Laws and Moral Obligations

Just because there are no laws about certain acts, it should not be interpreted to be a free-for-all, do as you please, wild-wild-west playground where the strong and the quick are allowed to prey on the less nimble and the weak.

Laws, rules and regulations cannot be (and we should not expect it to be) so comprehensive that it fully protects against every possible scam or scheme concocted by some clever guy who knows the rules and the loopholes.  Clearly, any rule that is comprehensive and complete would be so voluminous that it would be too costly for individuals and businesses to keep tab of and to adhere to.  It would be equally costly for the government to ensure compliance.

Even the Ten Commandments are merely broad, basic tenets to live by. “Thou shalt not kill” does not prescribe the ways that one can commit murder.  It wasn’t and it shouldn’t be necessary.  The intent is clear and we are expected guided by our conscience, our inner moral selves.

Where the law is silent, the unwritten moral code must come into play.  The question that we must always ask of ourselves is: “Is it morally correct to do this?”  It is hard to codify morals.  Even so, it is our duty to ask that question and apply the standard of moral that is appropriate, acceptable and expected of us.  The more power we exercise over others and the more our actions impact the lives of others, the higher that moral standard becomes.

The image of America and Americans in the eyes of the world suffers when, as a result of our actions (or inactions), a global crisis ensues.  Our struggle against terrorism will fail if the world perceives us to be worshippers of greed and gold, ready to sacrifice the well being of others for personal gains.  Capitalism without morals erodes the very foundation of our country, our unity, our strength. 

The founding fathers of the United States of America, in crafting the Constitution, began it with a short preamble that is just as important, if not more so than all the articles of the constitution that follows it. 

“We the People of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defence, promote the general welfare and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United Sates of America”. 

It is an emphatic summary of the overarching goals of the Constitution, the law of the land.  It underscores the moral objectives behind each article of the Constitution.  It brings out the need to apply the ‘spirit of the law’ – captured in the preamble itself - where the ‘word of the law’ is absent or silent on a particular issue. 

The success of America on the world’s stage stems from its willingness and ability to think and act for the common good of everyone; its generosity when calamities befall others; and its willingness to stand up and fight for freedom and the basic rights of ALL people, as if we are ONE people. 

When we look back at history, the defining moments of greatness and success are always associated with what one has done to establish justice… promote the general welfare of all people… and secure the blessings of liberty to ourselves and our posterity.  It is not “all about ME” and it certainly is not all about the millions in profits and bonuses that some would brag about. 

The success of an individual is measured not by his/her wealth but by his/her legacy of deeds that has benefitted others.  We can inherit wealth but we cannot inherit greatness. 

The goodness of our actions is not defined by whether it is legal but by whether it is moral.

Worst Case Scenarios

The best CEOs in the world – whether they run multinational corporations or small, growing businesses – are those who possess, among other traits, the ability to understand what the ‘worst case scenarios’ could be for their businesses and they keep a keen eye over those risks and exposures.  Like a hawk watching over its prey, they’ll swoop in with lightning speed and remove the threat preemptively. 

Sounds like paranoia?  Sure, but that is what it takes to successfully run a company and prevent the business from being overtaken by the competition and the ever-changing business landscape.  In almost every analysis of failed or failing businesses, the result will inevitably show that the managers and executives had taken their eyes off the risks. 

Everyday, businesses (and investors) take risk and they expect to be rewarded for doing so.  Risks are a normal part of business – whether it is in the form of new investments (assets, manufacturing plants and equipment) or inventory (stocking up ahead of the holiday season) or in granting credit (facilitating customer purchases), there are risks.  However, service and product pricing can only assume that there will be certain reasonable risks – otherwise, few people will be able to afford to buy the service or product.   The impact of a ‘worst case scenario’ (and varying degrees of that) must therefore be evaluated and avoided (where possible) or hedged against where the likelihood of it occurring is more probable than not.

Consider the car-manufacturing business.  For decades, fuel costs were low (some might even remember when a gallon of gas cost less than a bottle of Coke) and manufacturers had no worries about what could happen to their business model if the cost of gas doubled or tripled.  Despite the Clean Air Act of 1963 and the public’s support of the electric car, manufacturers that had leased fully working production models to the public removed them from the market.  They could not and would not imagine that the ‘worst case scenario’ would happen – that gas prices could go so high so quickly. 

