Author Archives: markorton

1/23/2002 – Enron, Trust, and Malfeasance

Enron, Trust, and Malfeasance

The collapse of energy giant Enron over the last six months has produced a surprising level of outrage especially for a cynic like me.

As this drama continues to unfold, I have been trying to understand how Enron structured their business and made money. Until just last night I was operating on the belief that the cleverness and sophistication of Enron’s managers simply outstripped my analytical skills. But, as I have been following the writing in the NY Times and Wall St. Journal, slowly it has come to me that they don’t understand the maze of structures and deals employed by Enron for years either.

Then, last night, on the Jim Lehrer News Hour on PBS, Paul Solman, one of the regular financial reporters, gave his analysis of what has been going on. After listening to Solman’s report, it is clear that Enron has been engaging in massive deceit, deception, and downright criminal activity for years.

Now, I must admit to some familiarity with the habits and attitudes of managers. I am used to the aggressive behavior of managers trying to stretch the accounting systems to make the most recent quarter look good. In fact, I have participated in such activities. But, Enron has engaged in a long-term shell game aided and abetted by its accounting firm, Arthur Andersen, LLC. The failure of the government (the SEC) and more importantly, the audit companies, to provide oversight, transparency, basic facts, and above all the application simple commonsense ethics to a huge company’s activities is outrageous. It undermines the credibility of the economy. If Arthur Andersen, one of the oldest and most prestigious audit firms can be so blind over so many years, what are we to make of their, and other audit firms’ reliability for oversight of all the other firms so many of us hold in our 401K funds?

It will be interesting to see how the government and the financial institutions of capitalism react to this. It is a basic tenant of the capital and equity markets that timely, transparent information is essential not only to the best and highest use of our capital resources, but also to the maintenance of trust in a reasonably fair play space.

1/24/2002 – Long Live Marmite

“Long Live Marmite! Only the British Could Love It”

from the New York Times January 24, 2002:

from a page A4 article “Burton-on-Trent Journal: Long Live Marmite! Only the British Could Love It”

“Being British, the company has had an appreciation of the public’s divided loyalties between those who find Marmite revolting and those who think it sublime.

One campaign, a television ad exploiting the product’s notoriety for producing bad breath, showed a woman excusing herself from a sofa clutch with her boyfriend and running into the kitchen to have a quick bite of Marmite. She returns, they kiss, and the final scene shows the woman alone while the man is heard throwing up in the toilet.”

1/15/2002 – “Sophie Ristelhueber: Details of the World” at MFA

“Sophie Ristelhueber: Details of the World”

October 2,  2001 – January 21, 2002 at the Museum of Fine Arts, Boston, MA

Karen and I saw a few of Ms. Ristelhueber’s photographs a couple of years ago at the Museum of Modern Art (New York). They were part of MOMA’s annual New Photography selections. We were struck then by the power of her work.

The current exhibit at the MFA includes “Fait”, 71 approximately 4 ft x 4 ft photographs taken in the deserts of Kuwait shortly after the end of the “Desert Storm” war. Some are taken from a helicopter and others are at ground level. All are intensely detailed but in some strange way quite abstract in their impact. This is accentuated in the exhibition by the juxtaposition of aerial and close-ups so that at first glance one can not be sure which is which. This is the scene of modern warfare.

Another series of photographs entitled” Beirut” are 31 small black and white photographs of a streetscape in war torn Beirut. Another confrontation with the results of war.

There is more here in this extensive exhibit. We highly recommend it.

Every One, #3, 1994 Black and white photograph mounted on fiberboard 106 x 71 inches, unique installation at the Centraal Museum, Utrecht.

(Picture to left and text description above borrowed from MFA web site 01/15/02)

 

1/15/02

Whose Opinion (Advice) Is This?

Whose Opinion (Advice) Is This?

The Problem

At a time when we are quite aware of the need for and value of transparency in the reporting of the activities of corporations (thanks most recently to the Enron affair), we could quite usefully extend this transparency metaphor to other parts of day-to-day life. The print press, TV, radio, and internet are filled with opinions and advice from all sorts of people. Many of these pass for expert status just based on affiliation with universities, institutes, and think tanks.

Increasingly we must ask ourselves, “whose opinion is this?” Who is being served by the expertise?

Although many in the academic and chic cultural world (not to mention the various right-wing types in political and religious quarters) may think that relativism is the creation of post-WWII French philosophy, most of the rest of the world knows full well that “truth” is in fact relative, that is, relative to who is paying. No surprise, the “experts” know this too, and regularly seek to hide or obscure who is paying. Now, even the pinnacle of prestige in the medical world, The New England Journal of Medicine, has had to strengthen its guidelines that seek to separate research performed at arms length from the pharmaceutical/medical industrial complex from that more directly controlled.

A Step Towards a Solution

What can we do to provide a substantial increase in the transparency of our information sources while keeping things simple?

