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CEOs From Hell!

Posted by terres on July 2, 2008

Overpaying CEOs
by Ralph Nader
July 1, 2008

The worst top management of giant corporations in American history is also by far the most hugely paid. That contradiction applies as well to the Boards of Directors of these global companies.

Consider these illustrations:

The bosses of General Motors (GM) have presided over the worst decline of GM shares in the last fifty years, the lowering of GM bonds to junk status, the largest money losses and layoffs of tens of thousands of workers. Yet these top executives are still in place and still receiving much more pay than their successful counterparts at Toyota.

GM’s stock valuation is under $7 billion dollars, while Toyota is valued at over $160 billion. Toyota, having passed GM in worldwide sales, is about to catch up with and pass GM in sales inside the United States itself!

GM’s executives stayed with their gas guzzling SUVs way beyond the warning signs. Their vehicles were uninspiring and technologically stagnant in various ways. They were completely unprepared for Toyota’s hybrid cars and for the upward spiral in gasoline prices. They’re cashing their lucrative monthly checks with the regular votes of confidence by their hand-picked Board of Directors.


Chevrolet pickup trucks and SUVs are seen at a dealership in Silver Spring, Maryland, July 1, 2008. REUTERS/Yuri Gripas. Image may be subject to copyright. See RTSF Fair Use Notice!

About the same appraisal can be made of Ford Motor Co., which at least brought in new management to try to do something about that once famous company’s sinking status.

Then there are the financial companies. Top management on Wall Street has been beyond incompetent. Wild risk taking camouflaged for years by multi-tiered, complex, abstract financial instruments (generally called collateralized debt obligations) kept the joy ride going and going until the massive financial hot air balloon started plummeting. Finally told to leave their high posts, the CEOs of Merrill-Lynch and Citigroup took away tens of millions of severance pay while Wall Street turned into Layoff Street.

The banks, investment banks and brokerage firms have tanked to levels not seen since the 1929-30 collapse of the stock market. Citigroup, once valued at over $50 per share is now under $17 a share.

Washington Mutual – the nation’s largest savings bank chain was over $40 a share in 2007. Its reckless speculative binge has driven it down under $5 a share. Yet its CEO Kerry Killinger remains in charge, with the continuing support of his rubberstamp Board of Directors. A recent $8 billion infusion of private capital gave a sweetheart deal to these new investors at the excessive expense of the shareholders.

Countrywide, the infamous giant mortgage lender (subprime mortgages) is about to be taken over by Bank of America. Its CEO is taking away a reduced but still very generous compensation deal.

Meanwhile, all these banks and brokerage houses’ investment analysts are busy downgrading each others’ stock prospects.

Over at the multi-trillion dollar companies Fannie Mae and Freddie Mac, the shareholders have lost about 75 percent of their stock value in one year. Farcically regulated by the Department of Housing and Urban Affairs, Fannie and Freddie were run into the ground by taking on very shaky mortgages under the command of CEOs and their top executives who paid themselves enormous sums.

These two institutions were set up many years ago to provide liquidity in the housing and loan markets and thereby expand home ownership especially among lower income families. Instead, they turned themselves into casinos, taking advantage of an implied U.S. government guarantee.

The Fannie and Freddie bosses created another guarantee. They hired top appointees from both Republican and Democratic Administrations (such as Deputy Attorney General Jamie Gorelick) and lathered them with tens of millions of dollars in executive compensation. In this way, they kept federal supervision at a minimum and held off efforts in Congress to toughen regulation. These executives are all gone now, enjoying their maharajan riches with impunity while pensions and mutual funds lose and lose and lose with no end in sight, short of a government-taxpayer bailout.

Over a year ago, leading financial analyst Henry Kaufman and very few others warned about “undisciplined” (read unregulated) and “mis-pricing” of lower quality assets. Mr. Kaufman wrote in the Wall Street Journal of August 15, 2007 that “If some institutions are really ‘too big to fail,’ then other means of discipline will have to be found.”

There are ways to prevent such crashes. In the nineteen thirties, President Franklin Delano Roosevelt chose stronger regulation, creating the Securities and Exchange Commission (SEC) and several bank regulatory agencies. He saved the badly listing capitalist ship.