When gas prices in the US started its fast track upwards and broke the $4 per gallon mark in the summer of 2008, gas guzzling SUVs and fancy big cars weren’t selling anymore and a paradigm shift occurred.  Hybrids cars went from being a fashion item to being a necessity and the return of the electric car became inevitable, sending those same auto-manufacturers scrambling back to their drawing board to come up with a product. 

Just as suddenly, automakers were faced with a credit crunch (thanks to the near collapse of the financial markets due to property speculation, sub-prime mortgages and collateralized debt obligations) at a time where declining sales resulted in a burgeoning inventory of unsold units on the dealers lots all around the country.  To make the whole thing worse, an increasing burden of pension obligations began to appear on their books (thanks to new financial reporting regulations) and forced those that were ill prepared or undercapitalized to file for bankruptcy protection.  The ‘worst case scenarios’ that they did not or would not permit themselves to worry about became a reality.  Lesson learned: one can only put off dealing with problems for so long - they will not go away and the consequences can and will likely become increasingly severe the longer we hold out.

The age-old adage “don’t put all your eggs in one basked” pretty much sums up what business need to be doing to stay ahead of the ‘worst case scenario’.   If and when the ‘worst case scenario’ happens, the business must not be found wanting.

Even in our personal lives, we need to always have an ‘exit strategy’ – just so that if ever the ‘worst case scenario’ happens, we know where we’ll end up and we have a ‘Plan-B’ that we can put into action. 

In learning how to ski, what stuck with me the most was the instruction I received on how to fall without incurring avoidable injuries and how to slow the fall or the slide down a slope and to get up and get going again. 

Parents have a tendency to be overly protective of their children.  Instead of teaching them how to anticipate problems and to cope in the event that bad and undesirable events took place, many parents do everything they can to put their child into ‘safe’ spaces so that their young would never have to deal with the disappointments in life.  In reality, they are only trying to spare themselves of the heartache and pain of ever seeing their own flesh and blood in a bad spot. 

My parents did not have the means or luxury of weaving protective cocoons around their children so they taught us the best way to cope, to fill our bellies when the rice jar was running low, to spice up the curry when there’s little to go with the rice on the table.  Although illiterate themselves, they taught us to study hard so we could have a better life than they did.  We learned what the ‘worst case scenarios’ could be and we learned enough to steer clear from them. 

When you have only one egg in the basket, you’ll quickly learn never to let the basket fall.  And if it should fall, you have done everything you could to keep the floor clean so you can still make a meal out of the broken egg.

Healthcare Matters

A week ago, I was going through my files to find a form I needed in order to fax a prescription over to an online pharmacy when I stumbled upon a stack of monthly health insurance bills starting in May 2001 when I first obtained an Individual HMO plan with Empire Blue Cross Blue Shield.  I became self-employed at about that time. 

Before I go further, it is important for me to state that I am a healthy individual.  I don’t smoke and I don’t drink, except for maybe a glass of wine about once a week.  I live a healthy lifestyle, I am physically active and I don’t consume sweetened beverages and I avoid foods that are loaded with sugar.  Apart from the seasonal allergies I get in Spring, I am hardly ever sick (my health records will attest to that) and the only times I have ever been hospitalized was once when I broke an arm back when I was a young 7 year old and a second time when I had my appendix taken out when I was still in my teens.  I probably see my Primary Care physician once a year when I have an annual physical check-up to be sure I’m doing OK and nothing is out of the ordinary.

That first month back in May 2001, my premium was $337.65 which worked out to be $4,051.80 per year.  I flipped over the stack of bills to August 2006 – the last month for which I remained on that plan - and the premium for that same coverage had gone up to $616.82 or an annualized $7,401.84, a whopping 183% of what I was paying back in May 2001.

Out of curiosity, I went online to get a quote for the same plan today and the premium has shot up to $1,549.30 a month or $18,591.60 annualized.  That works out to 251% of what I paid back in 2006 (less than 4 years ago) or 459% of what I paid back in 2001.

If the premiums keep increasing at that pace, the monthly premium for an Individual HMO plan would cost about $7,800 in another 10 years time when I will qualify Medicare.  I know I can’t afford that in-between period – I don’t think any self-employed or unemployed individual can.

