Financial Entitlement in the US


Robert Lenzner, Forbes —

Don’t blame David Sokol’s  craving to make a fortune  and become a philanthropist on Warren Buffett’s understandable confidence  that  his leading heir-apparent would do nothing to embarass him and Berkshire Hathaway.

It was  David Sokol’s personal responsibility to tell Buffett on January 25th latest  that he  owned 96,000 shares of Lubrizol worth $10 million that, excuse me , he had  purchased  the first week of January, 2011, ahem, just 18 days before the Jan. 25th  decision to go ahead and  negotiate for Lubrizol.

Then, Buffett would have realized he had to reveal this stock activity in the merger materials, which was going to be an embarassment– even if he had ordered  Sokol to sell the shares before ANY negotiations.

This  is not an issue of corporate governance, that mushy concept that obfuscates what you should be born with– an ingrained sense of what is right and what is wrong.  Unfortunately, our celebrity culture has placed a priority on public excess, the insatiable need to be richer than the next guy,  keep up with the private equity billionaires, the hip-hop entrepreneurs with diamonds in their ear lobes, the Donald Trumps of the world.

Read today about the Fannie Mae and Freddie Mac execs who were paid multiple  millions personally and presided over public  losses of billions. It’s  time to pull “The Rich And The Super Rich, A Study of  Money & Power And Who Really Owns America” out of the bookcase and  remind  myself of  the prevailing culture.

The Oscar-winning  documentary “Inside Job,” is deep-down a narrative of the insidious culture of financial entitlement, an invisible virus  at work  in the culture.  Cut the school budget, layoff policemen, cannibalize  training programs for the unemployed, don’t make GE pay any taxes etc. is  the dark side of the  culture of  financial entitlement.

Here  are some of the many examples of the virus at work in our recent history. The leading investment banker who  is also chairman of the investment bank’s regulator who buys shares of the investment bank at a  depressed price during the financial crisis  with full insight as to public  policy support for the  institution, and never has his wrist slapped.  Supported by his former  partner, who once held a high cabinet post, who assured me there  w as nothing wrong in taking advantage of inside knowledge to make an extra buck or two.

The  leading executive of a  public-private housing finance institution who brags to me that she got out just in time without being stained by the  crisis, her extraordinary small fortune  intact.

The phenomenon of a leading  bank, JP Morgan Chase allowing  $100 billion to be transferred back and forth between  the crook of the century, Bernie Madoff and another major client of the bank.  Or my alma mater, Goldman Sachs letting a  hedge fund  maven client pick out the lousy mortgages to go short  in a public offering.  Or Credit Suisse having to pay a fine of $535 million to  the government for violating the  sanctions against  doing business with knave nations  like Iran and the Sudan.

Just have a look at hedge fund biggie Raj Rajaratnam, blithley protesting  his innocence  of criminality  in the  biggest inside information trial ever, despite 19 guilty pleas  by others caught in his dishonest web.  Absurd.

July political developments, part 2


With the immigration debate being a big issue, protesters took action across Massachusetts.  Opponents of Arizona law S.B. 1070 marched at the National Governors Association meeting that was held in Boston.  The Boston City council backed off of its boycott of Arizona-based businesses after receiving heat.  A poll conducted by the Boston Herald revealed that many residents were frustrated by the boycott.

July also saw the burgeoning Tea Party movement split in half.  This division came to pass after several groups within the movement were associated with outspoken critics of the president and current policy. Mass.-based chapters seem determined to carry on despite the criticism the movement has received.

July also saw the expansion of unemployment benefits.  For Massachusetts, that meant that approximately 70, 000 residents gained financial help for a few more months. The bill passed by a vote of 272-152 in the House.  Senator Brown proposed an alternative funding source for the measure but his amendment was not passed.

On the casino gambling front, state legislators that supported the bill faced firm opposition.  The problem seemed to have begun over the House’s introduction of slot machines at all of the race tracks, or “racinos”, which both Patrick and the Senate refused.  The stalemate lasted until the last possible moment when the House and Senate agreed to slot machines at only two of the racetracks.  Though that version passed just before the end of the session, its fate is not yet determined because Patrick doesn’t support the current version.

Just as the legislature was wrapping up its current session, both the House and the Senate passed measures in favor of a national popular vote.  As a result, Massachusetts is now part of a “pact” with five other states to give all of their votes to the candidate that wins the national popular vote.  A major sticking point, according to opponents, is that it ignores the stated amendment process contained within the U.S. Constitution.

5th Congressional district candidate discusses immigration, part 2


It sounds like you believe that this is an issue for states to handle. Is that correct?

Yes.  Illegal immigration is an issue that should be left to the states because they are the ones being directly affected.  The federal government shouldn’t force the states to enact specific policies.  I support the deportation of illegal immigrants, which is something that I’ve said on my website.  However, I don’t believe that the states should be mandated to deport illegal immigrants.

What sort of provisions would you endorse if you are elected?

I would encourage Massachusetts to enforce the federal laws already in place.  I think that the local authorities should be allowed to report illegal immigrants if they choose.  That’s why we have the police—they’re here to enforce the law.  The states should work together to fix immigration since it’s an issue that affects them.

Shapiro is running against three other candidates for the Republican nomination.  To find out more about him, visit his website www.shapiro4congress.org.  The state primary is on Tuesday, September 14th and the general election is on Tuesday, November 2nd.

