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MACHIAVELLI WAS RIGHT: DISTRUST THE RICH

In Business, History, Law, Law Enforcement, Politics, Social commentary on February 16, 2015 at 2:04 am

As Americans vacation their way through yet another observance of Presidents’ Day, it’s well to remember the man whose name defines modern politics.

In 1513, Niccolo Machiavelli, the Florentine statesman who has been called the father of modern political science, published his best-known work: The Prince.

Niccolo Machiavelli

Among the issues he confronted was how to preserve liberty within a republic.  And key to this was mediating the eternal struggle between the wealthy and the poor and middle class.

Machiavelli deeply distrusted the nobility because they stood above the law.  He saw them as a major source of corruption because they could buy influence through patronage, favors or nepotism.

Successful political leaders must attain the support of the nobility or general populace.  But since these groups have conflicting interests, the safest course is to choose the latter.

….He who becomes prince by help of the [wealthy] has greater difficulty in maintaining his power than he who is raised by the populace.  He is surrounded by those who think themselves his equals, and is thus unable to direct or command as he pleases. 

But one who is raised to leadership by popular favor finds himself alone, and has no one, or very few, who are not ready to obey him.   [And] it is impossible to satisfy the [wealthy] by fair dealing and without inflicting injury upon others, whereas it is very easy to satisfy the mass of the people in this way. 

For the aim of the people is more honest than that of the [wealthy], the latter desiring to oppress, and the former merely to avoid oppression.  [And] the prince can never insure himself against a hostile population on account of their numbers, but he can against the hostility of the great, as they are but few.

The worst that a prince has to expect from a hostile people is to be abandoned, but from hostile nobles he has to fear not only desertion but their active opposition.  And as they are more far seeing and more cunning, they are always in time to save themselves and take sides with the one who they expect will conquer. 

The prince is, moreover, obliged to live always with the same people, but he can easily do without the same nobility, being able to make and unmake them at any time, and improve their position or deprive them of it as he pleases.

Unfortunately, political leaders throughout the world–including the United States–have ignored this sage advice.

The results of this wholesale favoring of the wealth and powerful have been brilliantly documented in a recent investigation of tax evasion by the world’s rich.

In 2012, Tax Justice Network, which campaigns to abolish tax havens, commissioned a study of their effect on the world’s economy.

The study was entitled, “The Price of Offshore Revisited: New Estimates for ‘Missing’ Global Private Wealth, Income, Inequality and Lost Taxes.”

http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf

The research was carried out by James Henry, former chief economist at consultants McKinsey & Co.  Among its findings:

  • By 2010, at least $21 to $32 trillion of the world’s private financial wealth had been invested virtually tax-­free through more than 80 offshore secrecy jurisdictions.
  • Since the 1970s, with eager (and often aggressive and illegal) assistance from the international private banking industry, private elites in 139 countries had accumulated $7.3 to $9.3 trillion of unrecorded offshore wealth by 2010.
  • This happened while many of those countries’ public sectors were borrowing themselves into bankruptcy, suffering painful adjustment and low growth, and holding fire sales of public assets.
  • The assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments.
  • The offshore industry is protected by pivate bankers, lawyers and accountants, who get paid handsomely to hide their clients’ assets and identities.
  • Bank regulators and central banks of most countries allow the world’s top tax havens and banks to hide the origins and ownership of assets under their supervision.
  • Although multilateral institutions like the Bank for International Settlements (BIS), the IMF and the World Bank are supposedly insulated from politics, they have been highly compromised by the collective interests of Wall Street.
  • These regulatory bodies have never required financial institutions to fully report their cross-­border customer liabilities, deposits, customer assets under management or under custody.
  • Less than 100,000 people, .001% of the world’s population, now control over 30% of the world’s financial wealth.
  • Assuming that global offshore financial wealth of $21 trillion earns a total return of just 3% a year, and would have been taxed an average of 30% in the home country, this unrecorded wealth might have generated tax revenues of $189 billion per year.

Summing up this situation, the report notes: “We are up against one of society’s most well-­entrenched interest groups. After all, there’s no interest group more rich and powerful than the rich and powerful.”

Fortunately, Machiavelli has supplied a timeless remedy to this increasingly dangerous situation:

  • Assume evil among men–and most especially among those who possess the greatest concentration of wealth and power.
  • Carefully monitor their activities–the way the FBI now regularly monitors those of the Mafia and major terrorist groups.
  • Ruthlessly prosecute the treasonous crimes of the rich and powerful–and, upon their conviction, impose severe punishment.

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DATA SECURITY BREACHES: “WE DON’T CARE, WE DON’T HAVE TO”

In Bureaucracy, Business, History, Law, Politics, Social commentary on February 9, 2015 at 2:06 am

Comedian Lily Tomlin rose to fame on the 1960s comedy hit, Rowan & Martin’s Laugh-In, as Ernestine, the rude, sarcastic switchboard operator for Ma Bell.

She would tap into customers’ calls, interrupt them, make snide remarks about their personal lives.  And her victims included celebrities as much as run-of-the-mill customers.

Lily Tomlin as Ernestine

She introduced herself as working for “the phone company, serving everyone from presidents and kings to the scum of the earth.”

But perhaps the line for which her character is best remembered was: “We don’t care. We don’t have to. We’re the phone company.”

