We live in very difficult times, which continue to produce some frustrating but entertaining actions by people. The month of August 2010 was another busy month of men and women acting poorly and it's my turn to vent my frustration about their actions, behavior, or words. I have my elite eight nominees for Donkey of the Month, so let's get right to them:
Nominee 1: HP's Ex-CEO Hurd
Bit by bit, more of the story seeps out about what lay behind the decision by Hewlett-Packard board's to give Chief Executive Officer Mark Hurd the boot, albeit one stuffed with millions of bucks.
Now it seems there were so many grounds for firing, you have to wonder why he stayed so long and got such a lovely package when he left.
It wasn't just that he had an inappropriate (however nonsexual) relationship with a contractor whose resume as a B- movie actress made her an odd choice to help run company events for HP.
Nor was it merely that Hurd tried to cover up his company-paid dinners and meetings with her by misrepresenting expense reports. Those were the reasons the board gave when it pushed him out the door on Aug. 6.
No, the final straw, anonymous sources close to the board now tell us, was that Hurd settled the woman's sexual harassment complaint without telling the board, thus scuttling a mediation and denying HP investigators material for their sexual-harassment probe.
I'm sorry, but what CEO in his right mind puts himself in a position of getting terminated for such issues. And let's get completely real, a married CEO who's probably working 50-60 hours a week has the time and desire to have an inappropriate but non sexual relationship? I guess there's a first for everything, OR maybe he's using the Bill Clinton definition of a sexual relationship!
Nominee 2: HP's Board of Directors
The fact that directors handed Hurd a package worth an estimated $40 million to $50 million as he left especially galls. The board should have fired him for cause, which would have denied him most of that package, the plaintiff argues, rather persuasively.
Don't we all want to be part of the good old boy club so we can win the lottery as we get fired?
Nominee 3: Totoya Motor Company
Toyota Motor Corp. will recall 1.13 million Corolla and Matrix cars for a flaw U.S. regulators said may cause stalling "at any speed without warning," a setback as the company seeks to regain its reputation for quality.
Toyota, the world's biggest automaker, said yesterday in a statement it will recall the vehicles for the model years 2005 to 2008 in the U.S. and Canada following at least three reported accidents linked to the defect.
The action may raise new questions about Toyota's electronics and adds to record recalls in the past year by the Toyota City, Japan-based company, including more than 8 million vehicles worldwide for flaws related to unintended acceleration. The Corolla is Toyota's best-selling model globally.
It's ironic when the US automakers were on the verge of collapse in 2008, foreign auto makers could have seized the day, but Toyota has done nothing but continually stub it's toe with repeated recalls on various models of cars and trucks, and yet here's another recall. In all this auto industry turmoil Toyota seems to have wasted a golden business opportunity.
Nominee 4: James Altucher, managing director at Formula Capital
One of the many looming financial crises in the United States is the horrendous budget shortfall faced by many states.
James Altucher, managing director at Formula Capital, floats an innovative solution to this problem.
Instead of raising taxes, cutting spending, or going even deeper in debt, Altucher says, states should sell off some assets.
Assets like roads, bridges, state parks, public transportation systems, and universities.
If New Jersey were to sell the New Jersey Turnpike, for example, it would immediately raise tens of billions of dollars, which would radically improve the state's financial health. And a private road operator might do a better job of running the turnpike than the state can.
Is that a crazy, wacko, radical idea?
In the case of roads, transportation, and other infrastructure, no. There's actually plenty of precedent for it. And there's no reason other than convention why city bus and subways systems are publicly run and interstate systems, including airlines, are private.
In the case of universities and state parks? Well, there, the idea is a lot more radical.
I hate when I hear these kinds of ideas for one simple reason: The amount of assets owned by a city or state aren't the reason cities and states are broke. No, it total has to do with a bloated payroll and benefit/pension systems for union employees. Selling assets is a onetime fix that does nothing, absolutely nothing, to address the payroll and pension funding issues that cover the landscape of America. And certain assets shouldn't be in the hands of money making entities because they belong to the public.
Smart people with stupid ideas? Don't we have enough of that in this country already? James, please stick to managing money, we don't need innovative ideas, just leaders/politicians with the backbone to deal with the real issues and manage expenses (payroll and benefits) appropriately.
Surely the first four nominees have acted poorly and deserve recognition for their actions/words, but they didn't make the cut for the final four. It's becoming a trend to find entertainers or celebrities acting poorly and we have two this month that have made the final four:
Nominee 5: Comedian Chris Tucker
Looks like actor Chris Tucker wasn't in a rush to pay his taxes. The motormouth comic owes the IRS a staggering $11.5 million, it was reported yesterday.
