I have been fairly silent for a while. Watching and waiting to see how we would pull ourselves out of the financial mess we now find ourselves mired in. I am no closer to any great insight, but I find myself more and more astonished at just how low we have sunk as a society.

Toyota. A once powerful symbol of automotive quality. A beacon of corporate responsibility, and the go to vehicle for those looking for value, quality, longevity, and safety. That is… until now.

Every company makes mistakes, but it is how mistakes are handled that make a difference. So what makes Toyota’s debacle different? Well, there are a few things. first of all there is now evidence coming out that they were complicit in the deceit. “Documents released Sunday show Toyota officials basked in their success in lobbying federal safety officials in 2007 to limit a recall tied to sudden-acceleration complaints to just 55,000 vehicles, saving the company $100 million, according to an internal document obtained by a congressional committee” (WSJ, 2010). They even consistently blamed the floor mats, while allegedly being quite aware the problem was mechanical. According to the Wall Street Journal (2010) “the company blamed incidents on all-weather floor mats, instead of a potentially more costly defect with the car itself.”

This deceit in favor of profit is bad enough, but it goes much, much deeper.

In June of 2006 a man coming home from church with his family, driving a Toyota Camry, slammed into another car killing the family inside. He was going speeds somewhere between 70 and 90 miles per hour at the time of the accident. He was arrested and convicted by a jury of his peers of vehicular manslaughter despite not being under the influence of any substance whatsoever. His sentence? 8 years of which 4 have already been served. The family of the victims are in pain, and will never get their loved ones back. The driver, Mr. Lee, a Laotian refugee that came to this country for a better life and a system he believed to be just, never saw the birth of his child or spent an hour with this child in its first four years of impressionable life. Justice was served, and the American flag flew high. But this tragic story does not end here.

Mr. Lee consistently maintained that the accelerator pedal stuck and sped the car up while the brakes failed. Of course he was not to be believed. The jury of his peers had never heard of such a thing happening, and Toyota said nothing despite numerous complaints about the same 1996 Camry model Lee was driving . According to ABC News, the judge admonished the convicted man of not even showing an ounce of remorse.

The case is now being reopened, and even the victim’s family is fighting for Mr. Lee, but where is Toyota? Of course they are now concerned about lawsuits, and must have been similarly concerned in 2006. That is understandable, but let us open our eyes people! In favor of corporate profits Toyota “allegedly” stood by and watched an innocent man be sent to prison and countless other be killed or maimed.

So, how far does corporate greed go? As the truth comes out, it appears pretty far. I may not be able to do much more than spread the word via my blog and my classroom, but I want to set an example. Although I have never owned a Toyota, for the rest of my life I never will. That is how I can make a stand. How about you?

References

Linebaugh, K. & Mitchell, J. (Feb 22, 2010). Houese panel slams toyota. Wall Street Journal.   http://online.wsj.com/article/SB10001424052748704454304575081363213478420.html?mod=WSJ_hpp_LEFTTopStories

Rhee, J. & Ross, B. (Feb 22, 2010). New evidence of runaway toyotas may help imprisoned camry owner. ABC News.                      http://abcnews.go.com/Blotter/RunawayToyotas/toyota-acceleration-problems-new-evidence-                       imprisoned-minnesota-toyota-camry-owner/story?id=9903455&page=1

If you only read U.S. news sources you may have most likely missed the hard to find blurb on two executions that took place today. That is because they took place in China, and they were not child killers, serial killers or mass murderers of any kind; sort of. I do; however, want to make an example of these two gentlemen.

Their names are Zhang Yujun and Geng Jinping. No doubt you cannot pronounce the names, but I ask you to remember them. Now, before you get ready to stand on your moral high ground let’s take a look at what they did.

They were businessmen, and by fortune found themselves in the middle of China’s economic revolution running full steam ahead to a  mixed economy (market economy for those of you that only read western news sources). They each were involved in the milk trade; Jinping managed a milk production center while Yujun was a manufacturer. A lucrative business for an economically thriving society. So what went wrong?

These two businessmen, in a heightened sense of greed amidst a burgeoning “market”* economy, found a way to make their product appear more desirable to a consumer hungry nation. They manufactured, marketed, and sold what they called a protein powder, and they put this powder into the milk supply. This protein powder was actually made from melamine and maltodextrin. Melamine gives a false reading of high protein, but it is a toxic chemical that in higher doses can cause renal failure, and so it did. Six children died and almost 300,000 other people fell ill in varying degrees.

