The horizon is not so far as we can see, but as far as we can imagine

Month: November 2010 Page 1 of 3


I don’t normally write about leadership.  Somehow it’s become a niche subject: either the subject of some banal business book, or discussed by the military.  It seems remote from politics or even economics because we live in an elite consensus society, where leadership is rare because the price of stepping out of the consensus can be ostracism from the elite.

Let’s start with a story.  Once upon a time a friend and I were working for the same multinational, dealing with the same people.  One day she complained to me.  “Ian,” she said.  “Fred is so persnickitty, such a fop.  Thelma is so lazy.   Our boss is so disorganized.”  On and on she went, capping with “I can never get help!”

I was floored.  Slowly I replied.  “You know, I don’t see any of those people that way.  I think that Fred is really precise and does very good detailed work.  I think Thelma is friendly and kind.  I think our boss is one of the best bosses I’ve ever had, who always listens to my concerns, lets me run and takes care of his employees.  And,” I continued, “when I ask for help from any of them, I always get it.”

I thought about that some more over the years to come, and I came to a conclusion about it.

One very simple method of leadership is to find something, some things, to admire about people.  Most people live in a sea of negativity.  Their spouse is on their case, their kids think they’re foggies, their co-workers always want more, their bosses never speak to them except to complain.

If you admire someone, if you think they’re great, that’s something they may not get from anyone else in their life.  And they will do almost anything to keep that.

I think back to the teachers I did the best work for.  They weren’t the ones who thought I was lazy waste of space. They were the ones who thought I was smart and insightful and had a great future (hah!)  Mr. Frazer, Mr. Newell, Mr Skinner, a couple others.  I didn’t turn in bad work to them.  I didn’t quit a race without trying hard for my coach.  Why?  Because I treasured the fact that they thought highly of me.  I didn’t want to lose that.

This isn’t all there is to leadership, of course, there’s a lot more.  You have to draw people into a dream, give them space, make any victories their victories, while taking the responsibility for the losses.  You have to hold them to a high standard, which is an implicit compliment since it indicates you think they can meet that standard.  You have to praise them, you have to protect them, you have to take blows for them and you have to treat them well.  The hardships they endure, you must endure (one of my rules was that if I asked someone else to stay late at work, I stayed late as well, for example.)

When FDR was president he spoke to Americans on the radio regularly.  And he didn’t condescend.  He acted as if they were adults who could be trusted to understand complicated subjects and who could be trusted to do the right thing.  Because he included them, because he gave them the compliment of assuming they would do the right thing, by and large they did.

Most people live up, or down, to your expectations of them.  Live with them, for them, include them in the dream, give them credit, see the best in them, not the worst, and they will march into the gates of hell, not for you, but with you.

Off to Vegas tomorrow

Vacation time.  By my count, my first actual vacation in over 20 years (ie. I’m not adding a few days on to what is essentially a business trip.)  Will see how the backscatter machines/patdowns go.  If they go too badly this may be the last time I visit the US unless I’m being paid very well to do so.

If you’re in Vegas, and you’d like to get together, drop me a note at iwelsh-at-ianwelsh-dot-net.  I’ll be there for about a week.

Posting may or may not be light, hard to say.

The real reason for grope-athon and porn-scanners

Matt Stoller notes:

Why does flying sucks more today? Rich people fly in private jets, so the powerful no longer hear complaints from their friends.

This comes back to what I wrote before, but with respect to public schools and the Iraq war.  If important people don’t have skin in the game, things don’t get fixed and the quality of whatever experience they don’t experience doesn’t get better.  Everyone, most especially the rich and powerful, must fly on the same planes, must be subject to the draft, must have their kids go to the same schools and so on.  Only then will the general quality be high.

To the extent possible the rich have created an entire alternative structure: they don’t fly on the same planes, their kids don’t go to the same schools, they don’t fight in the wars, they have hotels that you will never enter (can you afford 50K a night?)  They live in a system parallel to that of ordinary people.

The rich must never, ever, be allowed to opt out of the shared social and economic experience.  Fly first class?  Sure, but not on private jets.   Drive in a limo?  Sure, but not fly in a helicopter avoiding congestion.  Get a room to themselves in the hospital?  Sure, but not jump the queue for treatment in front of anyone.

As soon as you let money allow people to avoid the queue entirely, those people with power will not care about what is happening to ordinary people anymore.

This is true of general inequality as well.  Why don’t the rich take the decline of the middle class seriously?  Why aren’t they extending UI?  Why do they yawn about the current economic crisis?  Why did they do nothing to stop it from happening when any idiot could see it coming?

Because it’s not their experience.  For over 30 years they have gotten rich, rich, rich!  Everyone they know who matters to them — their friends, their spouses, their mistresses and boy-toys, their children — are doing not “just fine” but gangbusters!  And after the 2008 financial collapse, their wealth has rebounded and corporate profits are at near all-time highs.

