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Protection from corporate misconduct

March 27, 2012
By Richard Clark , Daily Press

ESCANABA - People want government to stop other people from using and selling marijuana, heroin, crack and cocaine. Banks use government to take possession of houses and cars when their owners default on loans.

Government is given the job of preventing theft, embezzlement, and extortion. It builds roads, sidewalks, sent rockets to the moon, financed the first railroads, delivers the mail, puts out fires in our homes and in our forests. In a representative government citizens address their representatives and senators when government fails.

Shares of some corporations are sold to anyone who wants to buy shares. These are publicly traded. Some corporations restrict who will be shareholder. They are closely held. Families like the Kochs own their corporation. It is closely held. They select their officers and board members. Apple Computer is publicly owned. Anyone can have a slice of Apple.

Closely held corporations often reflect the ideals of their owners. The Koch brothers' father founded the John Birch Society. They pursue private and corporate goals consistent with the ideals of the Birch Society. Publicly traded companies can run amok and hurt people just as effectively as heroin, cocaine, and meth...A case on point is Enron.

As part of its business Enron bought and sold energy. Buying and selling energy is very profitable when unregulated. You may recall electric blackouts plaguing California a few years ago. The blackouts led to the recall of California Governor Gray Davis and the election of Arnold Schwarzenegger.

California bought power from unregulated Enron. When utilities needed power they would contact Enron and Enron would sell the power at its price. It's traders we're ruthless. CBS News exposed the viciousness of traders plying their trade. www.cbsnews.com/2100-18563_162-620795.html

One trader: "Just cut 'em off. They're so (worst of the worst expletives as a verb in the past tense). They should just bring back (worst of the worst expletives as an adjective) horses and carriages, (worst of the worst expletives as an adjective) lamps, (worst of the worst expletives as an adjective) kerosene lamps."

To illustrate the callousness attached to profit is everything two traders were caught in a conversation:

Employee 1: "All the money you guys stole from those poor grandmothers in California?

Employee 2: "Yeah, Grandma Millie man.

Employee 1: "Yeah, now she wants her (worst of the worst expletives as an adjective) money back for all the power you've charged right up, jammed right up her (a very rude name for a body part) for (worst of the worst expletives as an adjective) $250 a megawatt hour."

About the time Enron was endangering the elderly in California it was lobbying the state government of Florida to privatize the sale of water. What an Enron opportunity! How much would "Grandma Millies" be willing to pay for life sustaining water?

Enron proposed storing fresh water underground and selling it to consumers. It sounds a lot like its energy strategy in California. At the time Florida law provided that water must be sold to consumers at the cost of production. Enron needed the law to change. It lobbied hard using a proposal to restore the Everglades as a carrot. Florida dodged a bullet. Before Florida's law was changed Enron imploded and Floridian "Grandma Millies" we're saved. Enron investors were not so lucky.

Lou Dobbs from Fox News is offended by Hollywood's version of Dr. Seuss' Lorax. He thinks it an anti-industry message to children. In the "Lorax" trees have been cut without replacement and oxygen, no longer produced by trees, was sold by a corporation. The story, written in 1971, foreshadowed Enron of the 1990s and early 21st Century.

Last week, a $500,000/year 33 year old Goldman Sachs executive disclosed that Goldman puts its interest in conflict its clients' interest. He wrote, "It makes me ill how callously people still talk about ripping off clients."

Goldman loans money to businesses. It sells that business' promise to repay the loan. The loan is divided into chunks. The borrowing business promises to pay interest. Goldman then sells the chunks to clients/investors. It is alleged that when the borrowing company becomes financially shaky Goldman knowingly sells the chunks to its clients at full value. It even sells its clients chunks of the loan it owns, shifting the loss from it's possession into the hands of its clients - maybe "Grandma Millie."

"Lorax" is a fable of corporate greed. Enron and Goldman are not fables. It is a legitimate function of government to protect "Grandma Millie" from corporate misconduct.

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Richard Clark, Escanaba, practices personal injury law throughout the Upper Peninsula. He can be reached at uppermichiganlaw.com/richard-clark.html

 
 

 

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