Today, there is no real momentum in a frozen Washington, D.C. to bring regulation up to date. To the contrary, in 1999, Congress led by Senator McCain’s Advisor, former Senator Phil Gramm and the Clinton Administration led by Robert Rubin, Secretary of the Treasury, and soon to join Citibank, de-regulated and ended the wall between investment banks and commercial banking known as the Glass-Steagall Act.

Clinton and Congress opened the floodgates to rampant speculation without even requiring necessary and timely disclosures for the benefit of institutional and individual investors.

Now the entire U.S. economy is at risk. The domino theory is getting less theoretical daily. Without investors obtaining more legal authority as owners over their out of control company officers and Boards of Directors, and without strong regulation, corporate capitalism cannot be saved from its toxic combination of endless greed and maximum power—without responsibility.

Uncle Sam, the deeply deficit ridden bailout man, may have another taxpayers-to-the-rescue operation for Wall Street. But don’t count on stretching the American dollar much more without devastating consequences to and from global financial markets in full panic.

Consider the U.S. dollar like an elastic band. You can keep stretching this rubber band but suddenly it BREAKS. Our country needs action NOW from Washington, D.C.

END

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Stop the Oil Speculators

Posted by terres on May 28, 2008

by Ralph Nader
5/27/08

What factors are causing the zooming price of crude oil, gasoline and heating products? What is going to be done about it?

Don’t rely on the White House—with Bush and Cheney marinated in oil—or the Congress—which has hearings that grill oil executives who know that nothing is going to happen on Capitol Hill either.

Last week the price of crude oil reached about $130 a barrel after spiking to $140 briefly. The immediate cause? Guesses by oil man T. Boone Pickens and Goldman Sachs that the price could go to $150 and $200 a barrel respectivly in the near future. They were referring to what can be called the hoopla pricing party on the New York Mercantile Exchange. (NYMEX)

Meanwhile, consumers, workers and small businesses are suffering with the price of gasoline at $4 a gallon and diesel at $4.50 a gallon. Suffering but not protesting, except for a few demonstrations by independent truckers.

A consumer and small business revolt could be politically powerful. But what would they revolt to achieve? Their government is paralyzed and is unable to indicate any action if oil goes up to $200 or $400 a barrel. Washington, D.C. is leaving people defenseless and drawing no marker for when it will take action.

Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007. Now at $130 or so a barrel, it is clear that oil pricing is speculative activity, having very little to do with physical supply and demand. An essential product—petroleum—is set by speculators operating on rumor, greed, and fear of wild predictions.

Over the time since early 2007, U.S. demand for petroleum has fallen by 1 percent and world demand has risen by 1.3 percent. Supplies of crude are so plentiful, according to the Wall Street Journal, “traders of physical crude oil say their market is suffering from too much supply, not too little.”

Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because, in the words of Hossein Kazempour Ardebili, Iran’s oil governor, “there are simply no buyers because the market has more than enough oil.”

Mike Wittner, head of oil research at Societe Generale in London agrees. “There’s various signals out there saying for right now, the markets are well supplied with crude.”

Historically, oil has been afflicted with the control of monopolists. From the late nineteenth century days of John D. Rockefeller, and his Standard Oil monopoly, to the emergence of the “Seven Sisters” oligopoly, made up of Standard Oil, Shell, BP, Texaco, Mobil, Gulf and Socal, to the rise of OPEC representing the major producing countries, the “free market” price of oil has been a mirage. Despite the breakup of the Standard Oil company by the government’s trustbusters about 100 years ago, selling cartels and buying oligopolies kept reasserting themselves.

In an ironic twist, the major price determinant has moved from OPEC (having only 40% of the world production) and the oil companies to the speculators in the commodities markets. What goes on in the essentially unregulated New York Mercantile Exchange (NYMEX)—without Commodity Futures Trading Commission (CFTC) enforced margin requirements, and, unlike your personal purchases, untaxed—is now the place that leads to your skyrocketing gasoline bills. OPEC and the Big Oil companies reap the benefits and say that it’s not their doing, but that of the speculators. Gives new meaning to “passing the buck.”

Deborah Fineman, president of Mitchell Supreme Fuel Co. in Orange, New Jersey, summed up the scene: “Energy markets have been dictated for too long by hedge funds and speculators, who artificially manipulate the numbers for their own benefit. The current market isn’t based on the sound principles of supply and demand but it is being rigged by companies and speculators who are jacking up prices for their own greed.”

