The Fall of the House of Forbes

The Book of the Week is “The Fall of the House of Forbes” by Stewart Pinkerton, published in 2011.  This volume describes the changes that occurred at Forbes (a magazine publisher named after its founding family) in the post-Malcolm Forbes era.

Malcolm, a major shareholder of the company, spent extravagantly on a collection of mansions, art, and vehicles that traversed land, sea and air; not to mention business parties. He had managed the company until his mysterious death in 1991. Thereafter, his successors imposed frugality. Nevertheless, Forbes was unprepared for the new realities of the internet.

When the magazine was finally forced to restructure its operations by instituting massive layoffs and integrating print and Web, it had already been plagued for years by arrogant and petty editors, office politics, high turnover and numerous inefficiencies. While the magazine previously had a sterling reputation for meticulous fact-checking, it has jettisoned quality for dumbed-down content and Web traffic at any cost.

It is thought that the way to achieve profitability on the Web is to foster interactivity with readers.  The Huffington Post does so, but has yet to make any money. Furthermore, research has shown that people have much poorer focus and information retention when they are reading news on a backlit screen, than when reading news in print form.

Read the book to learn the history of the Forbes family, and the people and bad choices behind the collapse of this media empire.

Healing Hearts

The Book of the Week is “Healing Hearts” by Kathy E. Magliato, M.D., published in 2010. This is a personal account detailing one woman’s experiences trying to balance her medical training and career, with her family life.

She details various issues, including but not limited to: the long, rigorous road to becoming a full-fledged doctor in her specialty; the discrimination she faces in a male-dominated field; the job emergencies that cut into quality time with her family; and the healthcare crisis in the United States.

Magliato and her husband have a combined 43 years of education and training in medicine. She, in cardiac surgery; he, in liver transplants. She describes the hardships she faces when passionately attempting to save lives. She must ignore her own physical needs while standing for, say, fifteen hours in a row to help provide patients with a replacement heart, or veins or valves. She needs to hold particular medical instruments in place for many minutes without flinching, lest she harm the patient.

Magliato predicts a collapse of the American health care system. The reason is simply that health insurance companies do not pay what hospitals bill them; rather, they pay what they feel like paying. An insurance company might be billed $385,000 for heart surgery hospitalization, but it might pay the hospital only $54,000.

“…a hospital is ecstatic whenever it collects more than 10% of the bill. How can hospitals not only survive but be able to deliver state of the art care when their price is not met? They can only increase their quantity until the hospital is full. They can only cut their costs until the delivery of quality health care is jeopardized.”

Fateful Harvest

The Book of the Week is “Fateful Harvest” by Duff Wilson, published in 2002. Here is yet another book that describes one of the countless ways humans are destroying the earth and themselves.

Wilson, a journalist, revealed an environmental problem (and by natural extension, health hazard) perpetrated by large corporations on people in a small town in Washington State. It is unknown how many people elsewhere are affected, since it is extremely difficult to prove proximate cause when it comes to cancer in people who have had unmeasured exposure to countless carcinogens throughout their lives. The story was reminiscent of the book and movie “A Civil Action.” However, in Quincy, Washington, there has yet to be a class action suit.

In recent decades, companies have found a way to save millions of dollars disposing of toxic wastes they generate. In the 1990’s, they paid $50-$100 a ton to have fertilizer companies use those wastes in fertilizer, which was then sold to farmers. They would have paid $200 or $300 a ton to dump the wastes in a landfill instead. The fertilizer companies take advantage of a loophole in the law, which regulates “wastes,” not “products.” Fertilizer is a “product” even when it contains fly ash, contaminated phosphoric acid, beryllium, cadmium, chromium and other toxins from automakers, zinc smelters, copper recycling plants and steel mills.

Food becomes contaminated when grown in contaminated fertilizer. The farmers grow the potatoes, corn and beans, etc., sold to food processing plants that make and sell French fries and other edible products.