Life is good, baby!  There aren’t any real problems.  Not for the rich.  And, as George Bush so memorably said, “who cares what you think?”

The porno-scanners are making important people rich, and those important people fly on private jets.  So, what exactly is the problem?

I don’t see a problem…

The cost of being cheap

Over at Barry Ritholz’s there’s a discussion of the cost of a business being cheap.  Barry recounts how he used to work for a cheap employer and as a result he sent possible employees who could have earned his employer millions to other companies.  He then asks if others are vindictive bastards like him.

Let me answer.  Hell yes.

Some years ago I worked for a medium sized multinational.  I was an hourly employee, meaning I was supposed to get overtime.  I was in sales contact, I was one of the admin people who marshalled new contracts through the system, contracts which were worth, in a year, no exaggeration, in the 10s of millions of dollars.  Some years in the low 100s.

At the time I was handling almost twice the normal case-load.  So I was working a lot of overtime.  I was hauled into my manager’s office and told I had to stop claiming so much overtime.  I pointed out my case load.  My manager noted two other people with about the same case load: “they aren’t claiming all this overtime.”

Me: “they are in before me and they leave after me. They may not be claiming it, but they are working it.”

Boss: “it doesn’t matter, I’m getting complaints from upper management.”

So, for a few weeks, I worked to rule.  I worked 37.5 hours a week, then went home.  The problem with that approach was that when things went wrong, the person the customers screamed at and complained about was me. So eventually, I gave in.  I worked the hours, and I didn’t charge for them.

But I never, ever, forgot.  And in perfectly legal ways, I cost the company millions of dollars of business over the rest of my career there.  After all, I was in daily, hell, hourly, contact with the people who decided whether to send my company business.  And I never, ever, pushed for business to come to my employer unless it was clear cut in the best interest of my contacts and their customers.  If there were any legitimate negatives to sending business there, I gave them.

And because my contacts trusted me, because I always played fair by them, they listened.

Millions of dollars of business, because my employers were too cheap to pay me what would have probably amounted to two or three thousand dollars of overtime.

Because, yes, I am a vindictive son-of-a-bitch when I am treated unfairly.  If I work the hours, you will pay me for them. If you choose not to, you WILL pay a price for it, one way or the other.  (On the other hand, if you treat me well, I will work my guts out for you.  One place had to replace me with 2 1/2 people when I left.)

I discussed with this with a friend who had been a senior executive once, his response was instructive.  “Look Ian, even if they knew, they wouldn’t have really cared. ”

Me: “What, I’m costing them millions!”

Executive: “So?  They figure that as much as they are screwing their employees and causing unhappy employees to cost them money, so is everyone else in the business, so it all evens out.”

Me: “But that means someone who treated their employees well would have a competitive advantage.”

Him: “They don’t think that way.  Screwing employees is how they made their way up the ranks to where they are.”

Me: “that doesn’t make sense.”

Him: “Nope, but it’s true.”

Then, I went to work for our American subsidiary for a few weeks.  And they were far, far worse.

But that’s another story…

Wow, A Sherrif Who Does His Goddamn Job Even Against Banks

I’m flabbergasted.  How they hell did this man slip through the system?

Cook County Sheriff Tom Dart said he is only ordering evictions to resume because county prosecutors told him that he was legally bound to carry out foreclosure eviction orders signed by a judge.

“For the people who have been involved with this and think now that because the (Cook County) State’s Attorney’s office has ordered me to go ahead with the evictions that everything’s fine . . . No, we are going to be looking at you for criminal violations,” Dart said. “You may have got through one storm now, the other one is coming.”

Dart singled out Bank of America, JP Morgan Chase and GMAC/Ally Financial last month for problems with eviction notices. He said Friday that investigators continue to find problems with bank employees signing off on foreclosure documents they haven’t read, although he did not single out individual companies.

“When we asked a month ago . . . send me an affidavit to say that everything was done legally, not one organization, law firm handling these cases, not one of them sent in one document,” Dart said. “Not one, and they had over a month to do it.”…

I suppose I should point out that this is what EVERY Sherrif’s office in the US should be doing.  We know fraud is widespread, they should not just serve.

And I’ll note that this may well boomerang back on corrupt and/or lazy judges.  Investigations are bound to turn up that they didn’t do their jobs.

Labor accepting permanent defeat?

This is exactly what you MUST never do as a union:

Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.

In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.

Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.

Doing this splits the union.  Solidarity is the first rule of unions, if you sell anyone down the river, you weaken yourself fatally.

On a larger scale, the destruction of unions remains job of the oligarchy, especially that part of the oligarchy which prefers Republicans to Democrats.  Why?