As unemployment soared and as the duration of people staying unemployed increased with the latest recession, it has become abundantly clear that an employment-linked health insurance is not the solution.  COBRA has its limitations and is more costly for the individual as the former employer no longer picks up any part of the premium.

Even if one is fortunate enough to remain employed or is able to get a new job thanks to the job stimulus bill that was recently passed, rising health insurance premiums would force employers to shift more of the burden of healthcare plans over to their employees. 

The claim that “we have the best healthcare system in the world” is misleading – it confuses availability with affordability.

We need healthcare reform AND MORE. We need a “medical tort reform”, defining what is the standard of care that should be expected so that doctors are not over-prescribing tests and treatments that serve only to enrich the pharmaceutical companies and medical equipment companies.  We need a “prescription drug reform”, making medications more affordable – there should be no reason why Americans pay more for the same drugs than in other countries.  We need reforms that encourage healthy lifestyles and more physical activity for both the young and the old.

We need to continue the debate about what healthcare should or should not be but not let it hold us back from enacting what should be the first of all the necessary reforms.  As we gain experience from the present reforms, we need to refine those provisions that prove to be less than satisfactory.  Nothing will be perfect from the get-go and we need to be mature enough to keep working at it and make it better.

Bringing Jobs Back

Despite a drop in the number of newly unemployed, the dismal real unemployment numbers in the US point to a need for drastic measures that will help stimulate job creation.  The Obama Administration recently held a Jobs and Economic Growth Forum to garner ideas that would help kick start a new phase of economic growth.  That effort is to be applauded and given full support by every concerned citizen.  However, grand schemes and efforts to reverse job losses stemming from the years of relentless exporting of manufacturing and all kinds of back office work to lower cost offshore centers will take time.  Congress will need to put aside partisan politics and dig deep for the courage and good sense necessary to pass laws and investment incentives that will smooth the passage for recovery without jeopardizing the future. 

In the meantime, we cannot just sit by and hope that things will change.  We cannot wait another year to replace ineffective members of Congress and put new ones in there that will do the will of the People who elected them rather than the will of the lobbyists and the people that employ them for their own selfish gains.  We cannot wait another year and see continuing job losses, even if it is at a reduced pace.  Clearly, those who have lost jobs since 2007 and are still unemployed or underemployed cannot wait another year, hoping that their unemployment checks (if they are collecting one – most self employed people do not even have that luxury) will continue and fearing the worst should any unexpected illness befall them as they lose their health insurance coverage.

As good as tax credits and new hiring incentives sound, they won’t immediately create or bring back jobs.  Corporations and businesses will not hire unless there is a demand for their products and services.  Tax credits are only good if they make a profit – if there is no profit, they won’t be paying taxes in the first place.

As concerned citizens, what can we do that will help turnaround the economy and will do so with an immediacy that the lawmakers can’t?  You might not think that as individuals, you’ll have much influence but you’d be wrong not to take into account the effect of critical mass – if there are enough of us who are prepared and willing to do something about it, WE can help turn the tide.

Starting with this holiday season, think “American” in all the things you buy and in the gifts you are planning for your friends and family.  Here’s a list of gift ideas that have a high American content and will help keep or create more American jobs:

• Tickets to Broadway and Off-Broadway or any local theatrical and orchestral productions.  Attend a “Messiah” concert to get into the holiday spirit and bring a friend with you.  The Arts are hurting as corporate donors slash costs that do not help with their bottom line and as individual donors are faced with real or possible unemployment.  
• Tickets on domestic airlines to domestic destinations for that winter break.  Airlines are very labor intensive (despite their automated reservation system) and they have the ability to quickly bring back capacity and jobs as demand increases.  Hotels, resorts and theme parks at your destination are also highly labor intensive and your patronage is a key driver.
• Gift baskets filled with domestic products (wines, cheeses, fruits, jellies, crackers, etc.).  It may be chic to have imported gift items but they don’t create American jobs to the same extent.  American products are world class and, in most cases, less expensive than imported ones.
• Gym / Sports Club Memberships.  Register yourself and your friends for a trial membership at a local gym or at a Yoga or Tai-Chi class.  If you like the experience enough (going with a friend always help), you might sign up for a more permanent membership.  These are again service oriented industries and quickly creates employment opportunities as class sizes are normally limited and each new class will require new instructors and support staff.  You’ll do yourself and your friend a world of good and you can work off the extra pounds from the many holiday parties and keep you fit for the challenges in the days and years ahead.  Think of your positive contribution towards reducing healthcare costs as well.
• Sign yourself and a friend up for a class to learn new culinary skills, a new language or pick up defensive driving credits.  You’ll be a better cook and you and your family will eat healthier OR you’ll be better qualified for jobs that look to exporting American goods and services to overseas markets with your new linguistic skills OR you’ll save a few bucks on your car insurance.
• Invite your friends from other countries to come visit America.  It is a beautiful country and there is so much to see and do and they can take advantage of the weaker dollar.  Sales taxes in America are very low compared to the VAT or GST levied in many countries.  Tourism is a big employer of labor and every direct job created has a multiplier effect, creating further (indirect) sales and jobs.

I’ve planted a few easy ideas on what you might do to help turn around the economy.  I’m sure that as you put your mind to it, there will be plenty more you can think of to add to the list.  The important thing is to ACT NOW and THINK AMERICAN.  Focus on the American Content factor (read my previous post) in what you consume and you will be instrumental in bringing jobs back the way your politicians can’t.

As I began to write this blog, I was reminded of a very short rhyme that I learned in grade school:

Little drops of water, little grains of sand

Makes the mighty ocean, and the pleasant land.

YES WE CAN MAKE A DIFFERENCE !!!  

Spread the word – share this blog with your friends.

Reforming Government

It does not surprise me that so much of the negative sentiments over health care reform stems from a general sense of distrust in “Government”. The corruption we see reported in almost every State where elected officials abuse the position of trust and power GIVEN to them by their constituents feeds into that distrust and, over time, it has eroded our confidence that anything labeled as “Government” can be of any value or do any good. As the title of a Tyler Perry movie goes, “I can do bad all by myself” – we certainly don’t need to elect or pay anyone to abuse us.

Things have been so bad in New York that a New York Times editorial (Oct 18. 2009) titled “Fed Up with Albany” recommended voting out every incumbent member of the state’s legislature if nothing is done within one year to clean up the mess (click here to view the NYT editorial). Readers from outside of New York chimed in with their comments and left stinging remarks about the disgraceful and shameful behavior by their own state’s elected officials, voicing their agreement with the idea of voting out every incumbent simply because they are an incumbent.

Unfortunately, we often have an innate tendency to generalize issues and things and, in doing so, we destroy the good that is overshadowed by the bad. Identifying the real issues and dealing with them may be more time consuming but clearly more civilized and less damaging. In the Biblical story of Sodom and Gomorrah, even an angry God was prepared to spare the lives of the Lot and his family before he rained fire and brimstone upon those cities. We have a duty to separate the good from the bad; the wheat from the chaff.

In fairness to the New York Times, their editorial included a promise to outline the ways that the existing inbred system allows for abuse and what Albany could do to change its ways. I will watch for their recommendations with great interest – New York is the only home I’ve known since coming to the United States.

The purpose of my posting here is to go one step further because “Government” is not simply made up of elected officials sitting in the halls of power inside the Capitol buildings. It includes Public Services that are run by the Government, funded by tax-payers’ dollars. The people employed by these Public Services are often the only faces most of us will see in our dealings with the Government.

Whenever I have had to avail myself of the services they provide, I make it a point to smile and be friendly, hopeful that in doing so, I will make their day a little brighter and in exchange, what I need done will be achieved with some dignity and expediency. Happily, my tactic works better than 50% of the time so it isn’t a wasted effort.

