Monday, April 27, 2009

Victims of their own greed

by Don Klein

The guest speaker addressed the annual meeting of a group of women bankers about 20 years ago. "You guys should be ashamed of yourselves. You have the easiest job in the world. You take my deposits and pay me 4 percent interest and loan my money out to borrowers at 10 percent. How can you not make money?"

He went on: "It’s like taking candy from a baby. There is no risk to you. How could you ever fail?"

What the speaker didn’t take into account was that bankers would soon reach the apex of greed that some of them will make bad loans that seem lucrative in the hopes of increasing profits through speculation. The speaker, by the way, was me, and I was so wrong that day.

I had been invited to speak at a luncheon of Maryland professional women bankers (I don’t recall the actual name of the organization) in suburban Baltimore. I thought my opening line would stir up the audience of about 100 women and by these words they would remember me since most of their guest speakers delivered dry kitsch when they got up to talk.

Instead of shocking the crowd, it was I who was stunned. First of all, they roared approvingly with laughter when I made the remark. And after the speech they gathered around me and expressed how humourous they thought my talk was. In their haughtiness they did not take what I said seriously.

At the time banking was considered sanctified and bankers were sacred cows. They knew all the quirks and pitfalls of money lending and it was unlikely that any borrower, and certainly not large numbers of them, would affect the solvency of the rock-ribbed institutions of long standing. Wrong again.

I recall the arrogance of bankers when my wife and I sought a loan for a small business we planned to open. These pompous loan officers would sit behind their oversized desks, look at our application, ask a few unctuous questions and then rule that we were not qualified for the loan we sought. That was years before these very same ravenous masters of monetary manipulation started giving out half-million dollar home loans to school bus drivers and supermarket cashiers.

They went from one extreme to another and wondered why they needed billions of taxpayers’ funds to save them from eradication. There is a five-letter word that describes bankers. It is: GREED. Profit was not good enough. Super profits were what their ravenous hearts demanded. When you match that attribute with lack of government controls, you end up in Wizard of Ozland where all you do is push buttons and move levels to get an outcome no thicker than onion skin.

Don’t think I am writing this because I am bitter about those banks which refused to give us loans. Eventually we got the start-up money we needed from a small neighborhood bank which recognized the value of our business plan and we did quite well with our small enterprise. We paid the loan back with interest, which is more than can be said of the horrible loans the big banks gave to unqualified borrowers decades after they turned us down.

One of the reasons it is absolutely essential that banks be regulated is because they never deal with their own money. They take your money and mine and play awful gluttonous games with it. They make large profits on OPMs (other people’s money) but they are often not very smart about it. They turn down good deals likes ours of relatively piddling amounts and fall victim to their own avarice by making bad deals for lots more money than we ever thought of asking for.

Here’s another instance of bank imbecility. I dealt with the same bank for more than 30 years when one of their own executives, working under the noses of top bank management, was stealthful enough to embezzled some $60-to-$70 million dollars. It was the bank’s stupidity that allowed the corrupt high executive to pull off the theft. And it was the bank’s ineptitude not to discover it for years.

The following weekend when I entered my branch of this bank to withdraw a trifling $100 the teller who had worked with me all these years and knew my name when I stepped to her window suddenly demanded personal identification. They were duped by one of their own so now the little depositors became the target of a crackdown. The teller apologized when I not only refused to show her ID but scolded her for acting like she didn’t know me.

Her answer was plaintive: "Oh that’s the new policy. We must ask for ID from everyone withdrawing cash, even long-time customers." They never demanded ID from me again. That bank soon was bought out and no longer exists.

Making sweeping policy without considering specific circumstances reminds me of the time I was carded in Los Angeles International Airport when I ordered a beer. The bartender demanded I show him ID. I looked at him in bewilderment. I was in my seventies at the time, and looked it, but that didn’t dissuade him. The policy at that saloon was to card everyone.

The American banking system and that silly Los Angeles bartender have many things in common. They are, besides being greedy, pompous, out of touch with reality, disrespectful to the community they serve, and stupid -- and deserve all the negative assessments they get.

As a result of these experiences I swore that I would never fly into Los Angeles International again if I had a choice and if a bank official who knows me ever asks for identification I will respond with, "Who among the bank’s loyal staff stole money this week?"