Wow, a bad business decision; an error in judgement; a greed driven parable that finds otherwise good people trying to keep up with the Jones’ or in this case the Li’s perhaps. It is nothing more than the antics U.S. business people find themselves doing, and we don’t execute people for that. Heck, if we did we would have to put half of Wall Street in front of a firing squad. Not to mention the leaders of places like Boeing, PG&E and hundreds of others. Medical insurance company heads alone would be quaking in their boots. Pharmaceutical CEOs would be heading for the border. Isn’t it great that we are so civilized?

Now let me knock you off your principled pedestal. The Chinese defense lawyers blamed the government for not paying attention. To quote one, “it’s the food supervision and inspection authorities that are responsible for this.” It was inferred that the greedy client was not to be blamed, despite knowing the harm it would cause, because it is someone else’s responsibility to catch them. This sounds a little familiar to me. Our own banking industry championed the same exact reasoning!! That’s strange.

Now, our Wall Street and former White House cronies didn’t kill six children, at least not directly. But, can we not indirectly blame them for hundreds of people that have taken their lives, thousands that are on the streets, and millions out of work? China makes an example of this type of crime.  An eye for an eye. Sure we could do this too, but don’t worry guys because we don’t execute our white collar criminals even if their actions are a catalyst. We are better than that. We reward them with bailouts and bonuses.

Don’t you just love capitalism?

*Although the west claims China is becoming a market economy, the most they can hope to achieve is a mixed economy. While maintaining a Communist government, a free market economy is not possible. China themselves only state their desire to be a mixed and not a market economy.

I am a week or so behind on  my comments regarding Wall Street’s  acquisition of N1H1 vaccines, but that is partially because I am so disgusted at the in our faces display of our society’s failings that I have been stumped for words. Earlier this month it was revealed that some Wall Street institutions like Goldman Sachs, Citigroup, and others received doses of the vaccine to give to their employees. Now, all large companies request them, but they received them. As we all know, there are simply not enough vaccines to go around, and adding insult to injury people are dying of this flu that could reach pandemic levels.

Currently the vaccine is for those at the highest risk. So, what makes Goldman Sachs employees high risk? Nothing. What makes them more special than our hospitals? Nothing. Why should they have a better chance at health than others that are in immediate peril? They shouldn’t. In fact, they should be the lowest risk group in the country if we want to be fair, but a plutocracy is not fair. There is that word again. It just keeps popping up. First they stole from our economy, then our taxpayers, and now from our very well being and survival. You may even agree with me, but you are probably still saying to yourself “it doesn’t have anything to do with me.” May I remind you of a piece written by Friedrich Gustav Emil Martin Niemolle for a speech he gave in 1946.

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for the Jews,
I remained silent;
I wasn’t a Jew.

When they came for me,
there was no one left to speak out.

I am not equating Nazi Germany with what is happening here in any way, but we simply cannot continue to turn a blind eye to the destruction of America by out of control big business. This nation is rich in its history of innovation, corporate social responsibility, and the best there is when it comes to taking care of our fellow mankind. Ask yourselves what is happening, and how much more can we take before we demand something is done?

Anyone that doubts we are a plutocracy must look at this as another example. Please, I beg someone to take the opposing side to this argument and prove me wrong. Can’t, can you?

It is fairly plain to see that the $700 billion stimulus has not worked. At least not so far, and in light of the planned executive bonuses there is a fair chance we can take that statement to the bank. This is good in that at least we have something to take to the bank considering all they are taking from us, but I digress.

As an economist, I take this seriously. I realize the government is trying anything to get the economy back on track, but seriously folks in D.C. Did you really think that money would find its way down from Wall Street to Main street? A trickle down theory of economics is good, and has at times been successful; however, not when greed and corruption are rampant. This is where my common sense becomes inflamed. The government knew very well that corruption had caused the banks to crumble. Why then would they pour $700 BILLION into a corrupt institution?