  • Because union members vote Democratic, even if they are part of a demographic which normally vote Republican.
  • Because the oligarchy’s overall goal is to crush wages and benefits, both to pay for their bailouts and as a permanent, long-running goal. They do not really believe that domestic consumer demand is necessary to their own prosperity, and prefer workers who are in permanent debt-slavery.  For a generation and a half now they have made most of their money through leveraged financial games, asset bubbles and by offshoring and outsourcing jobs.  American workers are nothing to them, less than nothing.

Update: My friend Matt Stoller has up his first blog post in about 2 years, on debt-peonage.  A good read and some interesting information on where the phrase “the man” originally came from.  I’m sad Grayson lost, but it’s nice that Matt can write again.

Wiping out property law and destroying counties to save the banks


There are rapidly emerging signs the Obama Administration and Congress may be actively, quickly and covertly working furiously on a plan to retroactively legitimize and ratify the shoddy, fraudulent and non-conforming conduct by MERS on literally millions of mortgages.

From CNBC:

When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

Just to make clear the implications of this craven action, the White House and Congress are conspiring to give a get out of jail free bailout card to the biggest banks and finance companies in the country to cover up and mask their illegal behavior and behavior that did not conform with state, county and local laws throughout the United States. On at least sixty (60%) percent of the existing mortgages in America.

There are dozens of implications to individuals and both private and public entities. At a root minimum, it will likely decimate, if not bankrupt, most counties in every state of the union.

If courts rule against MERS, the damage could be catastrophic. Here’s how the AP tallies up the potential damage:

Assuming each mortgage it tracks had been resold, and re-recorded, just once, MERS would have saved the industry $2.4 billion in recording costs, R.K. Arnold, the firm’s chief executive officer, testified in 2009. It’s not unusual for a mortgage to be resold a dozen times or more.

The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.

The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.

Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower.

Why would the Obama Administration and Congress be doing this? Because the foreclosure fraud suits and other challenges to the mass production slice, dice and securitize lifestyle on the American finance sector, the very same activity that wrecked the economy and put the nation in the depression it is either still in, or barely recovering from, depending on your point of view, have left the root balance sheets and stability of the largest financial institutions on the wrong side of the credibility and, likely, the legal auditory line. And that affects not only our economy, but that of the world who is all chips in on the American real estate and financial products markets.

You should read the rest. I’ll spell out some of it here: the major banks are bankrupt.  Bankrupt.  Still.  This is a massive giveaway to the banks if it occurs, and it will bankrupt most American counties, permanently, as well as putting record keeping on who owns and owes what not in the hands of a third party, but in the hands of MERS, a creation of the lenders.  Given how the lenders have relentlessly engaged in fraud to try and foreclose on houses they do not have title to, this seems… unwise.

As an aside, Marcy Wheeler (Emptywheel) and BMaz have become two of the better nuts and bolts financial bloggers in the last year.

Oh, and Obama, bought and paid for servant of the banking industry.  Always has been.


No,  I’m not being sarcastic.  I still have little hope for the US, but I am very heartened by what is happening in Europe.  The French actions and now the British students rioting.  It is, ironically, even more hopeful that the British government wants to try a student for attempted murder for throwing a fire extinguisher off the roof.  Next, they’ll be hanging people for stealing chickens.  The massive overreaction and the clear double standard, given the war criminals who ran the British government, none of whom have been prosecuted, is the sort of thing which indicates a loss of legitimacy, a loss of legitimacy which often leads to revolution: peaceful or otherwise.

At this point, my best guess is that when push comes to shove in Europe, the left will actually win in most nations.  They aren’t wimps, they are willing to fight, they are willing to clash hard with the cops and they are willing to directly attack the interests of the ruling class.  Unlike in the US, where the people willing to risk violence are right wingers, in Europe more are on the left wing side.

The economic collapse of the Eurozone, as multiple nations are forced to beggar themselves to bail out bankers and the rich, is similar to what is happening in the US, what is different is that the people in multiple nations are fighting back.  I’m hoping the Irish wake up and tell the Eurocrats to go fuck themselves, that the deal of joining the Euro was “we give up a lot of autonomy for a lot of prosperity” but that if they aren’t getting the prosperity, they want the autonomy back.  Multiple nations should sincerely threaten to go off the Euro. At this point they are getting economically crushed by being on it and forced to pay off banker’s losses, without the advantages of having their own currency. Right now they are going to take the economic hit they would take by going off the Euro, so they might as well do it.

Odds that the Euro doesn’t exist in 10 years are now, in my opinion, more than 50%.  It is not serving the peripheral nations interests, they are being offered a standard of living roughly equivalent to the 50s.  (My Eurocrat friends (you know who you are) will tell me this is unthinkable, and won’t happen.  We’ll see.)

The pendulum, in Europe, is swinging away from the right.  That’s good news.


(Oh, as an aside, who cares whether this sort of thing increases or decreases public opinion?  Public opinion is irrelevant, all that matters is the costs for the elites who make decisions.)

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