Thursday, April 23, 2009

Fond memories of Army's 'Mr. Inside'

by Don Klein

When I was a young reporter I never liked writing obituaries. I always felt I was being punished by my editor for committing an umbrage. How wrong can youth be? Now I read obituaries every day because despite the sadness it often brings when realizing a life has ended, the story is usually the most elegant and evocative piece in the paper.

I read obituaries not for the reason an aging wag once explained "to make sure my name was not on it" but because it is a wonderful last tribute to someone who formerly lived a life of interest. We all live interesting lives whether we realize it or not.

Stop anyone on the street and if you can get them to talk about themselves, as reporters are more likely to do than most people, you will realize the remarkable factors that go into making a "normal" life. Besides, with most newspaper obits a reader gets that one last chance to spend time with someone they haven’t thought of for years.

Take Felix "Doc" Blanchard, the former West Point football star of the World War II era. Blanchard died this week in Texas at the age of 84, but when I was a callow youth in my early teens he was the rough and tough star of Army football when Army had the greatest football team of the day. The team never again attained such glory.

Every Saturday when Army football games were broadcast on radio – there was no commercial television in those days – I would find a suitable chair and sit on its edge to listen to the exploits of Blanchard and his sidekick Glenn Davis.

During Blanchard’s three years with Army, the team never lost a game.
Blanchard was called "Mr. Inside" because of his exceptional running talent erupting like a volcano up the middle of the field. Davis was known as "Mr. Outside" because he was speedier and could turn the corners better than his colleague. Between the two, Army football was invincible in those days and like any male adolescent during wartime I was completely enthralled by the duo.

Now with the death of Blanchard there comes to mind distinct memories of those wonderful days. Much like the death of actress Fay Wray five years ago, the curtain was closing on my memorable early years of star worship. Wray was the first actress to stir admiration for the opposite sex as she writhed in the clutches of King Kong in my prepubescent days. Blanchard came later and was probably the last of my teenage heroes. As I grew, I realized there are not nearly as many to admire as a child might have thought.

Davis died four years ago and now that Blanchard is gone the famed "touchdown twins" are no longer, but the memory remains. Blanchard scored 38 touchdowns in three years and Davis 59 in four.

I remember a particular day from that era. My grandfather was in a hospital not too far from where we lived in the Bronx. My mother had six sisters and three brothers and many of them used our apartment as a pit stop before or after visiting grampa. On a November Saturday in 1944 Army was playing either Navy or Notre Dame when my Aunt Rose and Uncle Sol from Brooklyn dropped off their sons, my younger cousins, Philly and Irwin, while they visited the hospital.

I had just turned 16 so my mother explained to me how to put up a pot of spaghetti for us three boys while the grownups were visiting the ailing patriarch. Everything went well until I drained the spaghetti into a serving dish and put it, mixed with sauce, on the kitchen table. The radio was blasting away reciting the resolute exploits of Blanchard and Davis.

I was glued to the squawking box during one of the more exciting moments of the game and when I turned back, Philly and Irwin had their hands deep into the pasta bowl and were stuffing their mouths without utensils like cavemen. Today all three of us are grandparents and still whenever I see my cousins I think of the time they ate handfuls of spaghetti like Fred Flintstone while Blanchard and Davis made it a perfect football day for us.

Davis was more of a ladies man and even went on to become one of Hollywood actress Terry Moore’s numerous husbands. He also played professional football for two years with the then Los Angeles Rams. In contrast, Blanchard turned down all offers of personal fame and professional football to become an officer in the Air Force (this was before the Air Force Academy was started in Colorado Springs) and served honorably until he retired as a colonel in 1971.

He served a brief spell as an assistant football coach at West Point. But his greatest achievement was how he inspired a bunch of adolescent boys during a very dark period in the country’s existence. No one did a better job than he on his school’s football field, the first to win the Heisman Trophy as the best college football player while still just a junior. Then after graduation he fulfilled his obligation as an fighter-bomber pilot officer. He flew 84 combat missions over North Vietnam.

Blanchard was all but forgotten as he served in the Air Force and for decades few people heard about him. But kids like me will never forget reading the exploits of the touchdown twins week after week for three consecutive football seasons. At the time I thought the excitement this pair generated would never be equaled, and it wasn’t.

The US Military Academy previously retired Davis’s uniform number 41 and, before he died, West Point announced it would retire No. 35, Blanchard’s famous uniform number. It is fitting that no future Army football player wear these two numbers. It is hard to conceive that ever again there will be two such great running backs playing for the same team at the same time as Mr. Inside and Mr. Outside.

