Brothers. This is where we, average citizens, come in, because he used our hard earned dollars to help these poor bankers. Goldman Sachs paid back the billions they borrowed plus 23% interest in just a year. Sounds great, except if these allegations prove true, we start to get a picture of how this conservative institution was able to rebound from devastation to record setting profitability in such a short time. For the simplest explanation I turn to Michael Hiltzik, a business columnist in the Los Angeles Times. “But the ABACUS deal wasn’t a mortgage or a bucket of mortgages. It wasn’t a mortgage-backed security or a portfolio of mortgage-backed securities It wasn’t a collateralized debt obligation, which is a security backed by securities backed by mortgages. It was a ‘synthetic’ version of the latter, which is to say an investment that tracked the performance of certain collateralized debt obligations without actually requiring ownership of them.” In other words it’s a virtual world setup by Goldman Sachs with the help of a hedge fund operator named John Paulson, no relation to Henry, who had a reputation for predicting the collapse of the housing market. They failed to disclose his role in setting up this “synthetic” to the investors who purchased it and lost a billion dollars in a year while Paulson scooped up a billion dollars selling short. Goldman Sachs received 15 million in fees. Amazingly, it is Goldman Sachs and one of their vice presidents, Fabrice Tourre, who initiated ABACUS that are named in the suit, since they allegedly perpetrated the fraud on their investors. One might speculate there was some form of collusion and the suit should have named those who profited from this fraud, but it is important to recognize what a monumental step this was for the SEC, many of whom worked on Wall Street before becoming government agents. Prior to this action, the SEC was reluctant to point a finger let alone bring suit against their former cohorts. Again, I am not a financial wizard, but it doesn’t take a genius to recognize that a bunch of overzealous homebuyers did not cause all this economic turmoil by themselves. In the end I hope some kind of light can be shed on these deceptive practices and it won’t be necessary for me to wear 3-D glasses to figure out what I am seeing.

From Where I Stand: Step 55

Among the many dramas continuing to unfold this past week but not discussed around the table with bagels and juice was what did the pope, who was then Cardinal Ratzinger, know and when did he know it. The case involving an Oakland, California priest known to have molested two juveniles brings into question what actions or inaction did the then cardinal take and when did he or did he not take it. Kind of reminds me of questions surrounding Nancy Pelosi and what she knew and when after the CIA revealed she had been briefed on water boarding. I’m surprised such an issue didn’t arise during the health care debate. As if things were not difficult enough Pope Benedict learned late this week that the president of his predecessor, John Paul XII’s native Poland was killed in a plane crash. What we did discuss after volleyball this morning at the table over bagels and juice was a more local issue. Having received an oversized glossy card in the mail this week regarding an upcoming election here in the golden state I inquired as to who else had been privileged to get this important document. When the puzzled looks on their faces made it clear that wives had disposed without sharing the item I spoke of, Sam asked what it concerned. As soon as I said it was about a proposition Sam wanted to know if it had anything to do with electricity. Affirming his suspicion Sam said it was just PG&E, better known as Pacific Gas and Electric, attempting to control the market. No one seemed to think the proposition had merit, and Sam said he did not like the whole idea of propositions. For those of you unfamiliar with the process, a proposition is a way for citizens to make laws without the participation of the legislature. In theory, any person can propose an idea, gather enough signatures on a petition, and place the item before the voters. What usually happens is a special interest group finds the elected officials do not share its agenda and a proposition is used to circumvent the legislative process spelled out in national and state constitutions. Sam related how this impacted him recently when he went to a local mall and was approached by a person wanting him to sign a petition to lower his auto insurance rate. He asked the person how much compensation she received, and was told it was two dollars per signature. Wanting to know more Sam asked how she was doing. She told him she needed to gather about 200 signatures a day to pay for her travel and hotel expenses. I said it appears difficult for many people to trust the people they elect to make good decisions. I said I don’t decide someone I voted for is doing a bad job just because they don’t vote the way I want them to on every issue, but apparently some people do. Sam said we could just wait and see what Jerry Brown is going to do. Once again, for those outside of California, Jerry Brown was governor of California 35 years ago, and he’s running for that position again. Dan said the problem is we have one person who’s spent his life in government, referring to Brown, running against someone who has no idea how government works, referring to Meg Whitman, former E-Bay CEO, who has spent millions of her own money in a primary against the state insurance commissioner, Steve Poizner. I had to admit I admire her tenacity and enthusiasm. Your comments are appreciated.

