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HOW TO BE A SMARTER EXECUTIVE: PART TWO (END)

In Bureaucracy, Business, History, Self-Help on May 14, 2013 at 12:00 am

I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.

–Ecclesiastes 9:11

It is one thing to gain executive power, and another to hold onto it.  It is altogether different to use it wisely and justly.

Many are the dictators who have ruled long, but not justly–such as Porfiro Diaz, whose 30-year regime was ended by the Mexican Revolution in 1911.

And many are those who wanted to rule justly but could not face up to the harsh realities of power.  One of these was Francisco Madero, who democratically succeeded Diaz–but was soon betrayed and executed by Victoriana Huerta, one of his own generals.

In Part One, I outlined a number of timeless suggestions by Niccolo Machiavelli, the Florentine statesman and patriot (1469-1527) for attaining and wisely employing executive power.

Niccolo Machiavelli

Many of this nation’s corporate executives and officials manning local, state and Federal agencies (including the Presidency) would do well to pay close attention to his advisories.  Among these:

  • EVALUATING A SUBORDINATE: For a prince to be able to know a minister there is this method which never fails.  When you see the minister think more of himself than of you, and in all his actions seek his own profit, such a man will never be a good minister, and you can never rely on him.  For whoever has in hand the state of another man must never think of himself but of the prince, and not mind anything but what relates to him.
  • TREATMENT OF SUBORDINATES: And on the other hand, the prince, in order to retain his fidelity, ought to think of his minister, honoring and enriching him, doing him kindnesses and conferring on him favors and responsible tasks, so that the great favors and riches bestowed on him cause him not to desire other honors and riches, and the offices he holds make him fearful of changes.  When princes and their ministers stand in this relation to each other, they can rely the one upon the other; when it is otherwise, the result is always injurious either for one or the other of them.
  • TAKING COUNSEL: There is no way of guarding oneself against flattery than by letting men understand that they will not offend you by speaking the truth.  But when every one can tell you the truth, you lose their respect.
  • A prudent prince must therefore take a third course, by choosing for his counsel wise men, and giving them alone full liberty to speak the truth to him, but only of those things that he asks and of nothing else.
  • MAKING DECISIONS: But he must be a great asker about everything and hear their opinions, and afterwards deliberate by himself in his own way, and in these counsels and with each of these men comport himself so that every one may see that the more freely he speaks, the more he will be acceptable.  Beyond these he should listen to no one, go about the matter deliberately, and be determined in his decisions.
  • SEEK THE TRUTH:  A prince, therefore, ought always to take counsel, but only when he wishes, not when others wish.  On the contrary, he ought to discourage absolutely attempts to advise him unless he asks it.  But he ought to be a great asker, and a patient hearer of the truth about those things of which he has inquired.  Indeed, if he finds that anyone has scruples in telling him the truth he should be angry.
  • UNWISE PRINCES CANNOT BE WISELY ADVISED: And since some think that a prince who gains the reputation of being prudent is so considered, not by his nature but by the good counselors he has about him, they are undoubtedly deceived.  It is an infallible rule that a prince who is not wise himself cannot be well advised, unless by chance he leaves himself entirely in the hands of one man who rules him in everything, and happens to be a very prudent man. In this case, he may doubtless be well governed, but it would not last long, for the governor would in a short time deprive him of the state.
  • FORTUNE: I think it may be true that fortune is the ruler of half our actions, but that she allows the other half or thereabouts to be governed by us.
  • I would compare her to an impetuous river that, when turbulent, inundates the plains, casts down trees and buildings, removes earth from this side and places it on the other; every one flees before it, and everything yields to its fury without being able to oppose it.
  • Still, when it is quiet, men can make provisions against it by dykes and banks, so that when it follows it will either go into a canal or its rush will not be so wild and dangerous.

IS THERE A HITLER IN YOUR CEO?