Monday, April 20, 2009

Distorting equality of employment

By Don Klein

Back in 1978 reverse discrimination became an issue when Alan Bakke, a white male, was rejected twice by a medical school that accepted less qualified minority applicants. Because the University of California had reserved 16 places out of 100 for minority students, Bakke’s application was turned down.

The case went to the Supreme Court which ruled against the quota system employed by the university but in a confusing decision upheld the overall concept of affirmative action.

Dubbed reverse discrimination by many, the concept of providing opportunities in education, employment and promotion at the expense of other non-black qualified individuals has come under fire through the years. It is a tough nut to crack.

Affirmative Action was adopted in this country to redress discrimination that had persisted despite civil rights laws and Constitutional guarantees. In "leveling the playing field" it opened many doors for advancement of African-Americans and has improved life for those who took advantage of the opportunities that became available. But there are times it has backfired and actually promoted discrimination of guiltless non-blacks.

Take the case of Frank Ricci, a New Haven, Conn., firefighter for 11 years. He felt qualified to be promoted to lieutenant, so he gave up a second job he had at the time, studied for 13 hours a day and hired an acquaintance at the cost of $1,000 to read textbooks into audiotapes for him. Ricci is dyslexic. It paid off. Ricci scored sixth among 77 candidates who took the test.

That was in 2003, but Ricci was not promoted. No one was. Why? Because none of the 19 blacks who took the test qualified for promotion. As a result New Haven has promoted no fire department lieutenants in the last six years.

"The city says it was merely trying to comply with a federal law that views job requirements like promotional tests with great suspicion when they
disproportionately disfavor minority applicants," The New York Times reported. "The fact of the matter is it’s a flawed test," said Victor A. Bolden, the city’s acting corporation counsel.

That hardly assuages Ricci and 16 other firefighters, including a Hispanic, who have banded together to sue the city alleging racial discrimination. They claim reverse discrimination on the basis because no blacks could be promoted because none passed the test, no whites would be promoted either.

The case goes before the United States Supreme Court.

How the court will rule on the case is impossible to predict, but there is one thing that is easy to see. The people of New Haven who depend on the fire department to protect them in cases of conflagrations are being shortchanged because of a quirky interpretation of the law. It appears that the city believes it is more important to deny the fire department needed front line leadership because one element in society – who are minorities – failed to meet the established standards.

It is clear that time-honored tests are established to fill the upper ranks with qualified personnel and since none of the black candidates qualified, no one was promoted. All this in the name of affirmative action. Indeed the city’s defense against the discrimination charges is founded on the grounds that since no one was promoted, no one can claim discrimination.

It is interesting that instead of appointing non-black candidates the city took the weird step of trying to avoid controversy by sidestepping all appointments. The alternative would have been to lower standards so a minority could have been appointed, but the city avoided that trap by doing nothing.

Facts of this kind have been undermining the civil rights movement for decades. Affirmative action has resulted in more blacks attending schools of higher education but many have been labeled, rightly or not, as token graduates with no real scholastic achievement. Of course, this ignores the many qualified blacks in all fields of endeavor, but preferential treatment which results in jobs to the least qualified among us sticks in the throat of most people.

Now that a half-black, half-white man is operating out of the Oval Office you would think that equality has been achieved in America, yet these employment bugs keep rising their ugly heads.

Affirmative action has been a part of American scene for nearly a half century. Much has been achieved in that time. Barack Obama’s ascension to the highest public office in the land, and the most powerful world figure, is the crowning accomplishment of American democracy. But he and his wife were successes even before he was elected president last year. It is a tribute to how far the African-American community has come.

Yet with that glorious background we still stumble around on the local level denying earned rewards to others if somehow in the scheme of things minority candidates do not measure up for equal promotions. Can you imagine what would have happened if only black candidates had passed the lieutenant’s test and no whites qualified? Would the city have held up promotions in the name of racial equality?

It reverts back to an old contention. Activists say the systems are stacked against blacks and ignore the fact that many blacks have succeeded under the very same rules that some insist are barricades to their future. Black firefighters have proved their worth in virtually every fire department in the country so why use the narrow focus of one community to withhold advancement for all because just a few minorities failed the test?

Let’s go back to the days before affirmative action when the black community had the legitimate claim that they were being discriminated against even when they were qualified. It was a justifiable charge. That’s when competent blacks were pushed aside by less qualified candidates. There was a time when that was true, and that was discrimination that needed to be corrected.

