Zane Safrit

Congress Cuffs Executive Bonuses

Unlike the rules issued by the White House, the limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid.

"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure." - Washington Post

Do you know where to begin to address his comments?

Scott. Maybe you've been busy of late. But..our banking system is in near-collapse. Ours and the world's. US banks, and their executives you represent, are holding us taxpayers and our businesses hostage for their unwillingness to use our taxpayer money to jumpstart our economy. Your clients won't disclose how they are using our taxpayer dollars funds...and the chief lobbyist for the nation's largest financial services firms...is worried that the current incentive structure may be undermined.

Well, Scott. Maybe, it should be undermined. Because the current incentive structure has delivered the results that we, the taxpayers, have to rescue you and your clients from. You and us. Together.

Your incentive structure has been a bit undermined by your performance under your incentive structure. And, OUR incentive structure has been undermined....because of this performance of your clients. Have you read about the unemployment figures, the decline in spending..., Scott?

But it's our money that's funding your incentive structure...without our money you would have no meaningful incentive structure. You would have no incentives.

Scott sounds like a patriot when he says he's worried that the top traders at these banks we're rescuing will leave for European banks whose incentive structures are not restricted. Really? See many banks on any continent intereested in traders and their leaders from American banks who led their banks to the edge of the cliff and then asked for somebody, somebody...Yes, the American taxpayers will do...to pull them back from the cliff because they can't help themselves?

And, if these overseas banks are interested...do they have the means to offer a meaningful incentive structure?

Scott. The incentive structure (along with the lack of regulatory oversight...) is part of the problem. And you're not helping, either.

Stimulus Plan: What we all need

Exactly.

Story of the Week: Obama's Inaguration

So much coverage is available for this game-changing event. Here's a few of my favorites:

The Big Picture from The Boston Globe. A wonderful collection of photos taken from around the world as people celebrated the inauguration of President Obama.

President Obama's Inaugural Speech, text. You can google the term Obama's inaugural speech for more options. Some of my favorite passages include:

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness...

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake.

Here's his oath of office including the stumble-moment with Chief Justice Roberts:

Story of the Week: USAir Flight Lands in Hudson River; all are rescued

From jkrums on twitter using twitpic.

Yesterday a flight from LaGuardia with 150 or so passengers and crew made an emergency landing in....the Hudson River. This was made necessary when birds flew into and disabled the only 2 engines of the airplane immediately after its takeoff.

Through the quick thinking of the crew and the cooperation of the passengers amazingly no lives were lost. In fact, only one passenger suffered injuries.

The rapid response of not only emergency rescue but of ferry transportation (like the ferry Jkrums was on as a passenger, but also private craft, served to rescue all aboard.)

USAToday has a photo and profile of the pilot as well as a Google Earth map of the path of this flight.

LA Times covers the awkwardness of CISCO’s ad about Travel Less, Save More with the line about ‘the unlikely event of a water landing’ that played during CNN’s coverage of the rescue.

Atlanta Journal Constitution shows luck’s a state of mind as flight 1549 sold out the day after those 4 numbers were chosen in the state’s Pick 4 lottery.

NY Times has an animated graphic....with some excellent pics.

There’s more coverage if you  Google  Flight 1549.

Update, Sunday, January 18. Transcripts and more pictures from NY Times.

Story of the week: 2008 Ends, 2009 Begins

2008 was a year of misery. Extreme weather, devastating economic policies with their chickens roosting comfortably, ugly politics, scandals in sports, who knew there were so many greedy people masquerading as Masters of the Universe aka Financial Wizards and national leaders(we found out didn’t we), the last year of an abysmally inept White House administration, Israel and Hamas are at it with civilians in the middle and a new collection of destructive toys to use on each other compliments of their best friends (arms/weapons dealers in Russia, China, US...) whispering “use them...”, Afghanistan worsens, India and Pakistan have the same friends and hear their same whispers.

Our infrastructure's crumbling, our economy's stumbling, our corporate giants embarass us when they're not inflicting pain on us, and we struggle to maintain our lead as the world's leader in innovation (we forfeited that title in manufacturing decades ago).

And out of that misery though comes:

Change, hope and a renewed sense of community. No, this isn’t an Obama spot. But we saw a grassroots political campaign that swept by the entrenched, vested interests in Washington and Wall Street.  There’s a renewed sense of community in our country now, that we’re all in this together rich and poor, haves and havenots. There’s a heated debate to find solutions for our healthcare system.Heated debate means others, consumers, have joined the discussion now. There’s a clear change in the direction of our White House AND Congress. It’s but a first step and frankly given how long the journey looks I’m a bit impatient. But, it’s a first step.

There's a renewed commitment to innovation and the education needed to sustain it. Finally, someone discusses infrastructure...now that no one comes to the marketplace any more. But hey, it's a start. 