Harry C. Johnson, former banker who worked for many years inside Big Oil and ran his own small oil company in Oklahoma, blames the CFTC, the Department of Energy, the Administration, and Congress, as “asleep at the switch on an issue that is probably costing U.S. consumers $1 billion per day.”

He cites “some industry experts, who profit greatly from the high price of crude, and have stated openly that the worldwide economic price of crude, absent speculators, would be around $50 to $60 per barrel.

Imagine, our government is letting your price for gasoline and home heating oil be determined by a gambling casino on Wall Street called NYMEX. The people need regulatory protection from speculators and an excess profits tax on Big Oil.

In addition, a sane government would see the present price crises as an opportunity to expand our passenger and freight railroad capacity and technology.

A sane government would drop all subsidies and tax loopholes for Big Oil’s huge profits and other fossil fuels and promote a national mission to solarize our economy to achieve major savings from energy conservation technology, retrofitting buildings, and upgrading efficiency standards for motor vehicles, home appliances, industrial engines and electric generating plants.

Those are the permanent ways to achieve energy independence, reduce our trade deficit, create good jobs that can’t be exported and protect the environmental health of people and nature.

Those are the reforms and advances that a muscular consumer, worker and small business revolt can focus on in the coming weeks.

What say you, America?
[EoF]

Related links: Pinheads in the House: Fanning Oil Chaos

mnc

Posted in agriculture, bankruptcy, bribes, bush, BushCo, cabal, environment, politics | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 4 Comments »

Corporatocracy killing democracy!

Posted by terres on May 23, 2008

Corporatocracy turns its sights on last remaining pillars of democracy

by Malcolm Martin

http://www.opednews.com

The children are taught that the United States of America is a democracy. As the tale is told, at the founding of the nation, a government “of, by, and for the people” was established. […]

Then there is consolidation by vertical integration and its heavyweight champion is Wal-Mart, the world’s largest corporation. Wal-Mart has made a partner of the Chinese government. Working together, the partners have turned China into a vast subsistence-wage labor camp. […]

f you watch FOX, the reality is filtered through Rupert Murdoch’s Newscorp, NBC is General Electric news, CNN is Time/Warner news, ABC brings you into Disney’s world, and Viacom regularly checks the iconic CBS news department to make sure Edward R. Murrow is still dead and buried under a mountain of infotainment. That is when Viacom is not preparing America’s youth for slavery and death through MTV and B.E.T. […]

The corporations have begun forming their own Praetorian Guard. The massacre of Iraqi civilians and the patrolling of the hurricane ravaged streets of New Orleans have made Blackwater Worldwide, formerly Blackwater USA, the most famous of the rising corporate armies. […] Read More …

Copyright © OpEdNews, 2002-2008

Related Links:

RTSF

Posted in America, autocracy, bankruptcy, banks, bootjack tactics, cabal, Corporatocracy, democracy, Malcolm Martin | Tagged: , , , , , , , , , , , , , , , , , , , , , , | Leave a Comment »

Health Business in Uninted States of Sheepland

Posted by terres on May 6, 2008

The Sorry State of Health Care in the United States

By Ralph Nader

This is a tale of pay or die that recurs again and again all over our country and only in our country in the entire western world.

Advised by her physician to go to M.D. Anderson for urgent treatment of her leukemia, Mrs. Kelly was told she had to pay $105,000 up front before being admitted. The hospital declared her limited insurance unacceptable.

Sitting in the business office with seriously advanced cancer, she asked herself – “Are they going to send me home?” “Am I going to die?”

Time out from her torment for a moment. M.D. Anderson started this upfront payment demand in 2005 because of a spike in its bad debt load.

The Journal explains – “The bad debt is driven by a larger number of Americans who are uninsured or who don’t have enough insurance to cover costs if catastrophe strikes. Even among those with adequate insurance, deductibles and co-payments are growing so big that insured patients also have trouble paying hospitals.”

It isn’t as if non-profit hospitals like M.D. Anderson are hurting. Look at this finding in an Ohio State University study: net income per bed at non-profit hospitals tripled to $146,273 in 2005 from $50,669 in 2000. And you also may have noticed the huge pay packages awarded hospital executives.