What happened in New Haven is a distortion of equal employment rule. True discrimination is when someone who is qualified is denied a job, as in the white firefighters’ case, and not when someone who is unqualified is not.

Monday, April 6, 2009

A dreary world indeed!!

by Don Klein

There is an American tragedy developing and its has nothing to do with the financial meltdown. It is much more serious and longer lasting than that. It is the gradual demise of the American newspaper.

If you don’t think that is a tragedy then you have been taking too much of your life for granted. The Wall Street crisis will be resolved in time. We all know that. Things will gradually stabilize in the financial world. It always has. There will be changes but soon enough people will be buying stocks again and making money from it.

Not so with the demise of newspapers. That is an entirely different problem and once gone will never return and the America we knew during the life of this country so far will have been changed forever.

What’s so important about the existence of newspapers, you might ask?

Several things but the most important is that the foundation of a healthy operating democracy is a free and open press. The only way a democracy works properly is if the people know what is happening. Democracy depends upon an informed public to make the right decisions.

Without a well established and healthy press the public will be fed a soft diet of misinformation from a self-serving government and treacherous business elements -- and people will never know the truth if the truth doesn’t serve powerful interests. Special interest groups will become more muscular because their one sided stands will go unchallenged by the light of facts thrown on most subjects by a free press.

You think television news will take over and fill the gap left by vanishing newspapers? Don’t fool yourself. Virtually all local TV news originates with newspaper reporters covering the community served by their papers. Local TV reporters read the local newspapers carefully before they go out on assignments for that day’s TV news. Who will provide those sources without a live press in action.

Local TV stations cover City Hall, the state houses, police and fire activities, but little else. They don’t have the resources of an active and diligent newspaper with reporters spread all through the many communities.

Even national news, with the possible exception of Washington government coverage, is provided by local papers.

How would we learn about ex-Illinois Gov. Blagojevich’s plans to sell a senate appointment if it weren’t for the Chicago newspapers?

How would we learn about how badly wounded Iraq veterans were being mistreated at Walter Reed Hospital if not for reporters at The Washington Post?

How would we know about the horrors in the aftermath of hurricanes if it weren’t for local reporters getting out and speaking to victims, rescue workers and local officials seeking hard facts?

How would we know about the trials and tribulations of survivors of 9/11 victims in New York if local Manhattan papers didn’t do the hard legwork?
It goes on and on. The worst part is that without the press as a watchdog the big wheeler-dealers in the country will run away with everything and no one would be able to stop them. Welcome back robber barons. Eliot Spitzer would still be governor if The New York Times didn’t catch him cheating.

Newspaper losses have already been felt throughout the country. The Rocky Mountain News in Denver closed just a few weeks ago, so did the Seattle Post-Intelligencer and lesser newspapers around the country. The New York Times has been laying off staff every few months lately and The Washington Post is inducing editorial workers to take early retirement.

Many papers are facing questionable futures. The Chicago Tribune, once the most outspoken editorial voice in the mid-west is in serious financial trouble as is its rival the Chicago Sun-Times, so is the Philadelphia Inquirer and the Minneapolis Star-Tribune. If these papers disappear who will be around to report the skullduggery of local officials and businesses?

During World War II there were nine daily English languages newspapers in New York plus an unknown number of foreign language dailies. They all were profitable. In Baltimore the Sunpapers (morning, evening and Sunday) were giant cash cows for their owners. But that was when newspapers were the most efficient mass market advertising vehicles around. It was before television with its even greater advertising appeal.

And though reduced advertising revenues is the cause for today’s failing newspapers, the fault lies deeper than that. The trouble is young people can’t be bothered to read newspapers. Or perhaps any kind of reading other than text messaging. They can’t spell like kids used to and they don’t have the attention span to devote to anything other than the pablum served up on television or the hypnotic appeal of the internet.

Whatever the reason the end for newspapers may be near and when it comes it will greatly diminish the ability of people in this country to govern themselves. I don’t think Thomas Jefferson or Abe Lincoln or Teddy Roosevelt or Franklin Roosevelt, if any of them were alive today, would be happy about it. Neither am I, but I am glad I am too old to live to see such a listless and avaricious world.

If I can’t hold a newspaper in my hands in the morning and read about what’s happening in the world, the day turns solemn indeed. I’d know that someone is taking my country away from me, but won’t know who because there would be no newspaper to reveal the information. I would be sick indeed.

And so should you. If you love democracy, a world without newspapers would be dreary undeed.