Read the book to learn how this serious environmental threat was discovered, and the various reasons why outspoken farmers, a horse breeder and the mayor, among other adversely affected Quincy residents, could not acquire sufficient power and influence to close the loophole in the law.

Coronary

The Book of the Week is “Coronary, A True Story of Medicine Gone Awry” by Stephen Klaidman, published in 2007. This book recounts what happens when people are afflicted by certain aspects of human nature:  greed, power-hunger and fear. It is a sensational story, the kind even tabloids could not fabricate.

In the 1990’s and single-digit 2000’s, there was a cardiac surgeon, one Dr. Moon, who exhibited the first two aspects in spades– instilling dire panic in impressionable patients, telling them that their clogged arteries could kill them at any second, and therefore, they had to be scheduled for triple or quadruple bypass surgery within the week. Those patients underwent the rigorous, dangerous, and worst of all– in the vast majority of cases– unnecessary procedure, taking weeks to recover, getting saddled with medical bills.

Dr. Moon loved the control he had over people, and enjoyed a lavish lifestyle. His reputation was sterling, due to word-of-mouth and great public relations (people truly believed he saved their lives). The hospital where he committed his medical malpractice was one owned by the then-disreputable holding company, National Medical Enterprises (which later changed its name to Tenet Healthcare).

Wait, there’s more! There were other greedy parties involved in the story. Three people saw what was really happening, and found a way to capitalize on the situation. They brought a Qui Tam lawsuit against the doctor and his accomplices. This means they accused him of bilking Medicaid and Medicare out of big bucks by billing the federal government for unnecessary surgeries. They were expecting to reap a large reward for reporting the errant doctor.

Read the book to learn the sordid details and outcome of this extreme saga.

Birthright

The Book of the Week is “Birthright: Murder, Greed and Power in the U-Haul Family Dynasty” by Ronald J. Watkins, published in 1993. This is a cautionary tale about an American public corporation whose founder failed to take steps to secure control of his company. L.S. Shoen “lacked the heart to dilute the shares of his oldest children. If he had issued himself more shares, he could have guaranteed he would always have control or if he had modified the rules, only a supermajority of shareholders could have ousted him.”

The company’s stock situation aside, the story began after WWII, when Shoen started his truck rental business. The business proved successful until his children attained adulthood, at which time, he favored two of his sons, who drained the company’s resources on their expensive hobbies. This bad situation led to a legal dispute among family members over company ownership, that resulted in murder. The newspapers mockingly reported the court battles as a family fight among “the idle rich”, as the majority shareholders were publicly viewed as heirs to the family fortune.

One of the sons was suspected of perpetrating the said murder. This is an extreme story, because even when American family members are fighting over company ownership, they rarely stoop so low as to terrorize the rival camp by killing someone.

The Odds Against Me

The Book of the Week is “The Odds Against Me” by John Scarne, published in 1966.

This is the autobiography of a man passionate about gambling. Starting in elementary school, he exhibited an incredible talent for calculating figures in his head. As a teenager, Scarne gravitated toward performing magic tricks, and gambling. He developed expertise at manipulating playing cards. His parents were less than thrilled, as they wanted him to choose a noble profession.

Eventually, Scarne made a career of assisting law enforcement with identifying rigged games in casinos. In his book, he described a sting operation against a croupier who was using a magnetized roulette ball, and other dishonest behind-the-scenes goings-on in games of chance.

Personal History

The Book of the Week is “Personal History” by Katharine Graham, published in 1997.

The autobiographer was born in June 1917. She grew up in a large, wealthy family, in New York City, Washington, D.C. and Mount Kisco (upstate New York). She attended private schools. At high school dances, “Of course, no boys were allowed so all the girls put on evening dresses and corsages and danced with each other.”

The autobiographer’s father, Eugene Meyer, a business tycoon, purchased the Washington Post in 1932. In 1942, she wed Phil Graham, and took his name. Over the next ten years or so, they had four children (a daughter and three sons) who survived to adulthood. In 1946, her husband was named publisher of the Post. In 1963, she experienced serious personal problems that led to her taking over the paper.