From Where I Stand: Step 48

First, let me start by wishing my Christian audience a Happy Easter and my Jewish audience a Happy Passover. For those of you in neither category let me just wish you happiness. After volleyball today since bagels qualify as a bread product we were treated to what is referred to as matzah brie. When Manuel asked what it was I explained that it was what a lot of us call fried matzah. To which Manuel said he knew what fried matzah was but this dish looked different. Sam said it was just shaped into a nice omelet form. Mike said it resembled a kugel. I noted that my grandmother used to use the Yiddish word gfrishta to describe the dish, which I believe means fried matzah. Ham never inspired such confusion or controversy, probably another reason it is not kosher. Beyond epicurean delights the news this week contained an unanticipated change. Instead of the continuing loss of jobs our country has faced for the past two years the month of March actually had an increase of 162,000 jobs. According to the Los Angeles Times this marks a “3-year high” in job growth. Some, like myself, feel this must be taken in the larger context of an economy that has lost some 8 million jobs during the tumultuous recession. While I remain cautiously optimistic and continue to look for the silver lining inside each and every cloud I am not ready to say, “We are beginning to turn the corner,” as the president said yesterday. Certainly, it is good to hear people are finding employment even if it is temporary, such as census workers. Another way people are finding employment is by freelancing. From graphic designers and chefs to architects and human resource specialists opportunities to work as an independent contractor for a limited period of time is a growing trend. As is implied in the term freelance the freedom to select the projects the worker wants to become involved in and construct a schedule that balances other areas of personal life remains attractive to numerous individuals. On the other hand many see this as a way for employers to shed responsibility to loyal workers and hire people without providing them benefits such as health insurance or a retirement plan. Coming from a pragmatic point of view, at least I think that’s where I am at, individuals need to decide whether they need the paternalistic security of union bargained or employer granted benefits. While savings may be gained from the group approach, an individual with specific skills related to a given task may be able to gain compensation in excess of previous levels of salary and benefits combined. Only time will tell what freelance or independent contract workers will earn as a segment of the entire workforce in the future. Someone who hasn’t had trouble increasing her compensation package is Angela Braly, the chief executive officer of Wellpoint. Her total earnings rose from $8.7 million to $13.1 million at the same time Anthem Blue Cross, a subsidiary of Wellpoint, announced its intention to raise rates on policy holders by as much as 39%, supposedly because of an increase in medical costs. Even Kobe Bryant who once again is leading the Lakers into the playoffs signed a contract extension which will earn him only $2 million more each year. Makes you wonder what the earning power of one of the Butler Bulldogs or Duke Blue Devils playing in tomorrow night’s championship game might be. If they don’t make it into the NBA they might consider becoming a health insurance executive. Comments welcome.

From Where I Stand: Step 41

Nobody brought bagels this morning. We won’t point fingers because we have never set up a regular schedule so everyone knows when it is his turn to bring bagels, cream cheese, or juice. So, instead of sitting down at a table we just gathered together for a few minutes after the last game of volleyball. Carmen, the only female among us, raised the obvious question, what does everyone think of the healthcare law? Not wanting to be the first to volunteer an answer I met her question with the usual question one poses in such a situation, do you have insurance? She responded that she did, but she was worried the new law would impact her rates in a negative way. Sam pointed out the new law took away tax breaks to companies who provide insurance to their employees between the time they retire and Medicare takes effect. He said without the tax incentive companies would opt to drop these payments and the retiree would be forced to purchase what is called a Cobra plan. Art indicated that Cobra plans are already subsidized to some level by state governments. Mike said a major concern for the states would be the rising cost of Medicaid. Mitch said being able to carry a child on a family policy until age 26 will allow young adults to make their way into the working world before having to assume this responsibility. Mike pointed out that the young and healthy really had no use for insurance and were being forced to buy it for the first time. For the sake of argument I pointed out that there is a crisis when individuals without insurance show up at emergency rooms and the cost gets passed on to all of the policyholders. If the young and healthy choose not to purchase insurance then the rest carry the burden. We never brought it up, but I wonder what it means to the healthcare system when these same young, healthy, and uninsured do show up at an emergency room due to an accident or unexpected illness. Looking back on my personal history when I went to work straight out of college my employer paid for my health insurance as a benefit. This was done in lieu of additional salary and was considered desirable because it was paid for with pre-tax dollars. I’m sure this is not too different from the situation many twenty-somethings faced over the past fifty years and will continue to face during the next fifty years. My oldest daughter feels fortunate to receive health insurance through her employer that covers her self-employed husband. As for the greatest benefit the new law offers in my estimation was that my second daughter who has diabetes, and has to give herself injections every day of her life won’t have to worry in two and half years when she turns 26 whether or not she will be able to purchase her own health insurance. Other news of interest appears to be the growing concern among Catholics regarding what role, if any, the Pope played when as a cardinal he was allegedly involved in a sexual assault case that has garnered recent attention. Finally, it would not be March without mentioning the NCAA Division I men’s basketball tournament. At this writing West Virginia and Butler have made it to the final four. Tennessee is battling Michigan State for their chance to go, and Duke, the last number one seed remaining, will face Baylor in two hours for the last seat at the concluding week of March Madness that takes place next weekend in April. One last thing, there will be no bagels next week due to the unleavened rule: no bread products, only matzo during Passover. Comments welcome.