Watching Ernestine on Laugh-In was a blast for millions of TV viewers.  But facing such corporate arrogance in real-life is no laughing matter.

Clearly, too many companies take the same attitude as Ernestine: “We don’t care.  We don’t have to.”

This is especially true for companies that are supposed to safeguard their customers’ most sensitive information–such as their credit card numbers, addresses, emails and phone numbers.

An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”

And the answer is clearly: No.

Its author is John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”

Click here: Cybersecurity: Does corporate America really care?

October, 2014 proved a bad month for credit card-using customers of Kmart, Staples and Dairy Queen.

All these corporations reported data breeches involving the theft of credit card numbers of countless numbers of customers.

Earlier breaches had hit Target, Home Depot and JPMorgan/Chase.

And on February 5, 2015, health insurance giant Anthem Inc. announced that hackers had breached its computer system and accessed the medical records of tens of millions of its customers and employees.

Anthem, the nation’s second-largest health insurer, said the infiltrated database held records on up to 80 million people.

Among the customers’ information accessed:

  • Names
  • Birthdates
  • Social Security numbers
  • Member ID numbers
  • Addresses
  • Phone numbers
  • Email addresses and
  • Employment information.

Some of the customer data may also include details on their income.

Click here: Anthem hack exposes data on 80 million; experts warn of identity theft – LA Times

Bad as that news was, worse was to come.

A February 5 story by the Wall Street Journal revealed that Anthem stored the Social Security numbers of 80 million customers without encrypting them.

The company believes that hackers used a stolen employee password to access the database

Anthem’s alleged reason for refusing to encrypt such sensitive data: Doing so would have made it harder for the company’s employees to track health care trends or share data with state and health providers.

Anthem spokeswoman Kristin Binns blamed the data breach on employers and government agencies who “require us to maintain a member’s Social Security number in our systems so that their systems can uniquely identify their members.”

She said that Anthem encrypts personal data when it moves in or out of its database–but not where it  is stored.

This is a commonplace practice in the healthcare industry.

The FBI is now investigating the hack.

According to an anonymous source, the hackers used malware that has been used almost exclusively by Chinese cyberspies.

Naturally, China has denied any wrongdoing.  With a completely straight face, Chinese Foreign Ministry spokesman Hong Lei said:

“We maintain a cooperative, open and secure cyberspace, and we hope that countries around the world will make concerted efforts to that end.”

He also said that the charge that the hackers were Chinese was “groundless.”

Click here: Health Insurer Anthem Didn’t Encrypt Stolen Data – WSJ

Meanwhile, John Herring’s complaints remain as valid today as they did last October.

“One thing is clear,” writes Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”

Hering warns that “CEOs don’t seem to be making security a priority.”  And he offers several reasons for this:

  • The sheer number of data compromises;
  • Relatively little consumer outcry;
  • Almost no impact on the companies’ standing on Wall Street;
  • Executives may consider such breaches part of the cost of doing business.

“There’s a short-term mindset and denial of convenience in board rooms,” writes Hering.

“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”

There are three ways corporations can be forced to start behaving responsibly on this issue.

  1. Smart attorneys need to start filing class-action lawsuits against companies that refuse to take steps to protect their customers’ private information.  There is a name for such behavior: Criminal negligence.  And there are laws carrying serious penalties for it.
  2. There must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies–and especially their CEOs–when such data breaches occur.
  3. Congress should enact legislation allowing for the prosecution of CEOs whose companies’ negligence leads to such massive data breaches.  They should be considered as accessories to crime, and, if convicted, sentenced to lengthy prison terms.

Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because our heads will roll if we don’t.”

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“YOUR CALL IS VERY IMPORTANT TO US”: PART TWO (END)

In Bureaucracy, Business, Self-Help, Social commentary on December 16, 2014 at 12:00 am

So you’ve spent the last half-hour or more on the phone, listening to one recorded message after another (and probably a symphony of bad music).

And you’re no closer to solving the problem that caused you to phone the company/agency in the first place.

What to do?