Did we need a stimulus? Yes. Do we still need a stimulus? Yes, because main street is still suffering. Unemployment is quickly approaching 16% in places like Michigan, but even in California it is continuously creeping up. According to the Bureau of Labor Statistics it rose again to over 12% in September. In fact, that is only “registered” unemployment and not actual figures. It does not account for those that are underemployed or are not eligible for unemployment compensation such as the formerly self employed. If we counted those workers the numbers would more than likely approach  at least the 20% – 25% level. As of the latest September statistics, long term unemployment (those unemployed more than 27 weeks) rose to 5.4 million people. Does this sound like a recovery? Does this resemble a successful stimulus?

Although I was not a fan of the previous administration, I am also one to give credit where credit is due. The decision to give a stimulus to the people, in the form  of a $600.00 check, was a step in the right direction. It was designed to “stimulate” consumer spending, but it did not do the trick and was therefore deemed a failure. That was also part of the design. The administration needed to be able to point to a failure of the trickle up theory of economics. The failure was in the fact that the amount was ridiculous. If anyone thought that $600 in a person’s hand was going to do anything but pay a bill or two they were sadly mistaken. Very few people ran out and went on a shopping spree with a paltry $600, and thus consumer spending continued to drop. See, trickle up doesn’t work so let’s try trickle down and give big business billions said the guys in charge. Whew, aren’t we glad they tried? Don’t we feel better now?

Why not try this President Obama? How about taking the beginning amount of $700 billion and divide it by the 250 million adults in the U.S.? MAYBE, even add another $700 billion to the mix, which is probably closer to the amount that will actually end up being poured into our failing economy. Divide all of that by 250 million adults and watch how they spend their $5,600 windfall. Yes, people will pay down a bit of their debt like they did with the $600, but they will definitely go out and spend some of that much larger check. How do I know this? Because it is human nature. Sociology 101 for a consumer nation, and especially with the holidays right around the corner.

Trickle down did not work. What do you say we give trickle up a “real” try, and watch our economy start to right itself with a genuine stimulus?!

BLS (Oct. 21, 2009), Regional and State Employment and Unemployment Summary. Retrieved Oct. 23 from

http://www.bls.gov/news.release/laus.nr0.htm

The new film by Michael Moore, Capitalism, A Love Story, did not really say anything different from what I  have been talking about for many years now. While I am not necessarily always a fan of his tactics, he does have some very insightful things to say. Capitalism is failing.

For almost a year now we have been hearing Wall Street wail as loud as they can for help so we bailed them out despite the knowledge that they created the disaster themselves by virtue of unethical business practices and greed. The idea was such that pouring taxpayer money into badly managed, unethical, parasitic banking institutions would save the economy, our beloved free market system, and give them more money to loan. The trickle down theory of economics in practice, but it is not trickling down and never will. Therein lies obvious as well as less apparent problems.

By the very definition of capitalism and free market economy it is survival of the fittest. This is what Wall Street has been espousing far longer than I am alive.  But wait! Apparently that does not apply to Wall Street itself, and the rest of us never got the memo. If it did apply they would have insisted that inferior institutions be allowed to fall in order to make way for the stronger ones, but they didn’t. All of a sudden they had their hands out with fear mongering speeches decrying the end of America. The best part is that we the American public, and our government, all drank the Kool-Aid. We buy into fear. It unites us. It gets us to agree to things that we later scratch our collective heads in wonderment over. If the previous eight years can be pointed to as an example it is not surprising we find ourselves in a similar position today, and those that reap the rewards stand laughing.

Just a few days ago I ended up in a conversation with an otherwise intelligent man that begged me to understand that the United States financial system was hours away from “Armageddon.” Armageddon?! Does this not wreak of familiar pulpit driven tactics to control the masses from thoughts of upheaval? Of course, the moment he began spouting his vitriol I correctly guessed that he was an investment banker by trade.What was there to understand? Where is their free market, capitalist model now? I do not see small business being bailed out, and small business employs the bulk of Americans. Small businesses are failing at record rates because of the mess that Wall Street created.

I am not saying I disagree with a free market system, but left unchecked as it has been since WWII it is doomed to self destruct. The fact that our economy has been in free fall has not been remotely solved by the big bailout, but why? That is what they promised after all. The answer is simple. Our form of capitalism breeds greed. We can look back to Lord Acton’s famous quote; “power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” This is why my recent debate opponent sees nothing wrong with the bailout or the huge sums being given out as bonuses to the very people that did a poor job to begin with. It is not that he is a “bad man” as Lord Acton would suggest, but he is employed by some. If the rest of us had driven our companies into the ground we would surely not be given bonuses.