M.D. Anderson, exempt from taxation, recipient of funds from large government programs and research grants has cash, investments and endowment totaling $1.9 billion, with net income of $310 million last year, the Journal reports.


A twelfth-century Byzantine manuscript of the Hippocratic Oath in the form of a cross dagger.

Hippocratic Oath Modern Version written by Louis Lasagna, former Dean of the Sackler School of Graduate Biomedical Sciences of Tufts University, in 1964.

Back to the 52 year old, Lisa Kelly. She and her husband returned with a check for $45,000. After a blood test and biopsy, the hospital oncologist urged admittance quickly. Then the hospital demanded an additional $60,000-$45,000 just for the lab tests and $15,000 for part of the cost of the treatment.

To shorten the story, she received chemotherapy for over a year. Often her appointment was “blocked” until she made another payment.

In a particularly grotesque incident, she was hooked up to a chemotherapy pump, but the nurses were not allowed to change the chemo bag until Mr. Kelly made another payment.

She endured other indignities and overcharges. Reporter Martinez cites $360 for blood tests that insurers pay $20 or less for and up to $120 for saline pouches that cost less than $2 retail.

Imagine anything like Mrs. Kelly’s predicament and pressures occurring in Canada, Belgium, Germany, Italy, France, Switzerland, Holland, England or any other western country. It would never happen.

These countries have universal single payer health insurance. No one dies because they cannot afford health care. In America, 18,000 Americans die each year because they cannot afford health care, according to the Institute of Medicine of the National Academy of Sciences. Many more get sick or become sicker.

None of these countries spend more than 11% of their GDP on healthcare. The U.S. spends over 16% of its GDP on health care and does not cover 47 million people and tens of millions are under covered

In the U.S. the drug companies charge their highest prices in the world, even though we, the taxpayers, subsidized them in large ways. In other countries like Mexico and Canada, they cannot get away with such drug price gouging, with a pay or die ultimatum.

In the U.S., computerized billing fraud and abuse cost over $200 billion last year, according to the GAO arm of Congress. In other counties, single payer prevents such looting.

In other countries, administrative expenses of their single payer system are about a third of what the Aetna’s and other insurers rack up.

In other western countries, medical outcomes for children and adults and paid family leave are far superior to that of the U.S. The World Health Organization ranks the US health care system 37th in the world.

When apologists in Washington hear these statistics, they say “but we have the best medical research centers in the world, like M.D. Anderson.”

Clearly much is wrong with the nature of pricing health care.

Like other hospitals, M.D. Anderson is caught in a macabre spider’s web of cost allocations mixing treatment costs with research budgets, cash reserves, and just plain accounting gimmicks that burden patients. (Documents from Mrs. Kelly’s case are available at http://online.wsj.com today.)

When a friend showed the Journal’s article to a Dutch visitor, the latter blurted in anger – “you are a nation of sheep.” Not a very flattering description of “the land of the free, home of the brave.”

Someday, soon maybe, Americans will finally band together and say “enough already,” we’re going for full Medicare for all- without loopholes for corporate profiteers and purveyors of waste and fraud.

Last month after being in remission, Lisa Kelly’s leukemia has come back.

END.

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Posted in bush, cabal, Congress, corporate profiteering, corporate racketeering, corruption, human rights, medical care, military budget, politics | Tagged: , , , , , , , , , , , , , , , , | Leave a Comment »

Bush: “Madman with a razor blade in his hand”

Posted by terres on October 30, 2007

”It’s not the best way to resolve the situation by running around like a madman with a razor blade in his hand…” ~ [Putin on BushCo’s gunboat diplomacy]

Bush and “World War III”

By Ralph Nader

Mired in the disastrous Iraq quagmire, opposed by a majority of Americans, George W. Bush has reached new depths of reckless, belligerent bellowing. At a recent news conference, he volunteered that he told our allies that if they’re “interested in avoiding World War III,” Iran must be prevented from both developing a nuclear weapon or having “the knowledge necessary to make a nuclear weapon.”

To what level of political insanity has this Washington Caesar descended? Only two countries can start World War III—Russia and the United States. Is Bush saying that if Russia, presently opposed to military action against Iran, persists with its position, Bush may risk World War III? If not, why is this law-breaking warmonger, looking for another war for American GIs to fight, while his military-age daughters bask in the celebrity lime light?

