Profiteering of A Corporate Nature That REALLY Hurt Taxpayers and Society – Page 3

Why I Left Goldman Sachs

The Book of the Week is “Why I Left Goldman Sachs” by Greg Smith, published in 2012.

This career memoir details how the author experienced the change for the worse in corporate culture of stock brokerage Goldman Sachs (GS) over the course of a little more than a decade, from 2000 to early 2012. The company lost its way in terms of its mission and values, which embodied fiduciary duty and integrity.

In 2000, the author completed the selective, elitist, highly coveted summer internship program at the brokerage. He saw how principled the money managers were in recommending truly suitable transactions to their clients; not necessarily the most profitable ones.

When he began working there as a full-fledged staff member the following year, he took to the work, possessing the right combination of talents, skills and abilities to focus for long hours on conferring with clients and doing what was financially best for them. The goal was to build trust in order to foster a long-term relationship. It stands to reason that that is a more profitable course of action than seeking to rake in maximum money in the short term– which would provoke disloyalty from the client, when the client realizes he’s been taken advantage of.

Smith writes that a gradual change was occurring at his workplace around the start of 2005. At the time, he admittedly was “drinking the Kool Aid” like everyone else. The megabucks were multiplying because conflicts of interest were increasing betwen the brokerage and the government and other entities with which the brokerage was associated in various ways. The CEO and COO of GS were all for it. Their yearly letter to shareholders reasoned that such conflicts were inevitable, and were a sign that business was good. A telling example: GS netted approximately $100 million when it helped its client, the New York Stock Exchange merge with publicly traded, electronic exchange Archipelago in a $9 billion deal.

In the early 2000’s, one trend in the securities industry that would contribute to huge financial losses for the big firms including GS, was automated trading via software. The autotraders of the different firms were programmed to engage in largely the same behavior. They sought to trade in obscure, off-the-beaten path investments in markets in which it was difficult to find a buyer when it came time to sell. And they were all trying to sell at the same time. That was not a condition the autotrader creators had anticipated.

Another aspect of the big picture was that the people selling the financial products– more specifically, derivatives– did not themselves, understand what they were selling. It might be recalled that a derivatives debacle plagued the securities industry in 1994. Apparently, in 2007-2009, the greedy people involved in this rerun of a financial catastrophe failed to read their history, or had short memories. And governments of entire countries like Libya, were suffering losses of billions of dollars, thanks to GS, in 2007.

Read the book to learn much more about the outrageous occurrences borne of avarice witnessed by the author and the world during what became for him, an ordeal, characterized by the saying, “The fish rots from the head down.”

Webs of Power… – Bonus Post

This blogger “clicked” through the ebook, “Webs of Power: Notes from the Global Uprising” by Starhawk, published in 2002.

The ebook is the author’s description of what her activism is about. She explains that the way globalization is currently occurring is wrong because big corporations are favoring money over people. Greedy corporations (and governments) are destroying the earth and life on earth.

One specific way governments are allowing this, is through the World Trade Organization. The United States joined the Organization and signed the trade agreement called GATT. That agreement lets the Organization, whose member-countries’ representatives, appointed via cronyism, make laws whose disclosure is denied to the world. No hearings of their proceedings are permitted. The actions taken by this secret society affect workers and human rights worldwide and of course, the environment.

The negative consequences have included, for example, allowing poisons to permeate the world food supply, endangering species and keeping drug prices high, all to the benefit of global corporations. What is not a secret is that those companies have, in recent decades, increased their profitability by moving their production facilities to nations where they can get labor at minimal cost while avoiding pesky health, safety and environmental laws. The author argues that this has also resulted in significantly increased income inequality the world over.

Read the book to learn of additional ways greed and power hunger are wrecking the world, and the role the author has played, through planning and organizing protests, training protesters, protesting and writing in trying to prevent further harm; and of her various proposals for governance and allocating resources in ways that do the greatest good for the greatest number.

The Snowden Files

The Book of the Week is “The Snowden Files: The Inside Story of the World’s Most Wanted Man” by Luke Harding, published in 2014. This ebook eloquently describes how Edward Snowden became a whistleblower, and the immediate consequences of his actions.

President Barack Obama vowed to curtail intrusive collection of personal data from and on the American people during 2008. A set of policies passed after 9/11, the Patriot Act, originally allowed certain kinds of spying. The goal was to root out terrorists. Instead of curbing the program, Obama authorized the National Security Agency (NSA) of the United States government to become an all-out global spying operation. By 2009, it was collecting metadata from millions of American and English citizens, as well as numerous global government officials, through phone records and email. It teamed up with GCHQ, the United Kingdom’s governmental branch that handles intelligence, and later, elicited customer data from the major U.S. tech companies Google, Facebook, Apple and Microsoft. The NSA and GCHQ “…secretly attached intercepts to the undersea fibre-optic cables that ringed the world.”

However admirable the intentions of government officials might be– thinking they are seeking out evil and preventing incidents of terrorism, their actions are misguided. They might contend that there have been no terrorist attacks on American soil since 9/11, so therefore, the program is working. This erroneous reasoning is like the stupid joke: A man is sitting outside on a city street waving around an odd contraption. Someone walks by and asks him what it is. The man tells them it’s an elephant repellent. He is asked how he knows it’s working. He says, “It must be working. Do you see any elephants around here?”

This blogger believes that the privacy violations– arguably unconstitutional– are a secondary reason why the nature of the NSA’s actions are so dangerous. One major aspect that makes the spying so dangerous is that comprehensive searches can be done on electronic-records literally at the speed of light.

Excuse the cliche, but “Absolute power corrupts absolutely.” Abuse of power is inevitable. For instance, there have been incidents involving the TSA. Throughout history, only bad publicity generated by whistleblowers who have made serious sacrifices– their livelihoods and/or their lives– has stemmed the tide of the evildoing. The same is true with this NSA/GCHQ situation. This ebook likened the spying to the East German Stasi prior to the fall of Communism. This blogger thinks eventually, absent a whistleblower, there would have emerged an individual with the mentality of Stalin or the late U.S. Senator Joseph McCarthy. Fortunately, Snowden found a way to act on the conviction of his beliefs in a mature, if illegal, way. He communicated with the right individuals at The Guardian, “… the third largest newspaper website in the world.”

A minor side effect of the collection of massive amounts of data, even if only a fraction of it is looked at– is that mistakes of honest ineptitude will be made. Lives have been greatly inconvenienced at best, due to the erroneous data in credit records, and those whose names have been mistakenly placed on a “no-fly” list, among various other cluster screw-ups of record-keeping entities.

Read the book to learn of the different media cultures in the U.S. and U.K., and the details of this suspenseful saga.

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.