Unfortunately I can also say from experience that often times the faces I see are dour and the attitudes appalling – almost as if by my being there with a need which only they could service, I have become an unwelcomed intruder in their plans for the day. I’ve had employees of public services disappear on me while I was standing at the service counter because it was their lunch time or a personal call came in on their cell-phone and they didn’t want me to listen in on their private conversation. I’ve watched in amazement as they would stop working on my case because colleagues nearby had started a conversation about something outside of work and they felt a need to be part of that conversation. I’ve had to fill in a tri-fold, 4-color pre-printed form simply because it was standard procedure – despite the fact that all information I had to provide is already in their computer system and unchanged – only to see the form tossed into a trash bin moments later. I could go on…

Public Service is where we clearly need reform as well if we want to improve on the image of Government. Standards of efficiency and quality of service must be set and independently audited to ensure compliance and there must be accountability where the standards are not met. Pay increases must be matched by better performance and increased efficiencies so that they are self-funded and no new taxes are required. Public Service employees must be treated as private sector employees are treated – lifetime employment should not be guaranteed and they should be subject to the same possibility of termination for poor performance and for cause. Outside expertise should be brought in to improve work-flow, eliminate unnecessary processes and costs while enabling greater automation and efficiency. Performance of Public Services employees can and should be bench-marked against performance of employees in the private sector and made public so that there is transparency and necessary actions be taken to weed out the inefficiencies.

There is no reason why public services cannot be just as efficient as the private sector. If virtual monopoly exists, find ways to break up that stranglehold. Private schools co-exist and compete with public schools and private parcel delivery companies co-exist and compete with the US Postal Service. Similarly, private transportation services compete with public transportation services.

If politicians, elected officials and public service employees are keen to keep their jobs, they need to do a better one. The nation is suffering from the cumulative and simultaneous effects of the bursting of the housing bubble, the near meltdown of financial services, and technologies and policies that have enabled the relocation of many of the so-called ‘middle-class’ jobs to lower cost countries. Policies of the past no longer serve the needs of the present or the future and changes must be made from the very top to the very bottom of “Government”. Failing that, we should start looking at outsourcing or off-shoring Government jobs.

Venturing into a “No-Fly” Zone

According to The Associated Press, British Airways (BA) announced that with effect from October 7, 2009, it will start charging passengers who want to chose their seats in advance – 10 pounds for an economy class flight within Europe; 20 pounds for a long-haul economy flight and a whopping 50 pounds for an exit row seat. Even business-class passengers are not spared, having to pay 20 to 60 pounds depending on whether it is a short or long haul flight.

I expect BA to reverse its decision soon enough – it is plain dumb and reflects a desperation on its management’s part to raise revenues at all costs, even at the risk of losing customers. It is fascinating (and frightening) that BA’s management should even contemplate that their loyal customers will be happy to part with more of their hard earned money at a time of economic uncertainty, simply for the privilege of flying on BA.

I can understand charging more for seats based on the amount of leg-room or the degree a seat can recline (both clearly class related), even if those seats are in the same economy cabin – that is what most US airlines are already doing - but charging a hefty fee for the “privilege” of picking seats in the less desirable section of the cabin is clearly over-reaching.

All is well if enough passengers are prepared to fork out the extra dough to pick their own seats in advance, but what if that scenario does not play out? Imagine the anguish and the anger when a family with an infant are assigned seats that are spread around the cabin – who will tend to the child when he/she cries?. Imagine the annoyance when a couple leaving on a honeymoon are assigned seats that are far apart – great way to begin a life of togetherness. Imagine an elderly person susceptible to incontinence being assigned to a seat away from the aisle and the bathrooms.

Oh, sure, the gate-agents can reassign seats to accommodate those with special needs but should there be enough cases of those same special needs on a single flight, it will be a nightmare for the gate agents as each seat reassigned may raise a whole new set of problems and consequences. Expect take-off delays or having to arrive at the airport hours in advance to beg or fight for seat reassignments.

Thanks to the Internet, Airlines were able to push the task of seat selection to the consumers thereby cut down staffing at the gate and saving millions in payroll costs. By allowing passengers to pick their own seats, they also end up with customers who are generally happier, especially on flights that are not filled to the capacity. Passengers will almost always chose to spread themselves out (leaving the middle seats empty, etc) and their overall flying experience is enhanced with no further effort by the airline.

BA’s decision effectively reverses that and it will be interesting to watch what happens. I would very much doubt that they would be able to greatly raise their revenues because of that decision, especially on the short-haul flights and as long as there is stiff competition from other airlines. Without a doubt, BA’s competitors will use BA’s newly announced seat-selection-charge as a leverage to snap up all the disgruntled BA customers.