This folks is capitalism, but it is not democracy. They are mutually exclusive from one another despite what we are too often told. It is not democracy it is plutocracy, which is the form of government rampant, unchecked capitalism is best suited for. By definition plutocracy is “government by the wealthy.” Sound familiar?

I have talked many times about the theory of “the customer is always right.” Once again, it is not necessarily that the customer is in the right, but they should at least be left with the perception that they are being given the benefit of the doubt. While many companies out there are very good with this others are not. It should be remembered that not all customers can be satisfied, but when a company goes the extra mile to make a customer angry their existence in the business world at all should be questioned. When this occurs it not only breaks the basic rules of customer service but delves into unethical behavior.

A perfect example of not only bad customer service, but unethical behavior can be seen in the company Music Express Limousines. About a year ago I utilized their service for a pick up at LAX airport, which a friend had booked through her company at the suggestion of Music Express’ VP of Sales, after a grueling business trip to Mexico City. My flight arrived very late, and needless to say I was exhausted. The driver was there waiting, as I was his last run for the evening, and promptly took control of my luggage cart while escorting me to the car. He opened the door, gave me a nice cold bottle of water and proceeded to put my luggage in his trunk. It took us approximately 45 minutes to get to my house during which I could barely keep my eyes open. Upon arrival he handed me my bag and shut the trunk. I immediately asked him for my second bag at which time he indicated that there was only one bag. Trying not to lose my mind I asked him why he didn’t put BOTH of the bags on the cart into the trunk. He spent the next 10 minutes arguing with me and insisting there was only one bag all the while I became more and more frantic at the knowledge that he had left my carry on bag with my computer and camera on the cart. He never for a single minute took responsibility, and he even called his dispatch to say I, the customer, must have left it at the airport. I was livid, and his response was to call his dispatch and have someone get back to me in the morning. At that point I demanded that he drive back to the airport immediately WITH me in the car. While in the car I called the VP of Sales, whom I had known for many years and let her know what was happening.

After 45 minutes more of pure hysteria at losing all of my equipment, and his lack of care, we arrived back at the parking spot in the nick of time. A very honest LAX employee collecting carts saw the bag on the cart and called the airport police. We had pulled into the lot just behind the police vehicle, which informed us that they would have treated it as an explosives scare, but luckily they carefully reviewed my ID and released the bag without further incident. At this point you would think all’s well that ends well, but you would be wrong.

The driver not only still never took responsibility for his critical error, but the situation got worse. The VP of Sales defended the driver! Let’s face it folks, when you hire an expensive limousine you are paying to be picked up and taken care of. When the driver tells you to get in the vehicle and he will secure your bags you also expect professionalism. THAT is what you are paying the exorbitant rates for.

The VP of Sales for Music Express finally offered to refund my money or give me a complimentary airport run at a future date. I thanked her for her help and accepted the future ride in good faith. From there I thought we had solved the problem, but alas this was not the case. She called the company that I booked the limo through in order to try and get my friend in trouble, which was curious considering I had paid the bill and it had nothing to do with my friend’s company. Still I left it alone.

Cut to today, a year later, at which time I wanted to collect my agreed upon “make good” transportation. After asking nicely to redeem the make good, this is what I received:

From: Maureen *******
To: mpawl@pawlconsulting.com
Sent: Jun 1, 2009 11:27 AM
Subject: Re: Hey you

Hi Morissa,
I hope this email finds you well.
Unfortunately time has expired to use the one way transfer and ****
******* Travel is in agreement of our decision.
Thank you, Maureen

This was interesting as I am NOT an employee of this Travel company that made the booking, nor was it a “free ride.” They booked it for me after this same person had suggested I do so, and it was a paid trip. One in which, I might add, almost cost me thousands of dollars in equipment due to their driver’s error.

So the moral to the story is that for many companies customer service has not only become disposable, but executives tend to feel that they are impervious to normal ethical behavior. When a company is wrong they should admit it! The customer is not always right, but to go out of one’s way, as with the case of Music Express, is not only a poor business practice but highly unethical. In this case, there are plenty of good transportation companies that treat customers properly. Not only will I not use Music Express, but I will encourage all I know to not use them as well.