From Where I Stand: Step 34

As I sit down to write on this the first full day of spring members of the House of Representatives have voted for the Senate health care bill and reconciliation. In the other room the television is tuned to C-Span that covered the debate and vote. Earlier today the last of the Democrats to oppose the legislation due to the issue of government funding of abortion received the assurance he required that the federal government would not fund abortion. Bart Stupak, a representative from the upper peninsula of Michigan, said his objections were satisfied and he would support the bill. According to those in the media given the task of counting votes before they actually occur, this put the vote past the 216 needed to pass the bill. The most disturbing part is that not one Republican voted in the affirmative. In listening to the debate it was clear not one Republican would vote for this bill. Each of them in turn conceded the need for health care reform, but insisted the current bill should be scrapped in order to start over. They pointed out that there was bipartisan opposition to the bill. Apparently Democrats are willing to cross over despite the pressure imposed by the President and the Speaker of the House. At the same time tireless adherence to ideology prevents Republicans from working with their counterparts on the other side of the aisle. In fact, some like Devin Nunes of Visalia, California decried the legislation as a Democratic attempt to bring back the failed state run Communism of the Soviet era. In opening the debate, Steny Hoyer, the majority whip, pointed out that Presidents Bush, Ford and Nixon all called for health care reform. Yet, despite having majorities in Congress during a couple of those administrations Republicans failed to ever bring a bill to the floor of either house of Congress. John Boehner, the minority whip, claimed those supporting the bill today were acting out of arrogance and not in response to the will of the people. It is incredible to me to think that Mr. Boehner, who often takes a condescending tone, can assert that he knows the will of the people better than those elected to represent those people. According to every poll that I have had an opportunity to read Americans overwhelmingly want to see spiraling health care costs brought under control. They disagree on how this should be done. However, most agree Republicans have voted consistently to maintain the status quo. Whether or not it was the will of the people they appeared more interested in thwarting the efforts of the Clintons, Obama and Pelosi than in curtailing insurance companies discriminatory policies and extraordinary profits. Some of them have gone so far as to call the current plan Obamacare despite the two hundred amendments Speaker Pelosi credited Republican representatives with inserting into the bill. Although it is unclear to me how the legislation will allow 32 million more Americans to have health insurance, what is clear is this will relieve the burden we as taxpayers face whenever an uninsured person shows up at an emergency room. As a parent with a child with diabetes it has been disconcerting that as she takes her place in the world she may be denied health coverage because of her pre-existing condition. Finally, while only time will tell if this legislation will be cost effective, enable access to affordable health care, curb unfair insurance practices, improve preventive care, and build a healthier society, from where I stand it is a courageous step beyond where we were on the last day of winter.

