Monday Reads

good morning!!

There’s another Wikileaks release on BP, Gitmo, and BOA on deck.  I’m dying to get my hands on the BP and the Bank of America data drop.  Right now, they’ve been sorted out to various people to publish should Assange disappear or meet some other bad end.  This has all the stuff of a real good IRL thriller and I’m just gleeful about it all.

That’s probably going to hit some time this week and will shoot to the top of the news.

This is from The NY Post.

The military papers on Guantanamo Bay, yet to be published, believed to have been supplied by Bradley Manning, who was arrested in May. Other documents that Assange is confirmed to possess include an aerial video of a US airstrike in Afghanistan that killed civilians, BP files and Bank of America documents.

We will do a live blog as the information becomes available.  You can also find a teaser on Fox News. Additionally, there’s an interesting bit up at the UK Guardian on the Chinese Government hacking Google.  Both of these come via Memeorandum.

The hacking of Google that forced the search engine to withdraw from mainland China was orchestrated by a senior member of the communist politburo, according to classified information sent by US diplomats to Hillary Clinton’s state department in Washington.

The leading politician became hostile to Google after he searched his own name and found articles criticising him personally, leaked cables from the US embassy in Beijing say.

That single act prompted a politically inspired assault on Google, forcing it to “walk away from a potential market of 400 million internet users” in January this year, amid a highly publicised row about internet censorship.

The explosive allegation that the attack on Google came from near the top of the Communist party has never been made public until now. The politician allegedly collaborated with a second member of the politburo in an attempt to force Google to drop a link from its Chinese-language search engine to its uncensored google.com version.

There’s more interesting tidbits up at the Daily Mail.

UK firm Rolls-Royce lost out on a £200million contract to supply helicopter engines to Spain after the U.S. lobbied Prime Minister Jose Luis Zapatero in Madrid. The deal was eventually signed by American company GE.

And European Union President Herman Van Rompuy told a U.S. ambassador that European troops were still in Afghanistan only ‘out of deference’ to America.

I’m sure the mothers and fathers and wives and husbands and sons and daughters of those dead European Troops certainly appreciate the ‘deference’ statement.  Whoa!

Here’s a really interesting link at The Economist.   I have to admit that I have a fairly limited attention span for management professors since I’m of the school that says you either got it or your don’t, but Henry Mintzberg who is Cleghorn Professor of Management Studies at McGill University had me reading from the headline forward.

Too many corporate “leaders” have trashed their enterprises, taking with them America’s legendary sense of enterprise. The scorekeepers cannot fix that. To understand the basis for such a sweeping claim, add up the stories you have heard about the goings on in so many of the largest American enterprises. Then you may get it.

Get it, not just about the scandal of executive compensation, but also about its destructive consequences. Any chief executive who accepts a compensation package that so singles him or herself out from everyone else in the company is not a leader. Leadership is about conveying signals that engage other people in the company. How many leaders are left among America’s large enterprises? There is an Israeli expression that a fish rots from the head down. So too does an enterprise.

Many economists and journalists see the CEO as the be-all and end-all of corporate success. The worst CEOs believe it. They thus allow themselves to be paid accordingly to “shareholder value”, which is a fancy term for increases in the price of a company’s stock.

There are two basic ways to increase the price of the stock: by exploring and by exploiting. Explorer companies achieve this by doing better research, making improved products, and offering superior service. This is hard work, and it takes time. Exploiter companies have it easier: they depreciate the brand, cut investments in research, confuse the customers with bamboozle pricing, and stay as close as possible to the letter of the law while lobbying politicians to reduce its level. These behaviors can raise the price of the stock long enough for the executives to cash in their bonuses and run, as have so many in the large American companies.

It’s typical management professor talk, but the point that he makes that CEOS are way too often part of the problem and not part of the future or solutions is true.  They are still way over compensated for wrecking companies.

So, here’s a suggestion from the NYT: Cleopatra’s Guide to Good Governance.  Hey, I’m willing to look at Cleopatra as a role model.  Cleopatra as the ultimate central banker?

Egypt’s economic affairs were dismal when Cleopatra ascended to the throne. She devalued the currency by a third. She issued no gold and critically lowered the value of her kingdom’s silver. And she ushered in a great innovation: she introduced coins of various denominations. In an early prefiguring of paper currency, the markings rather than the metal content determined their value. A coin might feel light in the hand, but if Cleopatra said it was worth 80 drachmae, it was worth 80 drachmae. The arrangement was both lucrative to her and encouraged an export-driven economy.