  • Go on the Net and look up the company’s/agency’s website.  Look for links to their Board of Directors.  Often enough you’ll get not only their names but their bios, phone numbers and even email addresses.
  • Start looking at the bottom of the website page.  Many companies/agencies put this information there–and usually in small print.
  • Look for the names of officials who can help you.  That means the ones at the top of the  company–or at least high enough so you can be sure that whoever responds to your call, letter and/or email has the necessary clout to address your problem.
  • If you call, don’t ask to speak directly with Mr. Big–that’s not going to happen.  Ask to speak with Mr. Big’s secretary, who is far more accessible.
  • Keep your tone civil, and try to make your call as brief as possible.  Don’t go into a lot of background about all the problems you’ve been having getting through to someone.
  • Give the gist and ask for a referral to someone who can help resolve your problem.
  • If the secretary needs more time to study the problem before referring you to someone else, be patient.  Answer any questions asked–such as your name, address, phone number and/or email.
  • State–specifically–what you want the company to do to resolve your problem.  If you want a refund or repairs for your product, say so.
  • Too many consumers don’t specify what they want the company to do–they’re so caught up in their rage and frustration that this completely escapes them. 
  • Be reasonable.  If you want a refund, then don’t ask for more money than you paid for the product.  If you want to return a product for an exchange, don’t expect the company to give you a new one with even more bells and whistles–unless you’re willing to pay the difference in price.
  • If you want an agency to investigate your complaint, don’t expect them to drop everything else and do so instantly.  Give them time to assess your information and that supplied by others.
  • It’s usually possible to get one agency to sit on another–if you can make a convincing case that it’s in that secondary agency’s best interests to do so.
  • For example: If you’ve been roughed up by local police for no good reason, you can file a complaint with that department–-and the FBI and U.S. Attorney’s Office (federal prosecutor) to investigate.
  • That doesn’t guarantee they will resolve your problem.  But if you can show that the cops have violated several Federal civil rights laws, the odds are that someone will take a serious look at your complaint.
  • If a company/agency official has acted so outrageously that the company/agency might now be held liable for his actions, don’t be afraid to say so.
  • But don’t threaten to sue.  Just point out that the employee has acted in such a way as to jeopardize the company’s/agency’s profits and/or reputation for integrity/efficiency.  Make it clear that the organization is not well-served by such behavior.
  • Don’t try to win sympathy for yourself.  An agency/company doesn’t care about you.  It cares only about its profits and/or reputation.  So if you got a raw deal, but don’t have the means to threaten either, its top executives won’t lift a finger to help you.
  • If you can make it clear that the profits and/or reputation of the agency/business have been compromised by the actions of its employee(s), your letter/email will instantly catch the attention of Mr. Big.  Or one of Mr. Big’s assistants–who will likely take quick action to head off a lawsuit and/or bad publicity by trying to satisfy your request.
  • Give the CEO’s secretary at least one to two days to get back to you.  Remember: Resolving your problem isn’t the only task she needs to complete.
  • If you’re writing the CEO, make sure you use his full name and title–and that you spell both correctly. People don’t get to be CEOs without a huge sense of ego. Nothing will turn him off faster than your failing to get his name and title exactly right.
  • As in the case with his secretary, be brief–no more than a page and a half.  Outline the problem you’re having and at least some (though not necessarily all) of the steps you’re taken to get it resolved.
  • Then state what you want the company to do.  Again, be fair and reasonable.
  • If your main problem is simply getting through the phone system of the business, point out that most customers won’t put up with such rudeness and inefficiency. They will take their business elsewhere.

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“YOUR CALL IS VERY IMPORTANT TO US”: PART ONE (OF TWO)

In Bureaucracy, Business, Self-Help, Social commentary on December 14, 2014 at 9:08 pm

How many times have you called a government agency or company and instantly found yourself put on hold?

To add insult to injury, you usually wind up serenaded by recorded music that would be totally forgettable if it weren’t so unforgivably irritating.

And every 30 seconds or so a recorded voice comes on to assure you: “Your call is very important to us.”

Have you ever wondered: “If my call is so important to you, why aren’t you answering it?” 

The truth is that most companies and government agencies don’t want their employees speaking with the customers who make their existence a reality.

Having your questions answered by another human being requires the company/agency to assign–and pay–people to do just that.

Most hiring managers don’t want to hire any more people than they absolutely have to.  Assigning people to answer customers’ calls means that many of those calls will take time to answer, because some problems can’t be solved in a matter of seconds.

This is especially true when the problem involves technology.

(Technical support employees of computer/software companies are notorious for advising customers to “just put the Restore Disk back into your computer and restore it back to default.”

This wipes out your problem–and everything you’ve saved on your computer.  It also gets you off the phone quickly with Tech Support.)

To a bean-counting executive, time is money.  And that’s money that won’t be going into the pockets of some already overpaid CEO.

Even government agencies like police departments don’t want to spend any more time than necessary taking the calls of those who need to reach them.

Even calls to 911 can leave you talking to no one, with only a recorded message telling you to wait until someone deigns to speak with you.

That’s why many bureaucracies arrange that when you call for help, you’re fobbed off with a recorded message telling you to visit the company’s or agency’s website.

This assumes, of course, that

  1. You have a computer;
  2. If you do, you also have Internet access; and
  3. All the answers to life’s problems–including yours–can be found on that website.

If you

  • Don’t have a computer;
  • You have a computer but don’t have Internet access;
  • You do have Internet access but the service is down;
  • Can’t find the solution to your problem on the agency/company website

you’re flat out of luck.

And the agency/company couldn’t care less.

But it need not be this way.

Companies and agencies can treat their customers with respect for their time and need for help.

That’s why companies that genuinely seek to address the questions and concerns of their customers reap strong customer loyalty–and the profits that go with it.

One of these is LG, which produces mobile phones, TVs, audio/video appliances and computer products.

LG actually offers an 800 Customer Care number that’s good 24-hours a day.

Its call center is staffed with friendly, knowledgeable people who are willing to take the time to answer customer questions and guide them through the steps of setting up the appliances they’ve bought.

Another company that dares to have human beings stand behind its products–and explain how to use them–is The Sharper Image.

Recently, Dave, a friend of mine, bought an electronic alarm clock that allows you to wake up to a variety of exotic sounds–such as a thunderstorm, the seashore, chirping birds or foghorns.

A brochure on how to set the alarm and sounds came with the clock, but Dave couldn’t make sense of it.  Luckily, there was an 800 number given in the brochure for those who needed to be walked through the necessary steps.

Dave called The Sharper Image and quickly found himself connected with a friendly and knowledgeable customer care rep.  She clearly and patiently explained what he needed to do to choose which sounds he wanted to awaken to.