Social media has given voice to the wisdom of the crowd, That’s our voices, as citizens and as consumers. Collectively, we have a pretty high batting average. And collectively, we stay centered, neither right nor left, and can correct any extremes without stifling the wisdom of their champions.

2008 was a year of transformation and change for me and my wife, personally and professionally. Some painful. Most of that from the process of clearing out old attitudes, relationships built around those attitudes, and learning to embrace initially with fear but with growing confidence, what and how and with whom I want to spend my day.

Maybe, that’s why the morning of 2009 I felt a new day had arrived. For no particular reason I felt hopeful and positive, even mildly euphoric. So many folks on twitter were sharing the same experience the morning of January 1.

I was happy all day. For a morning after, that’s a good thing.

But the sense was that a whole range of opportunities and challenges await me, us. And they’ll arrive quickly (not quick enough from this spot, but ultimately I sense their timing will be near-perfect.) in 2009 because now I’m ready for them.

2008  Ends. 2009 Begins. Let the good times roll.

Story of the Week: Israel, Gaza, Hamas, Palestine

Hamas sent hundreds of missiles into communities in Southern Israel in recent days and weeks.

Israel responds with bombings and maybe infantry troops.

Hundreds dead, thousands traumatized, oil prices ratchet up, world powers begin to pick sides, Iran jumps in, more military sales deliver more military tools to be used and fewer alternatives to their use and devastation....

It's Groundhog Day in the Middle East...and for everyone in the world. Only in this movie, real people are really dying.

Happy New Year.

Links from any major media outlet. Here's a few of my preferences:

Debka is a good source of news about the Middle East. It has a pro-Israeli perspective. But its news sources have proven to be quite good over the past 7 years I've followed it with mainstream media reporting the same stories, but weeks later with much less depth. They have a Gaza War Diary section devoted exclusively to this current Gaza War.

Gaza Diary. The Gaza War seen through the eyes of a Palestinian living in Rafah, the south end of Gaza.

I'm sure there are diaries of civilians living in Beersheba, and other cities in Israel under the attack of Hamas missiles.

AlJazeera news site and on twitter as AJGaza.

Update, 1/3/2009: Israeli troops await the order to enter Gaza.

Story of the Week: The Inaugural Prayer

President-Elect Barack Obama chose Rev. Rick Warren to present the invocation at his inaugural day ceremony where he takes the oath of office has created...a stir. 

And maybe that everybody is astir, from both sides of the podium or pulpit, from those in the church and not, from friends and foes alike of both Obama's and Warren's makes this a great decision.

Why? As much I don't care for the reverend....if you're going to be an inclusive president, you're going to be inclusive of everyone. And that includes those whose brand of religion includes views and opinions you don't share, don't support, do share and do support. We've been through 8 years of politically correct religion and religiously correct politics. And now we have a leader who actually...embraces, includes, gives a public platform to those with dramatically different viewpoints on hot-button issues of the day including the rights of adults  to marry the adult of their choice (I support it.).

Here's my favorite response. It's from David Weinberger at NPR, titled I'm a Lefty and I like Obama's Pick of Rick Warren.  Obama, says Mr. Weinberger, is:

more interested in addressing a fundamental issue that we liberals have been just plain wrong about. And so have been the conservatives. That problem is that we're so damn angry at one another. All the time. For decades. We can barely live in the same country. The blue states sneer at the red states. The red states think the blue states aren't really America. We can't go on this way.

He's right. We can't go on this way. A house divided cannot stand. And uniting us will require us to...gasp...talk with each other. And that first step starts with the invocation at Obama's oath of office ceremony.

(Personally, I'm going to practice what I preach here over the holidays. I'm going it out with my in-laws. I'll let you know how that goes. If I don't mention it again, it didn't go well. )

Updates:

Hardball Discussion on YouTube.  Supporters of Rick Warren and the Gay Community debate the stands of Rick Warren, the sea change in the national conversation since this decision.

Yeah. That's right. So what?

Let’s say the setting is a review of a once-popular employee and their high-profile project. It's the project they championed in the organization. It’s the one they staked their career on at your company. They built their whole leadership around this one project.  They asked for your trust to work on a hunch, on a gut decision.

And you gave them the right to fail.

And fail they did. Gloriously, for all to see. And they flaunted the right to fail, again and again, ever bigger. Every area. Costs - Financial, Costs-talent, costs-reputation, costs-legacy, costs-brand, all show horrendously negative ROIs. Never once did they meet a goal, rarely did they articulate a target goal performance. Their project sucked resources from other vital projects for your company, dissension was created as others saw a different set of criteria used to support and evaluate this employee and their grand scheme, the reactions of the market were misgauged, as were those of employees, customers and prospects. The response from potential partners was greatly underestimated or overlooked or dismissed.