We should begin to demand that every expert, commentator, think tank institute, or university laboratory reveal the sources of 80% of the funds supporting its research/organizational activities. In the vast majority of case the list of sources will not exceed three or four. This protocol will provide a revealing base of background information without substantial burdens.

A Caveat

Although the protocol proposed here will increase the transparency of our sources of information, it will not relieve us of the work of making sense out of the data and theories presented in any given situation. Just because a given piece of research is funded by “bad people” does not mean that the data is not meaningful and the analysis correct.

 

11/20/2001 – The Wet Pavement Conspiracy in Hollywood

The Wet Pavement Conspiracy in Hollywood

Several years ago I began to notice that many TV ads for cars featured swooping shots of speeding cars on mountain or desert roads, many with wet pavement. As time went along, I became fixated on the ads showing cars in desert scenes roaring over wet pavement.

Movies also seem prone to wet scenes in Los Angeles. LA Confidential and Training Day quickly come to mind as featuring a large number of wet days and nights and puddles in back alleys.

How did they get this wet pavement? The arid and semiarid regions of the American southwest don’t have more than a handful of wet days in a year. In fact, deserts, typically have 10 or fewer inches of rain per year. Semiarid fall in the 10 to 15 inches per year. Here are a few cities and their average annual rainfall.

 

Average Annual Rain Fall (inches)

Miami

60

Atlanta

48

Boston

43

New York City

40

Washington, DC

39

Chicago

34

Jerusalem

19

Sacramento

17

Salt Lake City

15

Los Angeles

14

San Diego

10

Phoenix

7

Mojave Desert

4

Las Vegas

4

Cairo

1

More recently I have been noticing that TV and movie images of Los Angeles in particular are prone to wet pavement. Take the current Denzel Washington vehicle, Training Day, or the earlier LA Confidential as examples. Who are they kidding. We all know that LA is in a desert. Where does all this wet pavement come from? Are the filmmakers rubbing our noses in the history of all the Federal money that went into water projects?

11/20/01

When Work Disappears: The World of the New Urban Poor – book review

When Work Disappears:
The World of the New Urban Poor

Book Review:

William Julius Wilson, When Work Disappears: The World of the New Urban Poor (New York: Alfred A Knopf, 1997)

Race is never far from the surface in America’s public or private worlds.

The mass media is filled with images of, or appeals to, the many colors and ethnic flavors of America. Our politics is driven in varying ways by the fact of this mix. Politicians react to, or manipulate, race and ethnicity continuously. Recently President Clinton has begun a campaign to publicly wrestle with the issue and has created a commission to study racism in American life. Central to America’s struggles with race is the fact of 250 years of slavery and 130 years of post-emancipation experiences across our primary racial divide, black and white.

In our private lives quesions of race and ethnic origin are reflexive. When we meet new people, whether in our private or work lives, coded questions come up early …..”Where do you come from?”…..What kind of name is that?…” and so on.

Also not far from the surface in American life are questions of wealth and poverty. Excepting the rich and super-rich all Americans are anxious about their personal fate in the economy and aware that some are not flourishing. If you live in an urban or rural area real poverty and worse is close at hand daily. The fact of this newspaper and its street vendors is adequate comment about how real the insecurities and inequities of our economy are.

William Julius Wilson’s recent book, When Work Disappears: The World of the New Urban Poor, is an important recent contribution to enriching and enlivening the discussion (and one hopes action) around race, ethnicity, and the economy. He brings a continuing passion for the topic and for the results of research on the facts of urban poverty. The facts and figures are dense, rich, and provoking. The point of view is to look at the facts with much honesty, cutting through the political correctness that clouds perceptions and theory. If we are to be serious about working to solve problems we must see the problems clearly, even in all their messy, sometimes discomforting reality.

The Research

Before taking a look at some of Wilson’s findings a visit to the back of the book reveals the sources of the ideas and facts and figures that so richly inform the book. Besides the Index there are 30 pages of Notes and a Bibliography occupying 24 pages. Finally there are appendixes discussing methodologies and major field studies.

The book is organized in two parts: “The New Urban Poverty” and “The Social Policy Challenge”.

The New Urban Poverty

At the ever-present risk of misrepresentation and oversimplification here are a few notions presented in the first part, “The New Urban Poverty”.

The urban ghetto has changed over the last 15-20 years from segregated neighborhoods with significant rates of poverty to he “new urban poverty” which remain segregated but have much higher levels of poverty and where a substantial majority of the adults are either unemployed or have dropped out of the labor force entirely. “In ghetto census tracts of the nation’s one hundred largest central cities, ther were only 65.5 employed persons for every hundred adults who did not hold a job in a typical week in 1990. In contrast, the nonpoverty areas contained 182.3 employed persons for every hundred of those not working.”(page 19) This is an astounding ratio of three to one. Thus the new urban ghetto is filled with people who have never worked regularly.