And then she just as patiently repeated that list of steps while he quickly typed them up for future use if he forgot what to do.

Such an approach to customer service is not new–just extremely rare these days.

In his 1970 bestselling primer on business management, Up the Organization, Robert Townsend offered the following advice to company CEOs: “Call yourself up.”

“When you’re off on a business trip or a vacation,” writes Townsend, “pretend you’re a customer.  Telephone some part of your organization and ask for help.  You’ll run into real horror shows.

“Don’t blow up and ask for name, rank and serial number–you’re trying to correct, not punish.  Just suggest to the manager (through channels, dummy) that he make a few test calls himself.”

So how do you cope with agencies/companies that don’t care enough to help their customers?

I’ll address that in my next column.

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“WE DON’T CARE, WE DON’T HAVE TO”

In Bureaucracy, Business, Law, Politics, Social commentary on October 23, 2014 at 2:52 pm

Comedian Lily Tomlin rose to fame on Rowan & Martin’s Laugh-In as Ernestine, the rude, sarcastic switchboard operator for Ma Bell.

She would tap into customers’ calls, interrupt them, make snide remarks about their personal lives.  And her victims included celebrities as much as run-of-the-mill customers.

On one occasion, she called then-FBI Director J. Edgar Hoover, letting him know that “it really takes a Hoover [vacuum cleaner] to dig up the dirt.”

She introduced herself as working for “the phone company, serving everyone from presidents and kings to the scum of the earth.”

But perhaps the line for which her character is best remembered was: “We don’t care.  We don’t have to. We’re the phone company.”

Watching Ernestine on Laugh-In was a blast for millions of TV viewers during the mid-1960s and early 70s.  But confronting such corporate arrogance in real-life is no laughing matter.

Clearly, too many companies take the same attitude as Ernestine: “We don’t care.  We don’t have to.”

This is especially true for companies that are supposed to safeguard their customers’ most sensitive information–such as their credit card numbers, addresses, emails and phone numbers.

An October 22 “commentary” published in Forbes magazine raises the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”

And the answer is apparently: No.

Its author is John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”

Click here: Cybersecurity: Does corporate America really care?

October proved a bad month for credit card-using customers of Kmart, Staples and Dairy Queen–all of which have reported data breaches involving the theft of credit card numbers.

Earlier breaches had hit Target, Home Depot and JPMorgan/Chase.

“One thing is clear,” writes Hering.  “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”

Hering warns that “CEOs don’t seem to be making security a priority.”  And he offers several reasons for this:

  • The sheer number of data compromises;
  • Relatively little consumer outcry;
  • Almost no impact on the companies’ standing on Wall Street;
  • Executives may consider such breaches part of the cost of doing business.

“There’s a short-term mindset and denial of convenience in board rooms,” writes Hering.

“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”

Anyone who’s ever watched the operation of an airport luggage carousel has seen this principle in action.

If you’ve checked your luggage, then you need to head for the baggage carousel as  quickly as you can get out of the airplane.

Because if you don’t get there in time to grab your own bag, there’s a good chance that someone else will.

The reason?  There’s no security officer there to make sure that your luggage goes only to you, and not to someone else.

Experienced baggage thieves know this.  So they wait at the luggage carousel for a piece of luggage to go around two or three times.  If no one collects it, they assume the owner isn’t there yet–and make off with it.

Sure, there might not be anything of value in it–from the thief’s viewpoint, anyway.

No diamonds.

No jewels.

No expensive cameras.

For the thief, it’s a setback–but only a minor one.  He simply dumps the luggage and perhaps goes back to the carousel for another shot at finding a bag stuffed with valuables.

But for the traveler-victim, it’s a disaster.

Most–if not all–of his clothes are gone.

Anything personal–such as gifts he was bringing for friends or relatives–is gone.

So are any vitally-needed medications–if he was foolish enough to store these in his suitcase instead of a carry-on bag.

And does the airline care?

Don’t be stupid.

Why should they?  They got your money when you bought the plane ticket.

That’s all they wanted from you.  And the truth is, that’s all they’ve ever wanted from you–even during the “golden age of air travel” before airplanes became “flying buses.”

The skies of United were never so friendly that airlines felt an obligation to ensure that their passengers’ luggage was actually waiting for its rightful owners.

And the same principle–or lack of principle–applies with such companies as banks, department stores and insurance companies that hold the most private information of their customers.

There are two ways corporations can be forced to start behaving responsibly on this issue.

First, some smart attorneys need to start filing class-action lawsuits against companies that don’t take steps to safeguard their customers’ private information.

Second, there must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies–and especially their CEOs–when such data breaches occur.

Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because our heads will roll if we don’t.”

 

 

 

 

 

 

 

 

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COSTCO VS. WALMART: TWO VERSIONS OF EMPLOYER

In Bureaucracy, Business, Social commentary on July 29, 2014 at 2:30 pm

Corporations aren’t staffed by faceless machines.  They’re staffed by men and women.

And those men and women take their marching orders from the man (usually) or woman at the top.

Thus, you can learn a great deal about a CEO–and his company–by the way his employees are treated.

Consider the differences between Walmart and Costco.

REVENUES:

Costco:  In 2011, its revenues stood at $89 billion.

Walmart: In 2011, its revenues stood at $447 billion.  But profits declined by 4.6%, to $15.7 billion.