5th Congressional district discusses immigration, part 1


Robert Shapiro (R-Andover), who is a candidate in the race for the 5th Congressional District, is just as moved by the immigration debate as the rest of us.  The invalidation of key parts of S.B. 1070 has stoked passions on both sides of the immigration debate, and more people are making themselves heard.  In light of this latest development, Shapiro agreed to discuss the ruling yesterday.

A few days ago, U.S. District judge Susan Bolton struck down the most controversial provisions of the Arizona immigration law. What is your response to the ruling?

Arizona has a right to take to take action because illegal immigration endangers states.  People that come into this country illegally have access to our public services.  Public services were created for the benefit of legal citizens, not for illegal immigrants.  It’s not fair to everyone that is here legally to have to support people that are here illegally.

Do you agree with the judge’s decision to strike down parts of the law?

The Arizona law enforced federal regulations that were already in place.  Arizona was merely doing what was asked by the federal government.

What makes you say that states have a right to pass immigration legislation?

Like I said, illegal immigration harms states because illegal immigrants can use public services.  A state can’t support itself economically if the services its paying for are being used by people that don’t have legal access.  That’s why, if elected, I would support measures to close loopholes that currently allow illegal immigrants to use public services, many of which are supported by federal funds.  People shouldn’t be rewarded for breaking our laws.

To read the rest of Shapiro’s interview, read 5th Congressional district candidate, part 2.

MA makes itself heard over immigration dilemma


With the Department of Justice (DOJ) filing suit against Arizona, many Massachusetts residents are making their voices heard. Though the Bay state is miles from Arizona, what happens there has far-reaching consequences and inextricably connects both to the rest of the states. Steven Camarota, the Research Director of the Center for Immigration Studies (CIS), discussed this connection yesterday on C-Span.

Camarota described the situation as a conflict between enforcing current law or rewriting national legislation. He acknowledged that while it is important to refine our immigration policy, Camarota stated that doing so is the equivalent of, “…putting the cart before the horse” if we can’t first enforce our laws. Camarota mentioned that thirty-four states have passed some form of immigration policy or are boycotting Arizona like Boston. His concern over enforcement is shared by local residents.

Steve Kropper, co-chairman of the Massachusetts Citizens of Immigration Reform (MCIR), is an adamant supporter of the Arizona law. According to Kropper, the legislation is sound because it, “takes the handcuffs off police” by enabling them to better perform their jobs. Though some residents may agree with Kropper, not everyone does.

Yesterday the Pittsfield chapter of Manos Unidas, translated as Hands United, asked that the city council mirror the boycott initiated by the Boston City Council. On May 5th, the Boston City Council adopted a non-binding resolution which allowed them to stop working with Arizona or any Arizona based businesses.

That Massachusetts is a part of this controversy is a very compelling reason for residents to pay attention to what happens in other states. Think about everything this way. With Beantown leading a boycott, businesses like Cold Stone and P.F. Chang’s could lose revenue because they are based in Tempe and Scottsdale Arizona, respectively. If residents are as enamored with custom-made ice cream and Chinese food like this writer is, then we have even more motivation to get involved with this discussion.

For more information, visit my page at Examiner.com.

America’s perception of Arizona’s Immigration Law


Update: On July 7th, Steven Camarota of the Center for Immigration Studies (CIS) discussed national immigration policy on C-SPAN. In the process, he explicitly points out that illegal immigrants fill the lowest paying jobs in the country, which means that they don’t compete against most Americans for work.

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According to the New York Times, most Americans agree that Arizona’s law will result in racial profiling. What is particularly curious about the article is that there is no talk of sympathy on behalf of the people who were polled. That gives the appearance there was little concern about the effects that would be felt by other races, which probably does not bode well for America’s image.

In addition, respondents also seemed to believe that crime would drop as a result of this legislation. Apparently, respondents seem to believe that if immigrants are scared into not reporting crime (of which even legal immigrants are worried about), then crime levels will drop. Think of things this way: just because fewer crimes aren’t reported doesn’t mean that crimes are suddenly not being committed.

A common complaint that was mentioned was how illegal immigrants are a drain on America. Specifically, respondents voiced concern over how illegal immigrants use public services, like the emergency room, without paying for their usage. Factually, that complaint isn’t entirely correct as illegal immigrants pay into Social Security but never see any of their money again as they do not get social security benefits.

Where do you stand on Arizona’s immigration legislation? Do you think that it causes more harm than good, or should the Federal government mirror Arizona’s stance?

Massachusetts fining inmates? What?


Today the bay state’s House of Representatives pushed through, 106-51, a very interesting and curious piece of legislation .  If approved by the Senate, then inmates throughout the state can expect to be fined $5 every day that they are behind bars.

Though the funds generated are intended to help ease the state’s budget crisis, let’s play devil’s advocate by viewing this bill from the inmates’ POV.  Consider, if you will, the prospect of facing another 4 – 5 years in jail before your time is finished.  On top of having to deal with the social repercussions of having been imprisoned (which the Department of Justice points out increases the likelihood of recidivism), you now have to pay several thousand dollars (a little over $9,000 for a five year sentence) for having served time.  This new fee is also in addition to the fines that you have already paid or are in the process of paying, which were initially associated with the offense.   If this is what inmates with short sentences are facing, what about those who have much longer sentences, like life imprisonment?  Are you feeling scapegoated?

Keeping the DOJ’s official position in mind, do you think that this legislation should become law? Is this legislation possibly unfair? What is your opinion?