In Bureaucracy, Business, Politics, Social commentary on May 3, 2013 at 12:35 am

Would-be CEOs and Fuehrers, listen up: Character is destiny.

Case in point: The ultimate Fuehrer and CEO, Adolf Hitler.

Ever since he shot himself in his underground Berlin bunker on April 30, 1945, historians have fiercely debated: Was der Fuehrer a military genius or an imbecile?

With literally thousands of titles to choose, the average reader may feel overwhelmed. But if you’re looking for an understandable, overall view of Hitler’s generalship, an excellent choice would be How Hitler Could Have Won World War II by Bevin Alexander.

How Hitler Could Have Won World War II

Among “the fatal errors that led to Nazi defeat” (as proclaimed on the book jacket) were:

  • Wasting hundreds of Luftwaffe pilots, fighters and bombers in a half-hearted attempt to conquer England.
  • Ignoring the pleas of generals like Erwin Rommel to conquer Syria, Iraq and Saudi Arabia–thus giving Germany control of most of the world’s oil.
  • Attacking his ally, the Soviet Union, while still at war with Great Britain.
  • Needlessly turning millions of Russians into enemies rather than allies by his brutal and murderous policies.
  • Declaring war on the United States after the Japanese attacked Pearl Harbor. (Had he not done so, Americans would have focused all their attention on conquering Japan.)
  • Refusing to negotiate a separate peace with Soviet dictator Joseph Stalin–thus granting Germany a large portion of captured Russian territory in exchange for letting Stalin remain in power.
  • Insisting on a “not one step back” military “strategy” that led to the unnecessary surrounding, capture and/or deaths of hundreds of thousands of German servicemen.

As the war turned increasingly against him, Hitler became ever more rigid in his thinking. He demanded absolute control over the smallest details of his forces. This, in turn, led to astounding and needless losses in German soldiers.

One such incident was immortalized in the 1962 movie, The Longest Day, about the Allied invasion of France known as D-Day.

On June 6, 1944, Rommel ordered the panzer tanks to drive the Allies from the Normandy beaches. But these could not be released except on direct order of the Fuehrer.

As Hitler’s chief of staff, General Alfred Jodl, informed Rommel: The Fuehrer was asleep–and, no, he, Jodl, would not wake him.

By the time Hitler awoke and issued the order, it was too late.

Nor could he accept responsibility for the policies that were clearly leading Germany to certain defeat. Hitler blamed his generals, accused them of cowardice, and relieved many of the best ones from command.

Among those sacked was Heinz Guderian, creator of the German panzer corps–and thus responsible for its highly effective “blitzkrieg” campaign against France in 1940.

Heinz Guderian

Another was Erich von Manstein, designer of the strategy that defeated France in six weeks–something Germany couldn’t do during the four years of World War 1.

Erich von Manstein

Finally, on April 29, 1945–with the Russians only blocks from his underground bunker in Berlin–Hitler dictated his “Last Political Testament.” Once again, he refused to accept responsibility for unleashing a war that would ultimately consume 50 million lives:

“It is untrue that I or anyone else in Germany wanted war in 1939. It was desired and instigated exclusively by those international statesmen who either were of Jewish origin or worked for Jewish interests.”

Hitler had launched the war with a lie–that Poland had attacked Germany, rather than vice versa. And he closed the war–and his life–with a final lie.

All of which, once again, brings us back to Niccolo Machiavelli, the father of political science.

In his classic book, The Discourses, he wrote at length on the best ways to maintain liberty within a republic. In Book Three, Chapter 31, Machiavelli declares: “Great Men and Powerful Republics Preserve an Equal Dignity and Courage in Prosperity and Adversity.”

It is a chapter that Adolf Hitler would have done well to read.

“…A truly great man is ever the same under all circumstances. And if his fortune varies, exalting him at one moment and oppressing him at another, he himself never varies, but always preserves a firm courage, which is so closely interwoven with his character that everyone can readily see that the fickleness of fortune has no power over him.