HEALTH INSURANCE:

Costco: About 88% of Costco employees have company-supplied health insurance.  “I just think people need to make a living wage with health benefits,” Craig Jelinek, Costco’s CEO and president, told Bloomberg.  “It also puts more money back into the economy and creates a healthier country.  It’s really that simple.”

Walmart: In January, 2014, the nation’s largest private employer will deny health insurance to newly hired employees who work less than 30 hours a week.

Walmart eliminates healthcare coverage for certain workers if their average work-week falls below 30 hours–which regularly happens at the direction of company managers.

Walmart has refused to say how many of its roughly 1.4 million U.S. workers are likely to lose medical insurance under its new policy.

Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program.

Of course, if they live in any of the 26 Republican-controlled states refusing to expand Medicaid coverage, they’ll wind up with nothing.

“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley.

In 2005, Susan Chambers, Walmart’s then-Vice President of Benefits, outlined how the company could remove sick workers from payrolls and avoid paying healthcare benefits.

Three major studies–in Georgia, Massachusetts and California–found Walmart employees to be the ones most reliant on government aid.  Annually, Walmart employees cost taxpayers more than $1 billion nationwide.

WAGES:

Costco:  Pays a living wage, with its employees starting as $11.50 per hour.  The average employee wage is $21 per hour, not including overtime.

Walmart: Most Walmart workers earn less than $20,000 a year.  According to Bloomberg News, the average Walmart Associate makes just $8.81 per hour.

CEO SALARY:

Costco: Its CEO and president, Craig Jelinek, made about $4.83 million in 2012.

Walmart: CEO Mike Duke made roughly $19.3 million in 2012.

According to CNN Money: Walmart’s CEO makes as much as 796 average employees.  Costco’s CEO makes 48 times more than the company’s median wage.

HOLIDAYS:

Costco:  Costco closed for Thanksgiving, giving its employees time to spend with their families.

Walmart: Forced its employees–on pain of being fired–to open its stores nationwide at 6 p.m. on Thanksgiving.

The results: Multiple instances of fistfights, taserings and knifings among shoppers whose greed had been roused to fever pitch by Walmart advertising.

PROMOTINS:

Costco: Hires from within. More than 70% percent of its warehouse managers began their careers working the floor or the register.

Walmart:  Facing mounting criticism for its low salaries, Walmart, on October 29, announced that it would promote more than 25,000 employees by the end of January, 2014.

STABILITY:

Costco: The annual turnover rate for employees who have worked at the company for more than one year is less than six percent.  For executives, the turnover rate is less than one percent.

Walmart: Since 2008, Walmart has fired or lost 120,000 American workers, while opening more than 500 new U.S. stores.

Many workers quit to find better-paying jobs.  As a result, turnover at Walmart has been correspondingly high.

ADVERTISING:

Costco:  Doesn’t advertise or rely on a public relations staff.

Walmart: By contrast, Walmart spent $1.89 billion on self-glorifying ads in 2011.

Recently, Walmart has been forced to launch a massive PR campaign to counteract its notoriety for low pay, employment of illegal aliens, lack of health benefits and union-busting tactics.

* * * * *

Some things can’t be quantified.

Goodwill, which is created by taking care of one’s employees–paying them a living wage and providing them with medical care–is one of them.

Similarly, ill will–created by paying the lowest possible wages and forcing employees to essentially become welfare clients–is another.

And some things that can be quantified don’t necessarily make for Nirvana.

In 2012, the Forbes 400 stated that the six wealthiest heirs to the Walmart empire were collectively worth $115 billion.

Yet this has not protected the Walton family from bad publicity–such as from striking workers and news media hungry for scandal.

Nor has it shielded the Waltons from ridicule–comedians like Jay Leno routinely joke about the hordes if illegal aliens Walmart “accidentally” hires.

Americans face a stark choice between two types of corporate employer–one that protects its employees, and another that essentially preys on them.

Which direction the nation chooses to go in will largely determine its course for long-term prosperity or short-term ruin.

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SLUMLORDS–THE REAL UNTOUCHABLES: PART THREE (END)

In Bureaucracy, Law, Law Enforcement, Social commentary on July 18, 2014 at 6:23 am

San Francisco tenants need not be put at the mercy of greedy, arrogant slumlords.  And the agencies that are supposed to protect them need not be reduced to impotent farces.

The San Francisco Department of Building Inspection (DBI)–which is charged with guaranteeing the habitability of apartment buildings–should immediately adopt a series of long-overdue refirms.

Presently, there is no bureaucratic incentive for DBI to rigorously control the criminality of slumlords.  But this can be instilled–by making DBI merely a law-enforcing agency but a revenue-creating one.

Parts One and Two of this series outlined a series of long overdue reforms at DBI.  Here are the remaining four:

  1. Landlords should be required to bring all the units in a building up to existing building codes, and not just those in need of immediate repair.
  2. Landlords should be legally required to hire a certified-expert contractor to perform building repairs.  Many landlords insist on making such repairs despite their not being trained or experienced in doing so, thereby risking the lives of their tenants. 
  3. DBI should not view itself as a “mediation” agency between landlords and tenants.  Most landlords hate DBI and will always do so.  They believe they should be allowed to treat their tenants like serfs, raise extortionate rents anytime they desire, and maintain their buildings in whatever state  they wish.  And no efforts by DBI to persuade them of its good intentions will ever change their minds.
  4. Above all, DBI must stop viewing itself as a mere regulatory agency and start seeing itself as a law enforcement one. The FBI doesn’t ask criminals to comply with the law;  it applies whatever amount of force is needed to gain their compliance. As Niccolo Machiavelli once advised: If you can’t be loved by your enemies, then at least make yourself respected by them.