A tax lien filed in Los Angeles claims Tucker failed to pay Uncle Sam millions in 2001, 2002 and 2006 and hundreds of thousands more in 2004 and 2005, TMZ reported.
That's on top of $3.6 million the state of California says the 37-year-old owes them.
Reps for Tucker, who was paid $20 million for each of the "Rush Hour" sequels, did not return messages seeking comment.
How does someone making this kind of money with professional money managers and CPAs for hire, and he still owes the Taxman that much money for repetitive years? It's pure comedy and Chris Tucker didn't have to say one thing. Now that's a good act!
Nominee 6: Paris Hilton
But apparently, Paris Hilton has trouble telling the difference between the two.
According to an officer's report, when a little white baggie fell out of the purse Hilton was carrying in Las Vegas Friday, Hilton said that "she had not seen [the bag] but now thought it was gum."
The bag actually contained 0.8 grams of cocaine, according to People magazine, and now the 29-year-old heiress faces felony drug-possession charges, with an Oct. 27 arraignment.
Hilton maintains she didn't put the drugs in the bag. According to the police report, she attested to owning a broken Albuterol pill, Zig Zag wrappers commonly used to smoke marijuana, and $1,300 in cash and credit cards, but said "several cosmetic items inside the purse were not hers."
Hilton's "it wasn't me" line sounds strikingly familiar to a few pouty-faced proclamations she's made before. Below, four more of Hilton's memorable excuses: Again please see: Paris Hilton Can't Tell Drugs From Gum
Paris has a history of these little indiscretions, from sex videos of her and her boyfriend making the public's viewing, to marijuana issues in both South Africa and Corsican, to jail time in CA. It's like watching a live train wreck in slow motion. She's definitely entertaining, it's too bad it has nothing to do with talent.
Nominee 7: Senator Chris Dodd
August 3, 2010 -- Senator Chris Dodd (D-CT) delivered a speech on the floor of the U.S. Senate yesterday urging the support of the Public Safety Employer-Employee Cooperation Act, which would guarantee our nation's fire fighters, law enforcement officers, and emergency medical personnel the right to bargain collectively with their employers.
"The bipartisan Public Safety Employer-Employee Cooperation Act is a critical next step towards fulfilling our commitment to the men and women who keep us safe," said Dodd. "The right to collectively bargain has been proven over time to improve cooperation between employers and employees. This cooperation leads to better, fairer compensation and benefits. It contributes to improved work conditions and safety. And it makes the quality of services better and more efficient for everyone."
The act would require all states to allow police, firefighters and emergency medical personnel to collectively bargain with taxpayers. If they don't create their own system, the federal government will impose one on them.
The union movement sees the act as a first step to getting the power to organize every government employee. As Anna Burger, head of the Change to Win union federation, put it, the union movement wants to "build off the police and firefighters real chance to gain a national collective bargaining law, and create a national collective bargaining standard for all public workers."
The Dodd position is utterly wrong and unfounded. They already have the best collective bargaining tool, which is the ownership of state and local politicians via political contributions and collective union votes. I guess that's not good enough, now they want federal politicians in their back pocket.
The collective bargaining they have enjoyed the past 10 years has only lead to a hostile environment between unions,civic leaders and the public. And it has lead to pay and benefits that dwarf being fair, as suggested by Dodd.
Did Dodd even review his speech after someone else wrote it for him? It's a pile of contradictions and not representative of the way it really works. Chris Dodd--Donkey of the Month? Maybe. Special Interest Kiss Ass of the Month? You be the judge.
Summary: This month we had a wide variety of nominees to consider, but there was one candidate that had several reasons for their nomination that propelled them to the head of this month's Donkey class:
Nominee 8: President Obama
President Obama went to bat today for his old basketball friend from Chicago, Alexi Giannoulias, who is running for his old Senate seat in Illinois.
"Alexi is my friend," Obama said, making a personal pitch from the Palmer House Hotel in Chicago. "I know his character. I know how much he loves this country. I know how committed he is to public service for all the right reasons."
Here's what Obama didn't tell the public about his buddy and his family: More Shenanigans in Illinois Politics
Essentially, the Giannoulias family were owners of a bank where they pulled capital out of the bank for personal reasons, and the bank subsequently was closed by the FDIC in April 2010. Obama's buddy was a senior credit officer for that bank at one point in his life. It seems like such a large conflict of interest, maybe that's why President Obama isn't telling you of these circumstances so he can fill a political seat with any democrat.