“The conduct of weak men is very different. Made vain and intoxicated by good fortune, they attribute their success to merits which they do not possess, and this makes them odious and insupportable to all around them.

“And when they have afterwards to meet a reverse of fortune, they quickly fall into the other extreme, and become abject and vile.

“Thence it comes that princes of this character think more of flying in adversity than of defending themselves, like men who, having made a bad use of prosperity, are wholly unprepared for any defense against reverses.”

Stay alert to signs of such character flaws among your own business colleagues–and especially your superiors. They are the warning signs of a future catastrophe.

HANGING UP ON THE PHONE COMPANY: PART TWO (END)

In Business, Self-Help on April 26, 2013 at 12:02 am

From November, 2011 to February, 2012, AT&T demanded that Dave pay them for a service they had failed to provide.

They had promised to supply him with Uverse high-speed Internet–at 25 MBPs a second. Instead, he had gotten only 6 MBPs a second. And a big dot in the middle of his computer screen when watching YouTube videos.

Finally, an AT&T rep told him the blunt truth:

His geographical area was not yet supplied with fiber-optic cables that could provide high-speed Internet service.

Dave canceled Uverse–and began getting a series of bills from AT&T.

First one for more than $400.

Then a reduced bill for $260.

Then another for $140.

And still another for $126.95.

After getting a phone call from a collections agency, Dave asked me to intervene with AT&T on his behalf.

So I decided to go directly to the Office of the President.

Long ago I had learned a crucial truth:

The man at the top of an organization cannot fob you off with the excuse: “I can’t do it.” He can do anything he wants to do. And once he decides to do it, everyone below will fall into line.

I already had the phone number: (800) 848-4158.

I had gotten this via a google search under “AT&T Corporate Offices.” This gave me a link to “Corporate Governance”–which provides biographies of the executives who run the company.

And at the head stands Randall L. Stephenson–Chairman of the Board, CEO and President of AT&T Inc.

I didn’t expect to speak with him. One of his chief lieutenants would be enough–such as a woman I’ll call Margie.

First, I introduced myself and said I was authorized to act on Dave’s behalf. Then I handed the phone to Dave (who was sitting next to me) so he could confirm this.

I then briefly outlined the problems Dave had been having.

Margie–using Dave’s phone number–quickly accessed the computerized records documenting all I was telling her.

She said she would need three or four days to fully investigate the matter before getting back to me.

I said that, for me, the crux of the matter was this:

An AT&T rep had told Dave the company could not supply high-speed Internet to his geographical area because it had not yet laid fiber-optic cables there.

This meant:
1.There was a disconnect between what AT&T’s technicians knew they could offer–and what its customer service reps had been told;
2.Or, worse, the company had lied when it promised to provide Dave with a service it couldn’t deliver.

I said that Dave wanted to resolve this quietly and amicably. But, if necessary, he was prepared to do so through the Public Utilities Commission (PUC) and the Federal Communications Commission (FCC).

The PUC regulates phone companies at the State level. The FCC regulates them at the Federal level.

Just as I was about to hang up, I said I couldn’t understand why Dave should have kept getting billed, since he had been assured he wouldn’t be.

Margie said that the company felt he owed $150.00 for “breaking” the two-year contract he had signed.

I immediately noted that AT&T had not lived up to its end of the contract–that is, to provide the promised high-speed Internet service. As a result, they could not demand that Dave pay for something that had not been delivered.

Clearly, this set off alarm-bells for Margie.

When I asked her, “How soon can I expect to hear from you on your company’s investigation into this matter?” she said there was no need to conduct one.

In fact, she added, she was writing out a credit to Dave of $150.00 that very minute.

Previously, she had told me it would take three or four days.

Thus, Dave did not owe the company anything for his disappointing experiment with its Uverse service.

I felt certain that Dave’s experience with a rapacious AT&T was not an isolated case. Just as banks use every excuse to charge their customers for anything they can get away with, so do phone companies.

