I’d Like to Apologize

The Book of the Week is “I’d Like to Apologize to Every Teacher I Ever Had” by Tony Danza (yes, the famous actor), published in 2012. This ebook is a personal account of Danza’s bout with trying out the profession of teaching. He taught one tenth grade English class at an inner-city Philadelphia school that allowed his trial by fire to be recorded for a reality show on the Arts and Entertainment cable channel.

This was during the 2009-2010 academic year. Danza experienced the range of extreme emotions and encountered the range of difficult issues common to modern American teachers. He does a good job impressing upon the reader how hard it is to be a high school teacher. These days, teachers have numerous pressures thrust upon them. One quote sums up the current situation: “Teachers and administrators are always worried about being fired. One complaint from a child or parent can be the end of a career.”

Danza felt he had to make learning fun because students are growing up in a society immersed in entertainment. He felt he had to go easy on disciplining students. Many of the ones he taught live in single-parent households, are the victims of abuse, abandonment, poor parenting, etc. If he did not choose his battles wisely, they might fail to see the connection between education and success in life and quit school altogether.

In addition, if teachers take students to task for minor infractions, such as wearing hoodies, using electronic devices, and even cheating– rather than fighting– “The only recourse is to… involve the dean’s office… lose precious class time…” In other words, going through all the trouble to punish problem students cheats the other students out of an education.

He saw that the teaching profession has changed for the worse significantly since he was in grade school. He noted that some parents fail to take an interest in their kids’ education, or else blame the teacher when their kids fail to do schoolwork, or are a discipline problem. One of Danza’s lessons involved a discussion of celebrities– numerous Americans are poorly educated, but are rich and famous anyway; one reason many teenagers do not see the value of education.

At every opportunity, Danza tried to teach life lessons about morals, the golden rule and empathy. The kids were less than thrilled when the school principal decided to go with them on a class field trip. Danza told the class “Make the best of a baaaaad situation.”

Danza encountered some conflicts with the reality-show crew because he was truly dedicated to teaching his kids. The producer wanted to entertain the show’s viewers.

Read the book to learn more about the above and other issues, plus standardized testing, the fate of the reality show, and whether Danza decided to return to teach the following year.

King of Capital

The Book of the Week is “King of Capital” by David Carey and John E. Morris, published in 2012.  This ebook recounts the history of leveraged buyout (“LBO” or  “private equity”) firms, mostly Blackstone Group, from the 1980’s through the first decade of the 21st century. This ebook attempts to debunk the stereotype of greedy Wall Streeters.

Back in the 1980’s, one kind of transaction or “deal” the LBO firm did, was buy out companies that were publicly traded, taking them private. It risked only a tiny amount of its own money to take ownership and take over the management, usually 5-15% of the total price. The role of the firm was to arrange financing. The management of the company (client) being bought out, was the party risking the most, and doing the buying out– borrowing a large percentage of the purchase price (leveraging) — in essence, “robbing Peter to pay Paul” with the monies raised by the LBO firm from various financial institutions.

This was where “junk bonds” came in– very risky debt instruments that carried extremely high interest rates, as much as 19%. The reason for the risk and high return, was that, in the event that the client went bankrupt, bank loans were repaid to creditors first, and if there was any money left, then much later, the junk bonds would be repaid.

According to Carey and Morris, the goal of LBO firms that were “corporate raiders” was to capitalize on the hidden value of a target’s assets that was not being reflected in its stock price. The value was there but the directors and officers of the target were too busy looting their company by throwing lavish parties at their mansions and on their yachts, and zipping around in their corporate jets.

The raiders had no interest in owning the target, but wanted to make it leaner and meaner by firing the greedy CEO’s. Then they would cash out at a profit of several times their initial investment. Over time, the targets developed strategies, such as the “poison pill” to counter the raiders. Unfortunately, “For all their talk of overhauling badly run companies, the raiders seldom demonstrated much aptitude for improving companies.” Pox on both the houses of the raiders and targets.

Buyout firms that were not corporate raiders truly wanted to own the target. “…buyout investors look for companies that produce enough cash to cover the interest on the debt needed to buy them and which also are likely to increase in value.” A major part of the job of LBO firms is to identify possible deals through extensive financial research, and then decide whether to invest in the ones predicted to succeed.

The year 1981 was a great year for LBO’s because interest rates peaked, there was an economic downturn, and stocks were down. In the autumn of 1985, two partners, Steve Schwarzman and Pete Peterson started Blackstone Group. Schwarzman said that his partnership would not be able to compete with the older, more experienced LBO firms, unless it “…brought efficiencies to a company by way of cost improvements or revenue synergies.”

The early 2000’s became a rerun of the 1980’s as financial institutions took on excessive debt loads. Fall of 2008 saw the U.S. Treasury Department and the Federal Reserve Bank raise funds to try to bail out Lehman Brothers, Merrill Lynch and AIG by calling on private equity firms like Blackstone Group to help.