Oh, well, back to the present and our central banker. I’m not sure if you caught the 60 Minutes segment on Ben Bernanke, but if you didn’t, here’s the transcript. You will also find taped interviews at the site.  Here’s Bernanke’s take on employment.

Chairman Ben Bernanke: The unemployment rate is just not going down. Unemployment is just about the same as it was in mid-2009, when the economy started growing. So, that’s a major concern. And it looks that at current rates, that it may take some years before the unemployment rate is back down to more normal levels.

Scott Pelley: We lost about eight million jobs from the peak. And I wonder how many years you think it will be before we get all those jobs back?

Bernanke: Well, you’re absolutely right. Between the peak and the end of last year, we lost eight and a half million jobs. We’ve only gotten about a million of them back so far. And that doesn’t even account the new people coming into the labor force. At the rate we’re going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say five or six percent.

Four or five years. And Bernanke told “60 Minutes” something else that makes that even more painful.

Bernanke: The other aspect of the unemployment rate that really concerns me is that more than 40 percent of the unemployed have been unemployed for six months or more. And that’s unusually high. And people who are unemployed for such a long time, their skills erode. Their attachment to the labor force diminishes and it may be a very, very long time before they find themselves back in a normal working position.

Bernanke seems to be about the only person within the beltway who cares about the level of  unemployment  This bit from Bloomberg indicates he’s willing to take more steps because he believes that those in charge of fiscal policy will not do the right thing.

Bernanke and other Fed officials have defended the central bank’s announcement that it will purchase $75 billion in Treasury securities a month through June to prop up a recovery so weak that only 39,000 jobs were created in November. The unemployment rate last month rose to 9.8 percent, the highest level since April, the Labor Department said on Dec. 3, three days after the Bernanke interview.

The economy, which grew 2.5 percent in the third quarter, is so weak that Bernanke said growth could fizzle out without support. “It’s very close to the border,” he said. “It takes about 2.5 percent growth just to keep unemployment stable and that’s about what we’re getting. We’re not very far from the level where the economy is not self-sustaining.”

I’m not sure people know exactly how odd it is for a FED chair to say this and what it means to say that the “we’re not very far from a level where the economy is not self-sustaining”, but let me tell you it’s rare and alarming. Washington is playing parlor games and our lives are their pinatas.

In some ways it seems we’re very much on the verge of a much worse recession because things are no longer emanating from the financial markets.

Two Republicans, Tennessee Senator Bob Corker and Indiana Representative Mike Pence, last month proposed removing the Fed’s maximum employment mandate to focus the central bank on stable prices alone. Corker plans to introduce such legislation next year.

Bernanke said fears of inflation are “overstated” and that keeping consumer prices under control isn’t a diminished priority for the Fed.

The rate of inflation has slowed this year, with the personal consumption expenditures index, excluding food and energy, rising at a 0.9 percent annual pace in October, the slowest in 50 years. Including all items, the index increased 1.3 percent.

Without action by the central bank, the economy might have tipped into a period of deflation, or a prolonged drop in prices, Bernanke said.

I cannot emphasize enough that no matter what these people say to appeal to your inner demons, there is no problem with inflation and we desperately need stimulus for demand.  Sustaining tax cuts at the very high levels will not do it because rich people simply do not spend money like poor people do.  Additionally, more foreclosures will not help the housing market and loss of jobs will not help the economies of states.  I cannot believe that after so much information coming from the last 60 years that we still have to have these conversations.

Here’s an interesting piece from Medical Daily: People with a university degree fear death less than those at a lower literacy level.  Since I’m not the psychologist on board at Sky Dancing.  I’ll leave the explanations to Dr. BostonBoomer.

People with a university degree fear death less than those at a lower literacy level. In addition, fear of death is most common among women than men, which affects their children’s perception of death. In fact, 76% of children that report fear of death is due to their mothers avoiding the topic. Additionally, more of these children fear early death and adopt unsuitable approaches when it comes to deal with death.

I’m not sure you want to hear this news from NPR, but it is what it is:  Gingrich: A Run For President Is ‘Doable’.

Former House Speaker Newt Gingrich says he’s more inclined to run for president in 2012 than not to make a bid.

Gingrich says he probably won’t make a decision until late February or early March. But he says that talking to friends and thinking about such an undertaking have made him more inclined to believe that “it’s doable.”

We are so f’d.

What’s on your reading and blogging list this morning?