President Obama has signed into law a controversial spending bill aimed at saving hundreds of thousands of teacher, police officer and public health worker jobs in states grappling with budget cutbacks in a down economy.
The $26 billion package, which was approved by the House in a largely party-line vote earlier Tuesday, includes $10 billion to keep an estimated 160,000 teachers on the job, and $16 billion to help states meet their Medicaid payments for six months. Democrats say the aid to states could also help keep 150,000 police officers and other workers on payrolls.
"We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe," said President Obama during remarks in the Rose Garden ahead of the vote.
I love the last quote, because nowhere in his remarks did Obama get tough on union pay, unions, and local politicians to deal with their budget issues by taking lower pay and benefits in the future, that the $26 billion is a onetime event. Obama fails to get tough about the reality of the situation: We will have budget short falls next year and the following years, giving states and cities more money does not solve the issues. We are giving federal tax payer dollars to cover the shortfall in state tax payers dollars. That's as stupid as it gets.
No one has to lose a job, all they have to do is give up a part of their pay and benefits and we can all move forward, but none of that common sense was uttered by Obama. Aren't we tired of politicians using the fear factor of children and safety to push their special interest agenda? This should be no surprise since Obama's bread is buttered with unions across the land, he's supporting the minority at the cost of the majority.
The Big Obama LIE:
With the ink of President Obama's signature on the Barney Frank-Chris Dodd financial reform bill barely dry, the next bank bailout already has begun. How can that be, you might ask? Weren't we promised that this "landmark" legislation would end bank bailouts? Weren't we promised that this legislation ushered in a new era of transparency on Wall Street? Could it be that the politicians lied to us? Say it ain't so - but it is.
How can I make such a preposterous claim, you might ask? What evidence do I have to support my assertion? Well, I reply, look no further than the second-quarter earnings report of the Wall Street titan J.P. Morgan Chase. You will, however, have to dig deep into the report, into the financial supplement on Page 32, where the company reports information on the credit quality of its loan portfolio. At the bottom of the page in footnote (a), you will learn of more than $12 billion in non-accrual loans (read: the borrower ain't gonna pay) made by the bank but that the bank does not consider to be "nonperforming."
Why not, you might ask? There in footnote (a) is your answer and prima facie evidence of the next bank bailout. These bad loans are insured by U.S. government agencies. Which agencies, you ask? So do I, because the bank doesn't identify them. But the most likely culprit is the Federal Housing Administration (FHA), which insures residential mortgages.
Of course, it is unfair to single out J.P. Morgan Chase. So take a look at the second-quarter earnings report of Bank of America. There, on Page 40 of its supplemental information, is a line item "Federal Housing Administration insured loans past due 90 days or more and still accruing," showing a balance of more than $15 billion. Why are these loans not considered to be "nonperforming"? The answer is simple: Bank of America plans to collect from the FHA.
Likewise for Wells Fargo. On Page 33 of its supplemental information is a footnote saying that its "90-plus days past due and still accruing" line item "excludes GNMA [Ginnie Mae] and similar loans whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs." By comparing the reported amount with the amount from its Y9C form, which reports basic financial information to the Federal Reserve, I estimate the exposure at more than $30 billion.
If this brings to mind the backdoor bailout of Wall Street banks by AIG, it should. At just these three big banks, the taxpayers are on the hook for almost $60 billion in bailout money. This is yet another way to funnel our taxpayer dollars from Main Street into the banks on Wall Street. So the next time you hear Mr. Obama, Sen. Dodd or Rep. Frank tell us how they have "ended bank bailouts," remember that old comment from Yogi Berra, "This is like deja vu all over again." Only this time, the conduit is not AIG, it's the FHA.
That's right folks, the government is back dooring the next great too-big-to-fail banking move. And let's remember this is only 3 of the largest institutions in the United States. The number for the entire banking system is much larger. All we've done is move the issue from Freddie and Fannie to the FHA. We haven't solved the "too-big-to-fail" one bit because the FHA will take the next big loss in the near future. That's another sweet deal for the big banks!
I guess it's 3 strikes and you're out. First, Obama supported a buddy for political office whose family has aided in the failure of a banking institution, and how does that reflect the public's best interest. Second, he's spending federal tax payer dollars on state and city pay for union employees, and that math is as dumb as it gets. And lastly is the Big Lie about too big to fail via the FHAs guarantee of loans that eventually will go bad, and more tax payer money will go essentially to support big banks. None of these decisions seem right or healthy for the greater good of the majority of Americans.
It saddens me to say, but absolutely, my Donkey of the Month for August 2010 is President Obama. It's well deserved, unfortunately for us all.
Hope all is well.