I knew that AT&T didn’t want the PUC and FCC to start asking: “Is ATt&T generally dunning customers for money they don’t owe?”

I believe the answer would have proven to be: “Yes.”

And I believe that Margie felt the same way.

So, when dealing with a predatory company like AT&T:
1.Keep all company correspondence.
2.Be prepared to clearly outline your problem.
3.Know which State/Federal agencies hold jurisdiction over the company.
4.Phone/write the company’s president. This shows that you’ve done your homework–and deserve to be taken seriously.
5.Remain calm and businesslike in your correspondence and/or conversations with company officials.
6.Don’t fear to say you’ll contact approrpriate government agencies if necessary.
7.If the company doesn’t resolve your problem, complain to those agencies, and/or
8.Consider hiring an attorney and filing a lawsuit.

HANGING UP ON THE PHONE COMPANY: PART ONE (OF TWO)

In Business, Self-Help on April 25, 2013 at 12:10 am

Lily Tomlin introduced her character of Ernestine, the rude, gossipy, know-it-all telephone operator, in the 1960s series Laugh-In.

A typical skit would open:

“A gracious hello. Here at the Phone Company, we handle eighty-four billion calls a year. Serving everyone from presidents and kings to the scum of the earth.

“So, we realize that, every so often, you can’t get an operator, or for no apparent reason your phone goes out of order, or perhaps you get charged for a call you didn’t make. We don’t care!

“You see, this phone system consists of a multibillion-dollar matrix of space age technology that is so sophisticated even we can’t handle it. But that’s your problem, isn’t it?

“So, the next time you complain about your phone service, why don’t you try using two Dixie cups with a string?

“We don’t care. We don’t have to. We’re the Phone Company.”

All of which was–and remains–hilarious. Except when you face such behavior in real-life with the phone company.

That’s exactly what happened to a man I’ll call Dave.

Dave had had DSL Internet service with AT&T for a year, and had been entirely satisfied with it. So when AT&T offered him Uverse service for less than what he had been paying, he signed up.

But the new service never worked properly.

Dave had been promised that he would get 25 MBPs a second–double his previous download speed.

Instead he got only 6 MBPs a second. He was also being repeatedly disconnected from the Internet.

Dave called AT&T to complain. The company sent a technician to inspect the connection.

The tech told him that the line he was using for DSL was not working with Uverse. He was told he needed to install a new line to solve the problem.

Seeking a second opinion, Dave asked AT&T to send out another technician.

This one said there was already an existing CAT 5 line in Dave’s apartment. He said that by connecting this line to the computer, the problem should be solved.

But after he connected the line, Dave could not watch videos on YouTube because a dot appeared in the middle of the screen.

Since Dave had a Mac, he sought advice at his nearby Apple store. Was there was anything wrong with the computer? he asked.

The Apple rep said the problem was that he wasn’t getting enough download speed.

Dave called AT&T again.

A tech said the problem lay with the modem: Send it back and we’ll send you another.

Dave sent back the modem and AT&T sent him a second.

Dave installed the modem but still found a big dot in the middle of the screen while watching YouTube videos.

A technician tried to resolve the problem from AT&T’s own facilities, but was not able to.

Dave called AT&T and said he was going to disconnect the service because it still wasn’t working.

Suddenly, the blunt truth finally emerged:

An AT&T rep told him that his geographical area was not yet supplied with fiber-optic cables that could provide high-speed Internet service. In six months, the company would probably have such lines set up in his location.

Dave said that in six months, if AT&T had fiber-optic cables installed in his area, he would call back and have service restored.

The rep told him to send back the modem and he would owe nothing.

And that’s when the real trouble started.

Dave soon got a bill from AT&T saying he owed more than $400 for Internet service. He called them back and asked why he had gotten this bill.

The AT&T rep said the bill was to cover the costs of sending over the technicians.