By doing so, DBI could vastly:

  • Enhance its own prestige and authority;
  • Improve living conditions for thousands of San Francisco renters; and
  • Bring millions ofdesperately-needed dollars into the City’s cash-strapped coffers

And such reforms are equally overdue at the San Francisco District Attorney’s office.  Among these:

  • Creating a special unit to investigate and prosecute slumlords.
  • This should be modeled on existing units that attack organized crime, with slumlords targeted as major criminals.
  • Wiretaps and electronic surveillance should be routinely used.
  • Prosecutors should strive for lengthy prison terms and heavy fines.
  • Rewards should be offered to citizens who provide tips on major outrages by the city’s slumlords.

By doing so, it can:

  • Vastly enhance its own prestige and authority;
  • Improve living conditions  for thousands of San Francisco renters; and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers.

But slumlord atrocities are by no means confined to San Francisco.  This is a crisis that needs to be confronted at State and Federal levels.

Many cities lack adequate funding to effectively investigate and prosecute slumlord abuses.  And even when the money exists for such efforts, the will to redress such abuses is often lacking.

Thus, legislation is essential at State and Federal levels to ensure that law-abiding tenants are protected against law-breaking slumlords.

At the core of this effort must be a revised view of slumlords.  They should be seen, investigated and prosecuted in the same way as Mafia predators.

Their crimes are not “victimless.”  And their victims are usually those who are too poor to effectively fight back.

And, like the Mafia, they easily buy public officials–including law enforcement agents–and/or hide their crimes behind teams of expensive attorneys.

At the Federal level, the Justice Department should designate a special section within the FBI to investigate and prosecute slumlord abuses.

Or this could be set up within the U.S. Department of Housing and Urban Development.

  • This should be modeled on existing strike force units that attack organized crime, with slumlords targeted as major criminals.
  • Court-ordered wiretaps and electronic surveillance should be routinely used.
  • Rewards should be offered to citizens who provide tips on major outrages by the city’s slumlords.
  • Prosecutors should strive for lengthy prison terms and heavy fines.
  • Slumlords’ properties should be sold at public auctions, with the monies divided among various Federal agencies.
  • The tenants living in those properties would not be evicted.  They would instead now live under a new, law-abiding landlord.

At the State level, similar tenant-protection units should be created within the Department of Justice.

The power of slumlords calls to mind the scene in 1987′s The Untouchables, where Sean Connery’s veteran cop tells Eliot Ness: “Everybody knows where the liquor is. It’s just a question of: Who wants to cross Capone?”

It’s long past time for local, state and Federal governments to forcefully speak up on behalf of American tenants who cannot defend themselves against predatory slumlords.

As Robert F. Kennedy wrote: “Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on.”

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SLUMLORDS–THE REAL UNTOUCHABLES: PART TWO (OF THREE)

In Bureaucracy, Law, Law Enforcement, Social commentary on July 17, 2014 at 11:49 am

Slumlords would have everyone believe that San Francisco is a “renters’ paradise.”  A place where hard-working landlords are routinely taken advantage of by rent-avoiding bums who want to be constantly pampered.

On the contrary: It’s not renters who hold “untouchable” status, but slumlords themselves.

In fact, San Francisco is long overdue for serious reforms in protecting tenants.

Part One of this series outlined three overdue reforms needed at the Department of Building Inspection (DBI), San Francisco’s primary tenant-protecting agency.  Here are an additional 17:

  1. If the landlord fails to comply with the actions ordered within 30 days, the entire fine  should go into the City’s coffers–to be divided among DBI and other agencies charged with protecting San Francisco residents.
  2. In addition, he shuld be hit again with a fine that’s at least twice the amount of the first one.
  3. Inspectors for DBI should be allowed to cite landlords for violations that fall under the jurisdiction of the Department of Public Health (DPH).  They can then pass the information on to DPH for its own investigation.
  4. If the DBI Inspector later discovers that the landlord has not corrected the violation within a designated time-period, DBI should be allowed to levy its own fine for his failure to do so.
  5. If DPH objects to this, DBI should propose that DPH’s own Inspectors be armed with similar cross-jurisdictional authority.  Each agency would thus have increased motivation for spotting and correcting health/safety violations that threaten the lives of San Francisco residents.
  6. This would instantly turn DBI and DPH into allies, not competitors.  And it would mean that whether a citizen called DBI or DPH, s/he could be assured of getting necessary assistance.  As matters now stand, many residents are confused by the conflicting jurisdictions of both agencies.
  7. DBI should insist that its Inspectors Division be greatly expanded.  DBI can attain this by arguing that reducing the number of Inspectors cuts (1) protection for San Francisco renters–and (2) monies that could go to the general City welfare.
  8. The Inspection Division should operate independently of DBI.  Currently,  too many high-ranking DBI officials tilt toward landlords because they are landlords themselves.
  9. DBI should create a Special Research Unit that would compile records on the worst slumlord offenders.  Thus, a slumlord with a repeat history of defying DBI NOVs could be treated more harshly than a landlord who was a first-time offender.
  10. Turning DBI into a revenue-producing one would enable the City to raise desperately-needed revenues—in a highly popular way. Fining delinquent slumlords would be as unpopular as raising taxes on tobacco companies. Only slumlords and their hired lackey allies would object.
  11. Slumlords, unlike drug-dealers, can’t move their operations from one street or city to another.  Landlords aren’t going to demolish their buildings and move them somewhere else.
  12. DBI should order landlords to post their Notices of Violation in public areas of their buildings–on pain of serious financial penalties for failing to do so. When DBI orders a slumlord to take corrective action, s/he is the only person who is notified.  Thus, if that slumlord refuses to comply with those directives, s/he is the only one who realizes it.  Tenants have a right to know if their landlord is complying with the law.
  13. DBI should launch and maintain a city-wide advertising campaign to alert residents to its services.  Everyone knows the FBI pursues bank robbers, but too many San Franciscans do not even know that DBI exists, let alone what laws it enforces.
  14. This should be an in-your-face campaign: “Do you have bedbugs in your apartment?  Has your stove stopped working?  Are you afraid to ride in your building elevator because it keeps malfunctioning?  Have you complained to your landlord and gotten nowhere?  Then call DBI at —–.  Or drop us an email at ——.”
  15. Landlords should be legally required to give each tenant a list of the major city agencies (such as DBI, Department of Public Health and the Rent Board) that exist to help tenants resolve problems with their housing. 
  16. Landlords should be legally required to rehabilitate a unit every time a new tenant moves in, or at least have it examined by a DBI inspector every two years.  A tenant can occupy a unit for ten or more years, then die or move out, and the landlord immediately rents the unit to the first person who comes along, without making any repairs or upgrades whatsoever.
  17. Landlords should be required to bring all the units in a building up to existing building codes, and not just those in need of immediate repair.
  18. Landlords should be legally required to hire a certified-expert contractor to perform building repairs.  Many landlords insist on making such repairs despite their not being trained or experienced in doing so, thereby risking the lives of their tenants. 

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SLUMLORDS–THE REAL UNTOUCHABLES: PART ONE (OF TWO)

In Bureaucracy, Law, Law Enforcement, Social commentary on July 16, 2014 at 9:16 am

To hear slumlords tell it, San Francisco is a “renters’ paradise,” where obnoxious, lazy, rent-evading tenants constantly take advantage of hard-working, put-upon landlords.

Don’t believe it.

A 98-year-old San Francisco woman is being evicted from her apartment of 50 years, because the building’s owners want to sell the place to take advantage of the city’s booming real estate market.

“I’ve been very happy here,” Mary Phillips told KRON 4, an independent San Francisco TV station. “I’ve always paid my rent.  I’ve never been late.”

The landlord, Urban Green Investments, is evicting her and several other tenants through the Ellis Act.  This is a 1986 California law that allows landlords evict tenants to get out of the rental business.

Urban Green Investments has bought several buildings in San Francisco, evicted their residents through the Ellis Act, and is reselling the buildings for profit.  Many of those being evicted are low income families and seniors.

Phillips has vowed to fight her eviction: “They’re going to have to take me out of here feet first,” she told KRON. “Just because of your age, don’t let people push you around.”

Phillips says she has nowhere else to live and now she and her attorneys are fighting the eviction.

Even in the city misnamed as a “renter’s paradise,” slumlords are treated like gods by the very agencies that are supposed to protect tenants against their abuses.

Many landlords are eager to kick out long-time residents in favor of new, wealthier high-tech workers moving to San Francisco.  An influx of these workers and a resulting housing shortage has proven a godsend for slumlords.

The power of slumlords calls to mind the scene in 1987′s The Untouchables, where Sean Connery’s veteran cop tells Eliot Ness: “Everybody knows where the liquor is. It’s just a question of: Who wants to cross Capone?”

Many tenants have lived with rotting floors, bedbugs, nonworking toilets, mice/rats, chipping lead-based paint and other outrages for not simply months but years.

Consider the situation at the San Francisco Department of Building Inspection (DBI), which is supposed to ensure that apartment buildings are in habitable condition:

  • A landlord is automatically given 30 days to correct a health/safety violation. If he drags his feet on the matter, the tenant must live with that problem until it’s resolved.
  • If the landlord claims for any reason that he can’t fix the problem within one month, DBI doesn’t demand that he prove this.  Instead, it automatically gives him another month.
  • A slumlord has to work at being hit with a fine—by letting a problem go uncorrected for three to six months.
  • And even then, repeat slumlord offenders often avoid the fine by pleading for leniency.
  • That’s because many DBI officials are themselves landlords.

But the situation doesn’t have to remain this way.

DBI could:

  • Vastly enhance its own prestige and authority
  • Improve living conditions  for thousands of San Francisco renters, and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers.

How?

By learning some valuable lessons from the “war on drugs” and applying them to regulating slumlords.

Consider:

  • At least 400,000 rape kits containing critical DNA evidence that could convict rapists sit untested in labs around the country.
  • But illegal drug kits are automatically rushed to the had of the line.

Why?

It isn’t simply because local/state/Federal lawmen universally believe that illicit drugs pose a deadly threat to the Nation’s security.