From Where I Stand: Step 27

Once again my report begins with a subject raised around the bagel table after eight volleyball games. Healthcare was going to be my focus, but it will have to wait for later. Maybe it was the fact that he brought the bagels this week, and discovered that’s why we really get up early on a Sunday and risk bodily injury. Before the games began, Manuel, our good friend from Spain, noted he actually received a call for the first time on Saturday reminding him that it was his turn to bring the bagels. So, once again he posed an excellent question to spark dialogue. He wanted to know why white males were at the bottom rung of the ladder. Several of us asked for clarification. Manuel said when his company wanted to hire new employees members of minority groups were selected first. Sam said this requirement usually only applied to companies doing business with the federal government. In response Manuel wanted to know why colleges and universities gave preferential treatment to minorities. Again, it was related back to receiving federal funds. We discussed how California had passed a proposition initiated by Ward Connerly, a conservative African American activist who opposed the idea of using affirmative action to lower standards, which eliminated preferential treatment for scholarships. Mike added his knowledge of Michigan schools was they eliminated affirmative action but still reserved the right to find ways to build diversity in their schools. To which I added that I thought it was incumbent upon these institutions of higher learning to maintain high standards while building diversity by expanding their search both in where they look for students and how early they start to target potential students. Sam said such a program already exists at USC, for non-Californians-non-NCAA-sports-freaks that’s the University of Southern California. Manuel told us when he applied for admission to a junior college he was told he was not white, as he had indicated, but Hispanic. He claimed he thought Hispanic was an ethnicity not a race. In fact, he said he looked it up in the dictionary and found it meant individuals who speak Spanish. It didn’t help matters he said when the admissions official asked where in Mexico could one find Spain. Making the assumption such an official was at least a high school graduate, and as a former teacher who is astutely aware of Jay Leno’s talks with people on the street, I apologized for that official’s deficient education. I also noted an individual has a right to decline to state race or can choose other. Being the over-exuberant person I am I also indicated the whole concept of race is bullshit. For example, I pointed out I told people I was of European descent “as far as I know.” Certainly, with all the African tribes invading Europe and European tribes invading Africa, and other parts of the world, my, and for that matter everyone else’s, genetic makeup is in question. A great American once said he looked forward to the day when people would be judged not by the color of their skin but by the content of their character. Now, in other developments it appears Oscar season has come to a close with Bigelow edging out Cameron. Big Ben finds himself in off-season trouble while spring training is in full swing. Kara DioGuardi did not ask Simon’s permission to put her Hollywood Hills home up for sale. And yes, budget reconciliation appears to be the new buzzword as healthcare and education take precedent over high profile out of country excursions. Stay tuned as this one comes down to the wire. Finally, did I mention that as we were walking out to our cars after bagels, Manuel confided to me that his father’s portion of his hyphenated surname is actually Portuguese?

From Where I Stand: Step 20

Sitting down to bagels and juice after seven games of volleyball, my teammate, Manuel, a native of Spain, asked why people in our country have difficulty discussing politics. Dan, still smarting from his team’s loss to us in the final game but ever the diplomat, said it was due to the great polarization that has overtaken today’s political environment. Our fellow teammate, Mike, indicated a lot of the problem arose over the role of government. For example, Mike pointed out that the government now owns General Motors. Realizing GM is still traded on the open market I asked what he meant. He said the government should have let them fail. A mute point since they did lend the former giant some hefty cash, but one with which I tend to agree, especially in lieu of what their long time competitor, Ford, was able to do. Then, I asked Mike what problem he had with the government’s current role with the automaker. From his vantage point the dealerships that were slated to close were able to pressure their representatives in congress and persuade them to let 660 of the 1,000 remain in business. Here’s where the other Mike, the one who played on Dan’s side this week, had a question. He asked our Mike if it wasn’t true that each of those dealerships was a privately held franchise. Receiving a concession to his observation their Mike, who happens to work in the auto finance world, made the assertion that even though the company was having trouble the individual franchise may still be profitable and deserve the chance to stay open. At this point I turned to Manuel and indicated he had done an admirable job of spurring a civil discussion around which differing views were held. Foolishly, however, I turned back to our Mike, who I respect as a level headed thoughtful and intelligent individual, and posed the question most investors want to know when assessing the merits of a financial decision: Has the playing field changed since the near collapse of GM and its current status. Just so we’re clear, any of you who have followed this blog for the past couple weeks, or read, listened or seen the news during this same time, realize a major player in the automotive world, Toyota, has been experiencing some problems. Our Mike attributed these problems to government meddling. For clarification, and since it has been brought up elsewhere, he did not think that the rise of Toyota and the fall of GM was in any way due to our government allowing the complaints about Toyota engineering over the past three years to go unheralded. He does however think the attacks congress has made on Toyota the past couple weeks prop up the company they own, which is GM. It would be nice if the representatives in congress could sit down with bagels and juice and discuss civilly the merits of the legislation in front of them, and actually get something done. When I got home the front page of this morning’s paper told how while state employees are losing money with furlough days they more than compensate with overtime. An example was given of a prison nurse who lost $10,000 last year to reduce her salary to $92,000, but received enough overtime to make her total earnings $270,000, almost $50,000 more than the head of the prison system. The article went on to tell of 50 state employees who received over a $100,000 in overtime last year. My wife, who due to cuts in the California budget, was given furlough days says she has not earned any overtime. In fact, as far as we know, teachers, and many like my wife put in hundreds of hours of overtime correcting papers, recording grades, and preparing lessons, have not received any additional compensation. Maybe, we’ll discuss this imbalance after volleyball next week. There is that election in Iraq today, and, oh yeah, the Academy Awards. As usual, your comments and responses are greatly appreciated.