Clearly, the latest business decision by BA is questionable at best and destructive to its customer base and loyalty at worst. It is venturing into a “no-fly” zone as far as customer tolerance is concerned. Airline passengers are already bullied into cramped seats, checked baggage charges and no free-meal service on board. What’s next, charging for the ‘privilege’ of being able to breath on board a flight?

Go American

“Caveat Emptor” was one of the first Latin phrases I learned in law.  Quite simply, it means “let the buyer beware” – the purchaser has to take a certain degree of responsibility for ensuring that the property he/she is purchasing is fit for the purpose it was intended before closing on the deal.  As an example, home buyers will have their lawyers conduct a search on the property’s title, purchase title insurance, and hire an engineer to inspect the condition of the home before closing on the transaction. 

The “Caveat Emptor” doctrine works well with big ticket items (as in the example of the home purchase) but is more cumbersome and off-putting for the lower cost consumer items.  Hence most stores will have consumer friendly return policies that allow a hassle free return of items that are defective or do not meet the consumer’s requirement within a reasonable time after the date of purchase.

Because of the ease of buying and returning such consumer items, most of us do not think twice before acting on our urge to buy something.  We wanted it (because some clever advertisement or a ‘cool’ friend convinced us we “need'” it) and we went out and bought it because we could afford it.  Simple.  We rarely, if ever, think of the social and economic impact of our actions beforehand.

Yet everything we buy has an impact.  The stores make a profit; the sales person makes a commission; the truckers bringing the goods to the store were paid for their services; and so on.  In turn, we have to go to work daily so that we have an income to pay for the things and services that we consume. 

In short, our consumption creates jobs and, conversely, we can consume because we have jobs.  It is a dependency that has grave consequences should the link be broken. 

This recession is especially severe because job losses started in those industries that have a high degree American labor or content – housing, finance and auto-manufacturing.  Each job loss has a multiplier or cascading effect.  When those workers lost their jobs, their consumption pattern suddenly ceased and retail and sales of non-essential consumer products dropped precipitously, sending more workers to the unemployment lines.

The lessons learned from this downturn have to be put to good use if we want to recover from it and protect ourselves from yet another economic disaster of a similar magnitude.  Like the green-movement or awakening that brought ecological-consciousness to the forefront, we need a second green-movement that will bring economic-consciousness into every US Citizen’s thinking. 

Here are a few starter thoughts:

1.  Go American

Buy products that are high in American content.  Start with buying local produce:- fruits, vegetables, wines, cheeses, meats, processed foods that are locally produced.  Shop at your local farmers’ market.  Write to your local grocery store / chain and ask for more local products and dedicated American product aisles.  American produce is world-class and competitively priced - there is no reason to buy foreign. 

Vacation locally – there are many affordable American vacation products and places to visit.  They create jobs in America.

2.  Demand transparency and accountability

Write to the CEOs of the companies that benefit from your consumer dollars and ask for transparency into their practices – percentage of their jobs and production located in foreign countries; percentage of their product that have foreign content; etc. 

It is important to include the CEOS of foreign producers or importers of foreign products – they can create an impact by increasing the percentage of American content or labor used in their product.

3.  Lobby your representatives

Write to the congressmen representing your district or state and demand that economic-impact reporting become standard in every publicly listed companies annual report and filing. 

Ask about fair trade practices of the countries America deals with – what is the imbalance of trade with each country and how they plan to address that.  We want our creditor nations to be buying American products and services, not just US Treasuries.

I’m not recommending a boycott of any sorts over foreign products – I’m merely pushing for a greater awareness of the need for a higher percentage of American content in the products we buy, and what other countries buy from us in return. 

Yes, just like it has become hip to buy ‘organic’ products, it can become hip to buy ‘American’ products too.  And it will be more expensive to go ‘American’ as it was to go ‘organic’ but the end result will be worth it.

Some of us laughed at the ‘organic’ movement but it has taken root and become a settled part of our social consciousness.  We can make the ‘Go American’ movement work too.  It will take a conscious effort by every American concerned about his/her future or that of the next generation.  Sitting by idly or ignorantly and doing nothing is clearly not a solution.

YOU ARE AN AMERICAN; BE PROUD TO BE AN AMERICAN.