Why is he using such catastrophic language?

Surely he does not think Iran could start World War III. His own intelligence agencies say that, even assuming that the international inspectors are wrong and Iran is moving toward developing the “knowledge” of such weapons, it can’t build its first such weapon before 3 to 5 years at the earliest.

Why would a regime ruling an impoverished country risk suicide, surrounded as it is by countries armed to the nuclear teeth, such as Israel and the United States? This nation of nearly 80 million people hardly needs to be reminded that the U.S. overthrew its popular premier in 1953, installing for the next 27 years the brutal regime of the Shah.

They recall that President Reagan and his Vice President, George Herbert Walker Bush urged, funded and equipped Saddam Hussein in his invasion of Iran—a nation that has not invaded any country in over 250 years—which took around 700,000 Iranian lives.

Moreover, the undeniable historical record shows that U.S. companies received licenses from the Department of Commerce, under Reagan, to ship Saddam the raw materials necessary to make chemical and biological weapons. Saddam used such lethal chemical weapons, with the tolerance of Reagan and Rumsfeld, on Iranians to devastating effect in terms of lives lost.

Then George W. Bush labels Iran a member of the “axis of evil” along with Iraq, ignoring a serious proposal by Iran in 2003 for negotiations, and shows what his language means by invading Iraq.

The authoritarian Iranian government is frightened enough to hurl some defiant rhetoric back at Washington and widen its perimeter defense. Seymour Hersh, the topflight investigative reporter for the New Yorker magazine has written numerous articles on how the crowding of Iran, including infiltrating its interior, has become an obsession of the messianic militarist in the White House.

The Pentagon is more cautious, worrying about our already drained Army and the absence of any military strategy and readiness for many consequences that would follow Bush’s “bombs away” mentality.

Then there is the matter of the Democrats in Congress. After their costly fumble on Iraq, the opposition Party should make it very constitutionally clear, as recommended by former New York Governor, Mario Cuomo in a recent op-ed, that there can be no funded attacks on any country without a Congressional declaration of war, as explicitly required by the framers of our Constitution.

But the Democrats are too busy surrendering to other Bush demands, whether unconstitutional, above the law or just plain marinated in corporate greed. Some of this obeisance was all too clear in the Democrats questioning of Bush’s nominee for Attorney General, Michael B. Mukasey.

After the two days of hearings, no Democrat has yet announced a vote against Mukasey, even after he evaded questions on torture and argued for the inherent power of the President to act contrary to the laws of the land if he unilaterally believes he has the inherent constitutional authority to do so.

This position aligns Mukasey with the imperial views of Bush, Cheney, Ashcroft and Gonzales on the “unitary Executive.” In short, reminiscent of the divine right of Kings, the forthcoming Attorney General believes Bush can say that ‘he is the law’ regardless of Congress and the judiciary.

After two recent lead editorials demonstrating its specific exasperation over the Democrats’ kowtowing to the White House, the New York Times added a third on October 20, 2007 titled “With Democrats Like These…” The editorial recounted the ways Democrats, especially in the Senate, have caved on critical constitutional and statutory safeguards regarding the Bush-Cheney policies and practices of spying on Americans without judicial approval and accountability.

Accusing the Democrats of “the politics of fear,” the Times concluded: “It was bad enough having a one-party government when the Republicans controlled the White House and both houses of Congress. But the Democrats took over, and still the one-party system continues.”

There is more grist coming for the Times’ editorial mill. Last week, the first African-American chair of the powerful House Ways and Means Committee, Charles Rangel (D-NY), declared that Treasury Secretary, Henry Paulson, Jr., fresh from Wall Street, had persuaded him, during a decade of increasing record profits, to lower the porous corporate income tax rate from 35% to 25%.

“We can live with that,” Chairman Rangel declared.

Would the working families in his District, who would be paying a higher tax rate on their modest income, agree?

-END-
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Related links [Updated Nov. 3]

Missing Nukes: Treason of the Highest Order
Bush, Mitty and Munchhausen By Proxy Syndrome
Deranged, Disconnected, and Dangerous [the cabal wouldn’t have it any other way!]
Castro: ‘Bush is deranged’

Posted in all-hat-no-cattle, bush, cabal, Cheney, Iraq, World War III | Leave a Comment »