And it’s a mess, now.

And during their review with you over the status of the project (still not completed, still draining resources from other projects), their assumptions (all wrong)...you question them about...just one of the wrong assumptions. And they answer: Yeah, that’s right. So what?

What would you do?

As much as you/we, the manager, may want to blame this person...he’s our creation. A situation like this is a situation of our creation. An employee who goes this far, goes this far with our approval, endorsement and the resources we allowed them to have. There were many opportunities to stop them sooner. And we chose not to. We were too busy.

But, that’s what leaders and managers do. They set  limits. They hold people accountable. They stop projects before more resources are wasted. They unite, not divide, organizations. They make democracies work.

Yeah, that’s right. So what?

Senate Won't Bailout Big Three Automakers

The White House, President-Elect Obama and Congressional leaders, many of them Democrats, failed to win Senate approval for a financial bailout package to support the Big Three Automakers. - NY Times.

Republicans turned against their leader, President Bush, and his messengers last night and voted against the plan to offer up to $14 billion in taxpayer money to Ford, GM and Chrysler.  Many of them, including Senators McConnell of Kentucky, DeMint of Ohio, Bob Corker of Tennessee and Richard Shelby of Alabama, cited the highly unionized workforce and their compensation plans as the source of their displeasure with the proposed bailout plan from the White House, etal.

One irony with their primary objection was that US workers at Toyota's plant in Georgetown, KY, the state Sen. McConnell represents, received higher total compensation from base pay and bonuses than their  unionized colleagues in Michigan.

... Toyota Motor Corp. gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers... AfterMarket News, February 1, 2007

Sen. McConnell's Statement. 

Another unstated irony, purely a coincidence, is the foreign carmakers have significant manufacturing operations in the states of...wait for it...Tennessee, Kentucky and Alabama.

Alabama is home to plants for Mercedes-Benz, Honda, Hyundai and Toyota. Tennessee is getting a new Volkswagen plant and is home to Nissan’s North American headquarters and other manufacturing facilities.

Georgetown, Ky., in McConnell’s home state, is the site of Toyota’s biggest plant outside Japan. - Detroit Free Press

Nor, is the irony that many of these foreign car manufacturers have received assistance from the state and local governments that far exceeds on a per-employee basis the amounts now sought by the Big Three. The state of Tennessee alone has contributed over $500 million in tax breaks and direct assistance to Volkswagen in order to convince them to build a single plant in Chattanooga. Chattanooga Times Free Press.  That plant would create 2000 jobs.

So, for $250,000 per employee in tax breaks and assistance, $500 million total...Tennessee would create 2,000 direct jobs.

State leaders have been out selling for Volkswagen, hoping to lure auto suppliers to build their plants in Tennessee.  I wonder what incentives will be offered once the prospective supplier sees what incentives were given Volkswagen?

Compare that to the amount of the bailout bill, $14 billion, and the number of jobs directly connected to the Big Three and their parts suppliers. Over 830,000 jobs are created by the Big Three and the auto parts supplier industry. - NY Times.

• Over 230,000 are employed directly by the Big Three automakers. That means each of their jobs will cost us the taxpayer,  $60,000 +/-, to save.
• Another 600,000 jobs exist with the auto parts suppliers.
• 230,000 + 600,000 = 830,000. 830,000 jobs are at stake with this bailout bill for the Big Three. And $14 billion is required to save them. Each of those jobs would cost $16,000 +/- to save.

Congress can create jobs for as little as $16,000 per job. The State of Tennessee creates them for...oh, say, $250,000 per employee.

Frankly, I think the state of Tennessee and its congressional delegation should look at the UAW and the Big Three for more cost-effective job creation programs. 

Also, largely unnoticed is the preference of the UAW for the Democrats. The UAW and its PAC contributed...$1,918,450 this election cycle alone, to be exact -- into the congressional campaigns of Democrats and only $12,500 into Republicans, according to opensecrets.org - The Detroit News

Ah, yes. Revenge is sweet if served cold and  your campaign coffers are filled with donations from your newest BFF.

Now, honestly, I don't think Congress should lecture anyone on business and finance. Under their leadership, our national debt will balloon...to numbers that have no real meaning other than when these financial chickens come to roost they're going to be HUGE ... and they're going to stay for a long time.

Nor, do I think a Car Czar will work. If a national Czar would work, Russia would have kept its monarchy, the Soviet Union would never have existed, and we'd have a national drug policy that makes sense because it reduces the supply and consumption of illegal drugs. 

On the other hand, I don't think it's fair, or smart, to punish the workers, union or not, by insuring their termination by our failing to act. You see, with no one to buy...who or what will drive our economy? And why?