Two of the Post‘s journalists, the infamous Woodward and Bernstein, were the first to seize upon the story of the break-in at the Watergate Hotel (the 1972 campaign headquarters of the Democratic party) by Republican party operatives. Over the next few years, the paper proceeded to reveal the corruption present in the Nixon administration with regard to the president’s reelection and the start of the Vietnam War. The story was extremely complex. The paper was at once courageous and foolish for casting aspersions on the Federal government. For, the Washington Post Company owned television and radio stations, in addition to print publications. These media holdings found themselves the victims of retaliatory action when it came time for the FCC to renew their broadcast licenses.

Lawsuits were launched in connection with the scandals over whether news articles published by the Post, were revealing State secrets that would compromise the national security of the United States. Many people thought the government was simply trying cover up its own embarrassing conduct. As is now evident, the post-Nixon decades saw history repeat itself many times over both in terms of similar scandals and overzealous classification of documents.

There occurred a mid-1970’s debilitating four and a half month strike of the many unions on which the Post had become too dependent through lax management. Before disgruntled workers walked out, some sabotaged the printing presses and thereafter waged a campaign of telephone threats and physical violence on picket-line crossers. Graham got right down in the trenches, moonlighting alongside non-union executives to get the paper out. She also achieved several female “firsts” and provided various examples of how being female subjected her to treatment males would not have experienced.

The Post had its ups and downs through the years.  In early 1991, Graham handed down leadership of the Washington Post Company to one of her sons.

Into Thin Air

The Book of the Week is “Into Thin Air: A Personal Account of the Mount Everest Disaster” by Jon Krakauer, published in 1999. This book tells the story of a group of people (naive tourists) in 1996 who had a burning desire to climb the world’s tallest mountain, yet were ill-prepared to do so. The guides they hired charged tens of thousands of dollars, but the guides were themselves inexperienced in dealing with the trip’s harsh conditions. Among other serious problems, there was a lack of: a) life-sustaining equipment due to poor planning, b) physical fitness and c) adaptation to the altitude among the participants. One thing led to another… Read the book to learn of the tragedy that ensued.

Ben & Jerry’s: The Inside Scoop

The Book of the Week is “Ben & Jerry’s: The Inside Scoop, How Two Real Guys Built A Business With A Social Conscience and A Sense of Humor” by Fred Lager published in 1995.

Ben Cohen and Jerry Greenfield, a couple of childhood friends who had drifted apart, resumed their friendship in their late twenties. Their work lives were aimless at the time, so they decided to go into business together. They settled on selling ice cream, based on Ben’s life philosophy, “If it’s not fun, why do it?”

Ben and Jerry worked around the clock in the couple of years it took to create a business plan and convert a gas station in Burlington, Vermont to an ice cream store. The 1978 Grand Opening saw the giveaway of free ice cream cones to the public. This book– the owners’ first– describes the trials, tribulations and triumphs they experienced in getting the business up and running, and growing.

Leg the Spread

The Book of the Week is “Leg the Spread” by Cari Lynn, published in 2004.  The author interviewed several current and former commodities-futures traders, providing detailed descriptions of their days at the market in Chicago.

Some traders, employees of a broker-dealer, actually stood on the trading floor, yelling and waving paper from the time the market opened at 8am until mid-afternoon.  Others traded online.  They had good days and bad days.

One female who formerly made a large amount of money on the trading floor before becoming burnt out, had many bad days, both because the job itself was stressful, and because the vast majority of people around her– practically all men– were sexist.  In many cases, the way for a female to get ahead besides having super luck, quick math skills and keen intuition about human behavior, was to sleep with one’s (male) boss.

Read the book to get a comprehensive, entertaining picture of the American commodities-futures market in the mid-single-digit 2000’s.