From Where I Stand: Step Thirteen

Yesterday Chile suffered a massive earthquake. While the magnitude 8.8 puts it at roughly 500 times more powerful than the 7.3 earthquake that struck Haiti just last month, the devastation according to most sources will be considerably less. My understanding is the strong economy and solid governmental institutions provide Chile with both a better infrastructure to tolerate the seismic activity and respond quickly and adequately to the destruction. As a Californian these episodes have me wondering how soon our turn is coming. Meanwhile, half a world away the coalition forces have driven the Taliban from Marjah in Helmond province in the south of Afghanistan. One question on my mind like it probably is on yours is whether the Afghan forces will be able to maintain control of the town once the coalition forces leave. Strong political and diplomatic support will be needed to help the young Afghan forces avoid being overtaken or corrupted by the nefarious efforts of the Taliban to reassert the poppy trade. Not too far away across the Mediterranean the European Union appears to be putting together a plan to help bail out Greece. Hopefully, they can learn from the failure and successes of bailouts over the past couple years in the U.S. and elsewhere. Amazingly, in Washington something occurred this week, which hadn’t happened in quite some time. A vote on a jobs bill received bipartisan support. That means some members of Congress decided not to vote along party lines, but actually join together with members of the opposite party to get something done for the American people. Scott Brown, the newly elected senator from Massachusetts, surprised me, and I gather many Americans, when he voted for this jobs bill. This takes guts. He conceded the bill wasn’t everything he would have liked to have seen, but would serve to grow jobs and stimulate the economy. Today the president received a clean bill of health from his doctor, but was told to do better at resisting cigarettes. Similar results appear to be cropping up around the issue of health care legislation. At the end of December bills passed in both houses. When Mr. Brown was elected last month conventional wisdom said health care was dead on arrival. On Thursday, when the president held a summit on health care there seemed to be a lot of posturing by both parties with neither wanting to stipulate to the positive attributes of the differing ideas. Everyone knows doctors are practicing defensive medicine in a time when they should be on the offensive using whatever means possible to help patients prevent injury and disease from curtailing their lives. We know it’s wrong for companies to ask for 39% increases when they profited by $2.9 billion the previous quarter, and that’s in a down economy. To say the increase is due to healthy people dropping their insurance, and to fight against a bill that would require everyone to have insurance has me scratching my head. If these insurance companies are good at what they do competition from an inept government agency should not be a stumbling block. These ideas are not Republican and Democratic. They are American. Let’s bring back bipartisan legislation. Fix the system and let’s go watch some hockey. Who’s winning Canada or the U.S.? As usual, comments are appreciated.

From Where I Stand: Step Six

Sunday used to be the day the thick paper arrived at the door early in the morning. While I still get a Sunday newspaper it’s not anything close to thick, and most people I know rely on the Internet and TV for their news and current events. Given this traditional role of the day named for our star it seems natural to report on how things look to me on this day of the week. Afghanistan, a country known for rugged terrain, corrupt businessmen and politicians, and surviving numerous occupations and wars, is once again front and center in this week’s news. From various sources it appears NATO, which is largely US marines and British armed forces, along with Afghan military are trying to overtake a critical Taliban stronghold. The key objectives appear to cut off the opium trade with hopes of financially crippling the insurgents, and placing a western friendly Afghan military and government in a strategic area near the Pakistan border, where you know who (hint: OBL) is presumed to be hiding. Closer to home the president attempted to smooth things over in Vegas. Although the mayor accepted the contrition with grace blackjack dealers remain skeptical. On the other hand small business leaders welcome any and all tax breaks but aren’t sure whether it will enable them to hire more workers. At the same time, Republicans are going to show up to the president’s healthcare summit. Whether the Afghan, job growth, or healthcare battles will be successful remains to be seen. Stay tuned for future Sunday reports. Meanwhile, with flying tomatoes, smooth landing skaters and nimble curlers the US Olympic team has taken a commanding lead in medals after the first week. Tiger Woods offered profuse apologies to his wife, family, friend, business partners, fans, and most significantly the kids who looked to him to be a role model. Claiming his behavior was selfish, foolish, and wrong, he said his Buddhist faith taught him that the true mark of an individual is not his achievements but what he is able to overcome. Danica Patrick will have many obstacles to overcome to win on the manly NASCAR circuit, but she took the first step this week at Daytona and today in California. The academy awards are coming soon and it looks like it may be a battle between the big box office sensation Avatar and the popular indie film The Hurt Locker. If you have not seen Jeff Bridges performance in Crazy Heart you should treat yourself. Well, that’s how things look from where I stand. Please let me know what you think. Differing perspectives and comments are not only welcome, but also encouraged.