A key structural change during this same period is the suburbanization of the economy. Jobs, particularly increasingly sparse manufacturing jobs, have moved to the suburbs. Americans hardly need studies to substantiate this. An additional factor is the public policy response to this change. One symptom is the failure of public transit systems to provide reasonable connection between inner-city residents and suburban jobs. Just wonder why the Redline subway here in Boston stops in Cambridge? Why didn’t public policy and investment carry it to the Rte 128 Belt where all the jobs are? The mass transit system functions very well to bring lawyers and financial workers from as far away as 50 miles to the towers of downtown. Try to get from Dorchester or Central Square Cambridge to Middlesex Turnpike or other hot spots of the regions economy by mass transit!!

What are consequences for job-related behavior connected with living in the jobless desert of the new ghetto? Wilson cites a study from 1930’s depression-era Austria on the effects of persistent unemployment. Here is the lengthy quote(pages 73-4) he offers:

“Cut off from their work and deprived of contact with the outside world, the workers of Marienthal have lost the material and moral incentives to make use of their time. Now that they are no longer under pressure, they undertake nothing new and drift gradually out of an ordered existence into one that is undisciplined and empty. Looking back over any period of this free time, they are unable to recall anything worth mentioning.

For hours on end, the men stand around in the street alone or in small groups, leaning against the wall of a house or the parapet of the bridge. When a vehicle drives through the village they turn their heads slightly; several of them smoke pipes. They carry on leisurely conversations for which they hve unlimited time. Nothing is urgent anymore; they have fogotten how to hurry.”

The inner-city ghetto cuts people off from the culture of work and work’s day-to-day structure and discipline. In an environment that lacks the idea of work as a central experience of adult life people develop coping behaviors. These “ghetto-related” behaviors include ones that are rational responses to survival needs, combinations of legitimate work with illegitimate and destructive patterns. Some of these “ghetto-related” behaviors reinforce inner-city ghetto residents’ isolation in the jobless desert.

Wilson also investigates the decline of the traditional married-couple family. The phenomenon of single parent families is widespread throughout virutally every slice of American life. In 1993 27% of all children under 18 were living with a single parent. Within this total 57% of all Black children and 32% of Hispanic children were in single parent families. The prospective impact of these trends on poverty are startling. Wilson cites a study (page 91) that persistently poor families tend to be headed by women and that 31% of these families are headed by black women. This in a population where Blacks make up only 12% of the total.

In the past several years of discussion of welfare “reform” it was accepted knowledge that welfare programs, particularly AFDC (Aid for Dependent Children), contribute to the decline of two-parent families. Wilson notes that there is little real “scientific”(his quotes) evidence for this position. Wilson explains the sharply higher incidence of single-parent families among inner-city Blacks as the consequence of changing norms and the lack of secure jobs and financial stability.

The final section of Wilson’s description of the “new urban poverty” is an exploration of the connection between race, inner-city workers and employers. Based on a large study of Chicago employers there were widespread stereotyping concerning work preparedness and attitudes, work skills and particularly social and language skills. Black males fared much for the worse in the views of employers. In addition employment practices that relied on hiring through informal networks and acquaintances.

The Social Policy Challenge

The second part of the book, “The Social Policy Challenge” looks to policies that will change the trajectories we, as a country, are on.

A significant problem not addressed in Wilson’s policy recommendations is the drug industry. In his description of the “new urban poverty” the impact of drugs is mentioned frequently, yet more productive government policies are strangely lacking in this second.

Here is a social problem whose impact on the community and nation is almost entirely determined by public laws. Were it not for the criminal laws relating to the distribution and consumption of “drugs” most of the plague of violence and distortions of day-to-day life found broadly through urban America, not to mention the intensity experienced in the inner city, would be eliminated.

One can easily view this situation as long term collusion between two immense corporate empires, the drug production and distribution companies and the drug control companies of Federal, state, and local police. Every Presidential campaign, every Congressional or Senate Campaign, probably every state campaign in the last 30 years has trumpeted “get tough on drugs” policies. Every year we spent tens of billions of dollars on this “war”. The results of this long war has been only to lock up an inordinate number of young mostly Black drug users; to intensify the distribution activities of the drug companies; and to externalize American drug problems to Columbia and other raw material producing countries.

 

October 1999 – visit with Nancy and Louis Vermond

A Visit from Louis and Nancy Vermond

During October, 1999 Louis and Nancy Vermond paid us a visit from their home base in Toronto. We took one jaunt up the coast of Massachusetts to give Louis, a first time visitor to the New England coast, a taste of the rocky shores.

Along the way we stopped in several towns in Cape Ann. On one spit, we found a boatyard. Here are pictures from there.

PS: Some of you will better recognize Nancy as Nancy Simms from her Cambridge days.