It’s because:

  • Federal asset forfeiture laws allow the Justice Department to seize properties used to “facilitate” violations of Federal anti-drug laws.
  • Local and State law enforcement agencies are allowed to keep some of the proceeds once the property has been sold.
  • Thus, financially-strapped police agencies have found that pursuing drug-law crimes is a great way to fill their own coffers.
  • Prosecutors and lawmen view the seizing of drug-related properties as crucial to eliminating the financial clout of drug-dealing operations.

It’s long past time for San Francisco agencies to apply the same attitude–and methods–toward slumlords.

Such reforms must start with the Department of Building Inspection (DBI)–the primary agency charged with protecting tenants.

Presently, there is no bureaucratic incentive for DBI to rigorously control the criminality of slumlords.  But this can be instilled–by making DBI not merely a law-enforcing agency but a revenue-creating one.

And those revenues should come from predatory slumlords who routinely violate the City’s laws protecting tenants.

Among those reforms it should immediately enact:

  1. Hit slumlord violators up-front with a fine–payable immediately–for at least $2,000 to $5,000 for each health/safety-code violation.
  2. The slumlord could reclaim 75-80% of the money only if he fully corrected the violation within 30 days.  The remaining portion of the levied fine would go into the City coffers, to be shared among DBI and other City agencies.
  3. This would put the onus on the slumlord, not DBI. Appealing to his greed would ensure his willingness to comply with the ordered actions.  As matters now stand, it is DBI who must repeatedly check with the slumlord to find out if its orders have been complied with.

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HELL IN THE RENTERS’ PARADISE: PART THREE (END)

In Bureaucracy, Law, Law Enforcement, Social commentary on May 21, 2014 at 12:45 am

San Francisco tenants need not be put at the mercy of greedy, arrogant slumlords.  And the agencies that are supposed to protect them need not be reduced to impotent farces.

The San Francisco Department of Building Inspection (DBI)–which is charged with guaranteeing the habitability of apartment buildings–should immediately adopt a series of long-overdue refirms.

Presently, there is no bureaucratic incentive for DBI to rigorously control the criminality of slumlords.  But this can be instilled–by making DBI merely a law-enforcing agency but a revenue-creating one.

In Parts One and Two, I outlined a series of long overdue reforms at DBI.  Here are the remaining four:

  1. Landlords should be required to bring all the units in a building up to existing building codes, and not just those in need of immediate repair.
  2. Landlords should be legally required to hire a certified-expert contractor to perform building repairs.  Many landlords insist on making such repairs despite their not being trained or experienced in doing so, thereby risking the lives of their tenants. 
  3. DBI should not view itself as a “mediation” agency between landlords and tenants.  Most landlords hate DBI and will always do so.  They believe they should be allowed to treat their tenants like serfs, raise extortionate rents anytime they desire, and maintain their buildings in whatever state  they wish.  And no efforts by DBI to persuade them of its good intentions will ever change their minds.
  4. Above all, DBI must stop viewing itself as a mere regulatory agency and start seeing itself as a law enforcement one. The FBI doesn’t ask criminals to comply with the law;  it applies whatever amount of force is needed to gain their compliance. As Niccolo Machiavelli once advised: If you can’t be loved by your enemies, then at least make yourself respected by them.

By doing so, DBI could vastly:

  • Enhance its own prestige and authority;
  • Improve living conditions for thousands of San Francisco renters; and
  • Bring millions ofdesperately-needed dollars into the City’s cash-strapped coffers

And reforms are equally overdue at the San Francisco District Attorney’s office.  Among these:

  • Creating a special unit to investigate and prosecute slumlords.
  • This should be modeled on existing units that attack organized crime, with slumlords targeted as major criminals.
  • Wiretaps and electronic surveillance should be routinely used.
  • Prosecutors should strive for lengthy prison terms and heavy fines.
  • Rewards should be offered to citizens who provide tips on major outrages by the city’s slumlords.

By doing so, it can:

  • Vastly enhance its own prestige and authority;
  • Improve living conditions  for thousands of San Francisco renters; and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers.

But slumlord atrocities are by no means confined to San Francisco.  This is a crisis that needs to be confronted at State and Federal levels.

Many cities lack adequate funding to effectively investigate and prosecute slumlord abuses.  And even when the money exists for such efforts, the will to redress such abuses is often lacking.

Thus, legislation is essential at State and Federal levels to ensure that law-abiding tenants are protected against law-breaking slumlords.

At the core of this effort must be a revised view of slumlords.  They should be seen, investigated and prosecuted in the same way as Mafia predators.

Their crimes are not “victimless.”  And their victims are usually those who are too poor to effectively fight back.

And, like the Mafia, they easily buy public officials–including law enforcement agents–and/or hide their crimes behind teams of expensive attorneys.

At the Federal level, the Justice Department should designate a special section within the FBI to investigate and prosecute slumlord abuses.

Or this could be set up within the U.S. Department of Housing and Urban Development.

  • This should be modeled on existing units that attack organized crime, with slumlords targeted as major criminals.
  • Court-ordered wiretaps and electronic surveillance should be routinely used.
  • Rewards should be offered to citizens who provide tips on major outrages by the city’s slumlords.
  • Prosecutors should strive for lengthy prison terms and heavy fines.
  • Slumlords’ properties should be sold at public auctions, with the monies divided among various Federal agencies.
  • The tenants living in those properties would not be evicted.  They would instead now live under a new, law-abiding landlord.

At the State level, similar tenant-protection units should be created within the Department of Justice.

As Robert F. Kennedy wrote: “Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on.”