• What Congress Should Be Asking Of BP

Congress is performing its requisite role on the nation’s worst environmental disaster. Congressmen from both sides of the political divide attack BP with a certain resolute and earnest energy that plays well for the cameras, and may provide some traction with the folks back home. For the long term, this circus in Washington is actually dropping the ball on behalf of America.

Rep. Bart Stupak (D-Mich.), and Rep. Henry Waxman (D-Beverly Hills), led the charge with repeated accusations and other attempts to extract response from BP’s CEO, Tony Hayward. With his company’s stock trading at about $31, well below half of the high it once enjoyed, Hayward looked and acted lost and confused, as he deflected questions. The optics were also negative as he disavowed any knowledge of events that might have led to the calamity that killed 11 of his employees. Unfortunately for America, he provided nothing that could be used against him in any court of law.

It may be useful for Congress to become educated through these hearings and perhaps oversight bodies will be pressed to actually do their jobs in future, however, the nature of the questions serves little purpose toward ensuring the long term reparations that will inevitably need to be provided to all those who have really incurred losses on the gulf coast.

For purposes of grandstanding, Congress is getting itself stuck in macro details that in effect leave Hayward and his Board of Directors off the hook.

Here is the direction the Congressional questions should take and why:

The most critical element in the management of a corporation is the structure of its executive lines of command.

When a CEO issues instructions, missives, or policies, and re-structures the company, as he or she deems appropriate to implement plans to achieve the company’s mission, the line of command and its “walking papers,” are clearly delineated, stated and evident.

Whether such instructions are in writing or verbal, each senior manager is given direction and parameters. The trickle down process permeates the corporation, and unless there is abject incompetence, even in a quarter of a trillion dollar enterprise like BP, each employee from the CFO to the local technician knows his or her job. Each employee understands the scope of the decisions he or she can make.

This may sound obvious, however Congress it ignoring this critical reality as it discharges indignant shame toward BP. Stupak and his committee should delve into Tony Hayward’s decision and policy distribution process. The sub-committee should question how Hayward has actualized his leadership of one of the world’s largest corporations. Congress should pull evidence on how and how much responsibility has been delegated to each executive, and how the process is in turn pushed down the various lines of command.

With such facts in hand, the legal process can place responsibility on specific individuals who will not be able to pull a “Tony-Hayward-side-step” once the details are collected. If there has been willful negligence or worse, the specific details pertaining to the chain of command will become critical to extracting cash and compensation - through legal means. Knowledge on the decision process will provide Congress much clout that it currently doesn’t have. The information will provide legal recourse.

Congress will also need to make sure that along the path of assigning blame to specific employees, it doesn’t make the mistake of destroying a whole company. In most large corporations there are some bad apples. Even if the rot goes to the very top of the company including its Board of Directors, this rarely means the whole company is blamable or culpable.

Congress should take care that it does not destroy the world’s fourth largest refiner. There are countries like China waiting on the sidelines who would welcome a “fire sale” on BP’s assets, and who would welcome overnight expansion into the Gulf’s oil and gas reserves. Congressional and White House rhetoric should temper itself, and act with a little more command of common sense.

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• Myths Of Debt To Be Corrected For 2009

The year 2008 brought a rude awakening to a population enthralled by a bottomless availability of cash. Mesmerized into debt accumulation we now wonder how we could possibly have overdone it.

As we launch into a new year, it might bode well to be reminded of some of the myths we enjoyed so much these past two decades.

• Debt is your key to achieving the lifestyle you deserve.
This well-oiled refrain was repeated ad nauseum throughout the past quarter century, to the point where the affirmation morphed into an accepted assertion. I borrow, I spend, and therefore I am. The Fed, Congress and the White House have historically presented a united front to convince taxpayers that they should seize all opportunities to consume. It has been the patriotic duty of all citizens to consume impulsively and with abandon, taking absolute custody of the title Consumer.
• Spend yourself into economic recovery.
It appears that all media has bought into this myth. Abundance of noise from economists and pundits has been particularly effective for too long on this one. The economy needs you. Business needs you. There are bonuses to be paid out at the top that will trickle down and stimulate all corners of your economy. Your guilt will get you if you don’t spend everything you can borrow. Forget saving for a rainy day. Forget budgeting, and absolutely reject the concept of finding balance between funding your needs and setting aside money for your future unanticipated emergencies. You don’t want this recession to devolve into a depression, do you?
• The Debt you are drowning in is not your fault.
How could you possibly have known that buying your first home for $500,000 with nothing down and a variable rate mortgage would launch a perfect storm through your future, ravaging your state of mind?
• Wall Street, The Fed, and the World Bank know what they’re doing and they know best what is good for you.
This one requires little delineation here. Dissecting it might even be a little too depressing, and might dissipate the joy of a brand new year. We'll save it for a future article.
• Becoming highly leveraged is a right of passage into nether regions of society.
Leverage’s modern redefinition is imbued with notions of achievement beyond simple debt. It embodies an ultra-modern conversion of water to wine. Wall Street was able to stretch the boundaries of debt with the creation of derivatives, those unfathomable, little understood but outrageously leveraged vehicles that were so effective in creating billion dollar bonuses. With government advocacy, the banking industry distended debt to the extreme boundaries of leverage, inventing unfathomably creative debt instruments hiding behind ambiguous terms such as "derivatives." The beauty of this myth rests in its apparent ability to have magically enchanted the top of the economic intellectual food-chain.
• You should not wait until tomorrow to acquire what you can get today through debt.
Instant gratification has become a firmly entrenched affliction. Capricious satisfaction of wants has transplanted patient and planned fulfillment of needs or considerations for the future. It is almost as if there has been a very deep shift across a broad swath of consciousness, and now the thrill of the chase no longer provides the joy it once did. Have indulgence and consumption become the voyage?

