wall street reform Archives

Big business has been in the news recently, and that’s not necessarily a good thing. JPMorganChase lost upwards of $3 billion dollars on hedge trades that should not be legal, but that the bank actively lobbied to protect. Hewlett-Packard is laying off 30,000 employees in an attempt to become more competitive, and in a blow to television networks everywhere, Dish Network has developed a DVR that will automatically skip over commercials. Yes, what you just heard was the spinal shiver of a thousand communications executives. From the article:

Ted Harbert, the chairman of NBC Broadcasting, struck a similar note at his network’s presentation on Monday, calling the Dish feature an insult to the television industry. “Just because technology gives you the ability to do something, does that mean you should? Not always,” he said.

An insult? Hardly. Aren’t we supposed to honor creativity and problem solving? That’s what Mitt Romney says. And he’s destroyed leveraged lots of companies.

Two companies stand out at present: Wal-Mart is in the news for nefarious activities (again) and Facebook just went public. But the stock price, which was supposed to soar, didn’t even get as high as your average Michigan tree (they are the right height, you know). Mark Zuckerberg made a bundle. You probably made $1.28. Though to be fair, a problem at Nasdaq might have had something to do with the price, according to this article. We’ll have to wait until Monday for confirmation.

It’s simply not OK for a company to act as Wal-Mart has acted over the years and expect that simple apologies would wipe away the tainted profits. Wal-Mart denied its employees medical insurance coverage by manipulating hours and schedules. It fought against unionization and continued to pay low wages until protests uncovered its hypocrisy. Some managers even locked in the cleaning staff overnight in an attempt to make sure they squeezed every penny from their labor. Now Wal-Mart is accused of bribery and covering up potential crimes in Mexico (and possible the United States, if this story is correct).

These activities are unacceptable. They were unacceptable when Wal-Mart first practiced them and they are unacceptable now, and any 10-year-old would tell you that people should not treat their employees this way. There is no apology that will sway me otherwise. Yes, Wal-Mart’s prices are low, but the store near me in New Jersey is dirty and I get a dirty feeling just walking into its front door. It’s as if I’m giving up some of my self-respect just by shopping there. So I don’t. I know others who feel the same way.

Facebook is another matter. Now that it’s made some people very, very wealthy, it’s going to be more of a prime target than it already has been. I won’t buy anything from Facebook, I don’t take its recommendations when they pop up on my page, and I really don’t like the new layout I’ve been forced to accept. I love my friends, but I don’t respond to their requests for birthdays or games or school pages because I find the Facebook notice that comes with these invitations, the one that says “this application will have access to all of my information” much too intrusive. Perhaps I wasn’t built for social networking. Perhaps I’m too old to appreciate the ease at which Facebook can improve my life. No matter. Facebook will not see a penny from me.

And that’s the real danger isn’t it? Haven’t we been told that Facebook’s value lies in its collected data? Our likes and dislikes, entertainment preferences and group memberships? We have become a world of sharers, but at some point in the not-too-distant future, I can see the backlash. Facebook will go too far (if they haven’t already) and use our information for purposes that will go beyond the pale. The reaction will be swift and intense. Public pressure will force Facebook and/or Congress to scale back its data mining. Facebook will lose the ability to track our movements, and thus its ability to make money. It will have billions of users, but its stock price will be stuck at $16.

When I think of all the advertising and public relations these companies pay for, you’d think they would pay closer attention to their actions. Perhaps they will adjust and thrive. They’ll just have to do it without my money.

Please join the conversation at www.facebook.com/WhereDemocracyLives (for free) and on Twitter @rigrundfest

In the wake of the over two billion dollars lost at JP Morgan Chase, President Obama used his weekly address to call on Congress to fully implement the Wall Street Reforms he recently signed into law, a law that would protect consumers and make Wall Street accountable for their actions.

…We’ve put in place Wall Street reform with smarter, tougher, commonsense rules that serve one primary purpose: to prevent a crisis like that from ever happening again. And yet, for the past two years, too many Republicans in Congress and an army of financial industry lobbyists have actually been waging an all-out battle to delay, defund, and dismantle Wall Street reform.

Recently, we’ve seen why we can’t let that happen. We found out that a big mistake at one of our biggest banks resulted in a two billion dollar loss. While that bank can handle a loss of that size, other banks may not have been able to. And without Wall Street reform, we could have found ourselves with the taxpayers once again on the hook for Wall Street’s mistakes.

That’s why it’s so important that Members of Congress stand on the side of reform, not against it; because we can’t afford to go back to an era of weak regulation and little oversight; where excessive risk-taking on Wall Street and a lack of basic oversight in Washington nearly destroyed our economy. We can’t afford to go back to that brand of ‘you’re-on-your-own’ economics. Not after the American people have worked so hard to come back from this crisis.

We’ve got to keep moving forward.