Read the book to learn more about the redistribution of wealth among the wealthy over the course of three decades, and the turnover, and victories and defeats of the partners at Blackstone Group.

Memories Before and After The Sound of Music

The Book of the Week is “Memories Before and After The Sound of Music” by Agathe von Trapp, published in 2002. This ebook describes the real lives of the members of the family depicted in the legendary movie and musical “The Sound of Music.” The shows were Hollywoodized versions meant to appeal to American audiences.

Agathe, born in 1913, was the second-oldest child, and oldest daughter of an Austrian family of seven children by the first wife of a WWI commander of a submarine in the Austrian navy. The wealthy, farm-owning family had ties to royalty, and so had plenty of household help. Nevertheless, the family encountered some hardships during the political, financial and social upheavals of the first half of the twentieth century.

The author tries to set the reader straight on her family history. For example, she writes, “… we did not flee over the mountains into Switzerland. There is no mountain pass that leads from Salzburg, Austria into Switzerland. We simply took the train to Italy.”

A nanny taught Agathe and her siblings German and English. They found low-tech ways to amuse themselves. “…We used our imaginations to turn a row of chairs into an express train and a sofa into a hospital.”

They enjoyed natural wonders during their daily walks. They visited relatives, such as their maternal grandmother, Gromi, who had a spacious garden along the lakeshore. Agathe took an interest in beekeeping, mentored by the headmaster of the local elementary school, on “how to catch a swarm and how to extract honey.” He provided her with the necessary equipment, including bee hood, gloves and smoker. She harvested twelve pounds of honey a few months later.

Agathe played the guitar, while her father and siblings played the violin and accordion. They formed an amateur Schrammel Quartet; if it had been professional, it would have played Viennese folk music in “… little restaurants in Grinzing, a suburb of Vienna, during the time of harvest when the new wine is served.”

The von Trapps became a famous traveling singing group by chance. In the 1930’s, they were encouraged to enter a yodeling competition, and they won. Then came singing on the radio. Austria’s chancellor just happened to be a regular listener of the show they appeared on, and the rest is history. The “Trapp Family Singers” sang in concerts all over the world into the early 1950’s.

Read the book to learn of the von Trapp family’s adventures through the years, among them– how most of the family members lost their Austrian citizenship but were automatically granted Italian citizenship, how they stayed alive even after refusing to comply with specific Nazi orders, and what led the family to start a lodging business and music camp.

Just Plain Dick

The Book of the Week is “Just Plain Dick: Richard Nixon’s Checkers Speech and the ‘Rocking Socking’ Election of 1952” by Kevin Mattson, published in 2012. This ebook details the 1952 U.S. presidential election in which vice presidential candidate Nixon became more the center of attention than presidential candidate Dwight Eisenhower.

The dirt that generated bad publicity for a candidate in that election was of a slush fund of Nixon’s. When the news broke in September 1952 about Nixon’s alleged campaign finance impropriety, there was lots of hand-wringing among Eisenhower and his advisors as to whether Nixon should be dropped from the ticket.

The nature of the new medium of television– a visual, collective, simultaneous experience for a large audience– was a game-changer. It allowed Nixon to deliver directly to the American people, what turned out to be the perfect message in a way that repaired his reputation and ultimately helped him and his superior win the election.

Nixon’s emotional appeal persuaded his audience that he was a member of the middle class– not an elitist. Mention of his wife’s cloth coat and his dog struck just the right tone. To top off his speech, he skillfully initiated crowd sourcing by inviting voters to contact the Republican Party to express their opinion on whether he should withdraw from the race.

Read the book to learn the details of this memorable, fascinating episode in American political history.

Deals on the Green

The Book of the Week is “Deals on the Green” by David Rynecki, published in 2007. This ebook discusses how golf fuels business deals among the super-rich.

The author contends that the personality traits golfers need for success in golf and business include: friendliness, “imagination, tenacity, multitasking, guts, passion, and compassion…” The very act of playing golf is a major ingredient for success at many big-name companies, including GE, McGraw-Hill, J.M. Smucker, Tyson Foods, McDonald’s, Goodrich, Estee Lauder, Morgan Stanley and Johnson & Johnson. Businesspeople observe how others play the game– an indication of their character– to determine whether to do business with them.

The people who build a golf course include architects, landscapers and marketers. Many country clubs are exclusive, invitation-only kinds of places. The way “nobodies” can play on the golf courses at such clubs is to participate in fundraising events or volunteer to do menial work at them (and write big donation checks). Most of the major manufacturers of American golf equipment are located in Carlsbad, CA.

Etiquette dictates that any talk of business on the golf course should take place between the fifth and the fifteenth holes. There should be casual conversation, not an aggressive pitch.

Read the book to learn the names of people, places and equipment related to golf, and “…what really goes on when the titans of industry and finance get together” on the golf course.