Intuitively we have all known for over a generation that we were living a great paradox. Lifestyles were better than ever, yet in the core of our beings, we all felt an unmistakable angst. Since the mid eighties, each one of us sensed that very conflicting dichotomy between what we were doing, and what we knew was right. We were over-borrowing ourselves into the highest standard of living known to any society in history. Political leadership cynically applauded.

2008 slapped us into acknowledging that our intuitions were right, and that long-term health of an economy requires savings and also requires investments. It has been years since it made any sense to leave money in a savings account to collect interest. Inflation deducted from the interest left a shrunk balance at year-end. Bernanke’s interest rate cut to a half percent, will have little impact on borrowers’ access to loans. Panic set-in, and attitude shift will be slow process. Congress and The Fed should revisit the government's interest rate policies. Taxpayers should be looking forward to making money on their "savings," … in the bank.

We are thinkers, inventors, creators, producers, nurturers, and spiritual beings, who can enjoy a material abundance we ourselves define and frame. We decide the nature and scope of our intellectual and spiritual sufficiency. Rather than giving in to external strafing of our decision making, it is high time each of us gave a little more room to our own individual Intuitive Knowers, abating the consequences of our overwhelming egos and intellects. Human satisfaction and progress should not be measured in GNP growth, or intoxicating accumulation of possessions. The voyage has become exhausting. It is time to sweep aside the myths. It is time for living with less anguish, and acquiescing to the truly profound joys life offers far from the sirens of debt.

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• WHY OBAMA WILL WIN, BUT CAN’T DELIVER

McCain embarrassingly strains at the altar of speech giving, the teleprompter, like a schoolboy forced to stand at the front of the class to explain how he spent his weekend with the family. Cut to Obama, giving a speech, anywhere, doesn’t matter where, and the contrast in presentation is peculiar given that both are running for arguably the most important office in the world. Presentation shouldn’t matter but it does. McCain’s lack of presence makes him seem weak and appear out of his element. That doesn’t mean he is weak, but he is not helping his image in the public’s consciousness.

Even in his attempts to deliver emphatic points, McCain can’t muster conviction. Middle America is feeling uncomfortable on too many fronts and that discomfiture expects some appearance of conviction in a candidate. Only conviction will lead the American taxpayer out of the economic trench currently slowing progress. Only conviction will chart a new course away from the path that for the past eight years has been led by what has become the most despised resident of the White House in the history of that seat of power.

America needs its sense of confidence back. New blood, new thinking, and new ideas will forge a road back to that feeling of confidence. Obama has been able to present such a dream. Real or not, he is the new hip kid on the block who becomes vested with the hope of a nation urgently looking for change. Deep change. Obama becomes anointed as the savior who will rebuild the nation’s current economic mess and international stature.

America is a leader, and America makes its leaders. It dreams them up. They are a product of America’s illusions and aspirations as it goes about its business of working, raising families, and enjoying or stressing about life. America injects the White House with its expectations. America also forgets that the leaders it chooses are human, often with more frailties than the average American, and the expectations are often misplaced. The last two Presidents are examples to remember. Clinton had the potential to become one of the country’s greatest, yet he lacked a profound sense of history and his frailties rendered his Presidency impotent. Bush contrasted Clinton’s intelligence and appeared to be “everyman,” presenting a clean contrast that would not soil the stature of the Oval Office. Bush rapidly devastated both the image and the economy of the country with a lack of understanding on too many elements to be delineated here. Nevertheless, on he marched with confidence that his beliefs, fervor, and convictions were absolute, and that debt financing was his earned capital to be spent. This generation’s great-great grandchildren will be paying for that earned capital.

Obama is the only candidate in whom America can inject an expectation of a refurbished sense of glory. He is a blank canvas that America needs to inject with its anxious anticipation of a positive tomorrow. The actualization of Obama fulfilling expectations, his own or America’s, is an unlikely eventuality. He has set his own bar impossibly low, since he has refrained from making firm and definitive commitments, and has a record of abstaining from making difficult decisions in his short life as a sitting politician. Obama’s backpedaling on Iraq, for example, and announcing that he doesn’t plan on rushing out of the war, further blurs the lines that differentiate him from the competition. We understand. He's running for office and needs to stay neutral and polished, ... however, where's the passion for something specific? Where are the principles?

Bush has pushed America into a corner from whence it expects to be led toward lighter days. The new and overwhelming expectations are foisted on another human being with all the limitations and baggage we would rather not notice. As always, the average middle income tax payer will continue to do the heavy lifting. And also as always, in that expectation, America will not be disappointed.

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