Dave replied that they hadn’t installed any new lines or corrected the problem. They had only checked the line.

AT&T said they would reduce the amount Dave owed to $260. This was to cover about two months’ service and the modem—to be paid one month in advance.

Dave said that he hadn’t gotten service that worked and he would pay the money only if they could get it working properly.

AT&T told Dave to return the modem and he would owe them nothing.

Dave mailed the modem to AT&T in November, 2011.

AT&T then sent Dave a letter saying he owed them $140.

He refused to pay it.

He got another bill that said AT&T was reducing it to $126.95 for Unverse Internet service.

Dave called AT&T and complained.

This time, an AT&T rep said it had been a “computer mistake” and that this would be corrected on his next bill; there would be no such charge.

Shortly afterward, Dave got another letter on February 15, still demanding the payment of $126.95 for Uverse service.

After getting a phone call from a collections agency, Dave asked me to intervene with AT&T on his behalf.

TAXING CRIMINALS FOR REVENUES: PART TWO (END)

In Bureaucracy, Politics, Social commentary on April 19, 2013 at 12:19 am

Come visit San Francisco and you’ll see all the famous sights so beloved by tourists: Ghirardelli Square, the cable cars, the Golden Gate Bridge.

What you won’t see is one of the biggest blights facing the city: The behavior of predatory slumlords, who own both hotels and apartment buildings.

This behavior-–and the City’s steadfast refusal to change it-–poses a daily threat to the lives of San Francisco tenants. And it poses an equal threat to the City’s long-term ability to sustain its Number One source of revenues: The tourism industry.

To take one example: San Francisco is now facing an infestation of bedbugs. Everyone in the Department of Public Health (DPH) knows it. And everyone in DPH knows that many of the slumlords who own hotels plagued with these creatures refuse to do anything about them.

Bedbug

The reasons are twofold.

First, there’s a stigma attached to bedbugs that isn’t attached even to cockroaches. Roaches are filthy, but they don’t suck your blood. So when people learn that a hotel (including name-brand ones) has a bedbug infestation, they take their business elsewhere.

Second, combating bedbugs can be expensive. The most effective method involves a combination of poisons and heat treatments on a building-wide basis. Most landlords–-and certainly all slumlords–don’t want to take on that sort of expense.

San Francisco depends overwhelmingly on tourism for its revenues. A city whose hotels and apartment buildings are centers of contagion of any kind is a city destined to become a tourist ghost town, not a tourist mecca.

So, how to cope with this challenge? Here’s how:

  1. Greatly expand the Inspection Division at the Department of Public Health (DPH). This agency is legally charged with ensuring the health of San Francisco’s tenants-–both guests and residents.
  2. DPH should demand that a portion of those monies now directed toward entirely tourist-related issues be transferred to its Inspection Bureau. With those monies it can hire additional-–and badly-needed-–inspectors.
  3. Greatly expand the Inspection Division at the Department of Building Inspection–-and       make it independent of the agency. As matters now stand, too many high-ranking DBI officials tilt toward landlords because they are landlords themselves.
  4. End the culture of secrecy at DPH. The Department of Building Inspection is responsible for ensuring compliance with San Francisco building and housing codes. If a slumlord, for example, refuses to fix a tenant’s clogged bathtub drain or replace a window that’s about to fall out, the tenant calls DBI.
  5. DBI’s complaint records are immediately accessible at its website. Copies of its Notices of Violation–-ordering slumlords to correct problems-–can be obtained through the mails by request.  If a tenant wants to learn if other tenants have lodged complaints against his landlord, he can simply go online.
  6. By contrast, DPH offers nothing of this type of informational service.
  7. DPH should immediately make its records publicly available via the Internet, the same way DBI now does.
  8. DPH and 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.
  9. When DPH or DBI orders a slumlord to take corrective action, the only person who is notified of this is the landlord.   Thus, if that slumlord refuses to comply with those directives, s/he is the only one who knows about this. Given the pressing demands on DPH and DBI, weeks or months will pass before DPH/DBI learns about this violation of its orders.
  10. DPH and DBI should abandon their “gradual” approach to combating health/safety code violations in slumlord-owned apartments and hotels and hit the owner up-front with a heavy fine, payable immediately.  The landlord could recoup 75% to 80% of this money only if s/he could prove that the health threat had been totally eradicated within 30 days.
  11. If it were not, the slumlord would then be hit with a second fine twice the size of the last one and given another 30 days to correct the problem. So a slumlord hit with a $2,000 fine in January would face a $4,000 fine in February, and an $8,000 one in March.
  12. This would put the onus on the slumlord, not DBI/DPH.  These agencies now give landlords 30 days to correct a health/safety code violation. If the slumlord claims he needs more time, he’s automatically given another 30 days–minimum–to do so. This means the tenant must live with the discomfort–if not threat–of that violation until the slumlord finally decides to correct it.
  13. Inspectors for DPH and DBI should be armed with cross-jurisdiction authority. That is, if a DBI Inspector spots a health/safety violation covered by DPH, he should be able to cite the slumlord for this–and pass this information on to DPH for its own investigation. And the same should apply for Inspectors from DPH.
  14. This would instantly turn DBI and DPH into allies, not competitors. It would also make life far easier for tenants needing help. Whether a citizen called DBI or DPH, s/he could be assured of getting the assistance s/he needed. Currently, DPH and DBI Inspectors often tell citizens, “I’m sorry, that doesn’t lie within our jurisdiction. You’ll have to call—.”

By standing up to predatory slumlords, San Francisco can achieve three goals at once:

  1. Protect its residents and all-important tourist industry from predatory slumlords.
  2. Create new and popular sources of revenue for its cash-strapped public services.
  3. Set a shining example for other cities and states for how they can do the same.

TAXING CRIMINALS FOR REVENUES: PART ONE (OF TWO)

In Bureaucracy, Politics, Social commentary on April 18, 2013 at 12:00 am

The power of slumlords throughout the Nation calls to mind the scene in the 1987 movie, 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?”

This holds true even in San Francisco, the so-called “renters paradise.” The files of the City’s Department of Public Health (DPH) and Department of Building Inspection (DBI) are filled with the names of slumlords whose buildings pose real dangers to those living in them.

All that the City needs to do is find the courage to enforce its own laws protecting tenants.

By refusing to do so, the City is losing millions of dollars in revenues that it could be collecting every year from slumlords violating its health/safety laws.

Here’s the way DBI and DPH now work: A landlord is given 30 days to correct a health/safety violation. If he drags his feet on the matter, the tenant must live with that continuing problem until it’s resolved.

If the landlord claims for any reason that he can’t fix the problem within one month, DBI and DPH automatically give him another month.

A slumlord has to really work at being hit with a fine—and that means letting a problem go uncorrected for three to six months. And even then the slumlord may well avoid the fine by pleading for leniency.

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

The City could vastly improve life for its thousands of renters—and bring millions of desperately-needed dollars’ worth of revenues into its cash-strapped coffers—by making the following reforms:

  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 would be told he can reclaim most of this money only if he fully corrected the violation within 30 days.
  3. If he fails to correct the problem within that time, he should be hit again with a fine that’s at least twice the amount of the first one. The fine should increase twice as much for each month the violation goes uncorrected. Thus, if it’s $2,000 in January, it should be $4,000 in February, and $8,000 in March. And so on.
  4. The slumlord would be allowed to reclaim 75% to 80% of the fine levied against him. This appeal to his greed would ensure his willingness to comply with the ordered actions. The other portion would go directly into the city coffers to maintain needed services.
  5. If he fails to comply with the actions ordered, the entire fine should go into the City’s coffers.
  6. Inspectors for DPH and DBI should be armed with cross-jurisdiction authority. Thus, if a DBI Inspector spots a health/safety violation covered by DPH, he should be able to cite the slumlord for this—and pass this information on to DPH for its own investigation. And the same would apply for Inspectors from DPH.
  7. This would instantly turn DBI and DPH into allies, not competitors—and would mean that whether a citizen called DBI or DPH, s/he could be assured of getting the assistance s/he needed. (Currently, DPH and DBI Inspectors often tell citizens, “I’m sorry, that doesn’t lie within our jurisdiction. You’ll have to call—.”)
  8. DPH and DBI should have their Inspectors divisions greatly expanded.  Cutting back these units is a no-win situation for San Francisco renters–and for desperately-needed City revenues.
  9. Turning these agencies into revenue-producing ones 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.
  10. 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 rebuild them somewhere else. So they have to stay put.
  11. Landlords should be legally required to give each tenant a list of the major city agencies (such as DBI, DPH and the Rent Board) that exist to help tenants resolve problems with their housing. 
  12. 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 any repairs or upgrades whatsoever.
  13. 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.
  14. 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. 

Andrew Jackson once said: “One man with courage makes a majority.” And one city—acting with courage—can ensure protection for its tenants and general revenues for vitally-needed services.

If San Francisco can do this, so can California. And then so can the rest of the Nation.

MACHIAVELLI WAS RIGHT

In Business, History, Law, Social commentary on March 1, 2013 at 12:37 am

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.

THE REAL “TAKERS”: THE RICH

In Business, History, Politics, Social commentary on February 26, 2013 at 1:08 am

Ann Coulter, the Republican version of the Miss America Nazi, was devastated by the November 6 defeat of Mitt Romney.

“People are suffering,” she whined. “The country is in disarray. If Mitt Romney cannot win in this economy, then the tipping point has been reached. We have more takers than makers and it’s over. There is no hope.”

Actually, Coulter was right–but not in the way she thought she was.

The “takers” are not the “have-nots” who depend on government for assistance.  They are the “more-than-haves” who cheat the government of billions in lost tax revenues.

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.
  • Local elites continue to vote with their financial feet while their public sectors borrow heavily abroad.
  • First World countries do most of the borrowing.
  • Of the $7.3–$9.3 trillion of offshore wealth belonging to residents of these 139 countries, the top 10 countries account for 61% and the top 20 for 81%.
  • The offshore industry has many levels of protection: Private bankers, lawyers and accountants get paid handsomely to hide their clients assets and identities.  These groups also maintain influential lobbies.
  • Bank regulators and central banks of most individual countries typically view private banks as key clients.  They have long permitted the world’s top tax havens and banks to conceal the ultimate origins and ownership of assets under their supervision, especially those held in off-balance sheet trusts and
    fiduciary accounts.
  • 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.
  • All conventional measures of inequality sharply understate the levels of income and wealth inequality at both the country and global level.
  • Less than 100,000 people, .001% of the world’s population, now control over 30% of the world’s financial wealth.
  • The impact on lost tax revenue may be huge–large enough to make a significant difference to the finances of nations.
  • 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.”

Yet the study reveals two bright spots for countries fed up with being bled dry by those parasites whose allegiance runs only to their wallets.

  1. A huge pile at least $21 trillion of untapped financial wealth has been discovered–monies that can be called upon to help solve the most pressing global problems.
  2. A substantial fraction of this wealth is being managed by the top 50 players in the global private banking industry.

As a result, these findings allow nations’ leaders to:

  • Prevent the abuses that have lead to off-the-books wealth accumulation in the future.
  • Make use of the huge stock of accumulated, untaxed wealth that is already there, as well as the steady stream of untaxed earnings that it generates.

It was Stephen Decatur, the naval hero of the War of 1812, who famously said: “Our country, right or wrong.”

Billionaire tax-cheats like those uncovered in the above-cited report have coined their own motto: “My wallet–first and always.”