Sunday, June 24, 2012

The power of the purse.

It was an uncanny coincidence. 


Friday, two Pennsylvania juries came in with guilty verdicts in separate high profile trials involving child sexual abuse.

One was with former Pennsylvania State University football coach, Jerry Sandusky. The other convicted a Catholic clergyman, Msgr. William J. Lynn, of endangering children by assigning a known pedophile to a church community without warning its members.

A state university and a church had broken the ultimate trust. To protect the children they educate and nurture. Sandusky and Lynn are just the faces of these scandals. They are poster boys for our deficit of trust. But university officials as well as the shepherds of the Church are hiding behind the scenes, along with the leaders of countless corporations and our governing bodies.

Our institutions have failed us and the most fundamental levels of our confidence have been shaken.

Think about it. Do you trust the banks? How about your financial advisor and Wall Street?

Many people feel helpless about the state of affairs, both economically and morally. But in these financially fragile times, we actually have more power than ever. The power of the purse.

Consider the nation’s law school applicants who chose not to apply to Penn State this year. Now, applications are down at all U.S. law schools, but they’re down 30% in Happy Valley, far outpacing the national average. The message is, we don’t want to go to a law school where university leadership allegedly broke the law and recklessly endangered children. Every application is worth $60 to the university, and when your talking thousands of them, the registrar’s office notices.

So, if you’re disgusted with banks, move your money to a credit union. Some will handle your business accounts, too. If you think Apple is exploiting its store employees by paying them less than $12.00 per hour, don't buy their stuff. If you feel oil companies are gouging you at the pump, buy the most fuel-efficient car you can afford, car pool and drive 55 mph on the highways. Or take the bus.

Register to vote, cast your ballot at the polls and then vote with you wallet. If there’s one thing business and institutions understand, it’s money. But to be sure they don’t miss the message, send them a letter, place a phone call or show up at your legislators’ office. If you just slide your account from a bank to the local credit union they’ll never miss you. But if you hand the bank manager a letter and explain you’re removing your principal on principle they’ll take notice.

It may be inconvenient, it may cost you a little more in the short run, but voting with you're your wallet will ultimately make the loudest, most powerful statement.

Occupy Wall Street, Oakland, Detroit, and Miami got attention but it didn’t change anything because no money was involved. But during the Civil Rights Movement, the Montgomery, Alabama bus boycott made a difference. It wasn’t violence or noisy protests. It was the fact that people stopped riding the buses and paying fares that ended centuries of discrimination.

If we want to move trust to the front of the bus, we have to be willing to walk the talk and let our money do the talking for us.

Sunday, June 17, 2012

No free ride.


If you told most future parents it would cost about $235,000 to raise a kid to age 18, how many would go through with it? And that doesn’t include college.

Adjusted for inflation, the number is a little closer to $295,000 for a kid born in 2011. That’s a sobering thought on this Father’s Day weekend, especially in an economy where good jobs are rare and even professionals struggle to find gainful employment.

The U.S. Department of Agriculture released its kid-cost estimate this week, including this breakdown.

Childcare and education (18%)
Food (16%)
Transportation (14%)
Healthcare (8%)
Miscellaneous expenses (8%)
Clothing (6%)

The line that jumped out at me was transportation; it’s as much as healthcare and duds combined, and just shy of food costs. Based on the cost estimate, 14% equates to over $30,000 before adjusting for inflation.

Why is it so expensive to move kids around until age 18? Does that assume parents buy Suzy and Johnny cars at 16? I doubt it.

My guess: it reflects the future costs of vehicles and energy. This should pressure families to move closer to schools, their houses of worship and other activities.
That should lead to the growth of central cities as families cocoon around convenience and urban communities.

If you think about it, it costs society significant sums to build roads and provide infrastructure for a sprawling suburbia. Taxpayers subsidize real estate developments in remote locations, an hour from our urban centers.

In Michigan, the Oakland County and Macomb County Executives, L. Brooks Patterson and Mark Hackel made an ironic announcement recently.  They want Detroit to reimburse them for police assistance their counties will provide during the city’s annual fireworks display and International Freedom Festival celebration. This was their firm public position, despite the fact that tens of thousands will pour into Detroit from the suburbs to enjoy the show.

Maybe Wayne County should return the favor every time residents of Oakland and Macomb come to use our airport. Perhaps out-of-county travelers should pay an extra surcharge since their cops don’t police the facility. Same thing at Comerica Park, Joe Louis Arena, Ford Field, etc. Detroit cops secure every one of those events, and manage traffic before and after the games.

The era of the free lunch is over and costs deserve to be shared. What’s good for the goose is good for the gander, and whatever other clichĂ© you’d like to insert. The lack of shared responsibility and public goods has financial consequences. Cities have been shouldering the burden for the suburbs for too long. 

If communities want to encourage families with children to move in, they should provide sidewalks, bike trails and convenient mass transit. In the metro Detroit area, cities like Dearborn, Dearborn Heights, Grosse Pointe and Harper Woods offer all those benefits close enough to the Motor City’s central business district, cultural center and our international airport.

I grew up on the West side of Detroit, where my mom still lives.  My family didn’t have a car until I was ten years old. Mom and Dad were immigrants and they put Catholic school tuition for four kids ahead of an automobile or other conveniences like dining out. They made the tough sacrifices that included schlepping home groceries in a cart from shops on the main street in our neighborhood. And we kids did our part. We walked to school, church and all our athletic and extra curricular activities. And yes, it was miles in the snow, round trip!

Of the items listed by the Department of Agriculture, transportation seems the easiest cost to control. The message for parents is, driving kids to soccer, dance and every other event in their lives not only teaches dependency and a sense of entitlement, it’s expensive.

In a nation that’s battling childhood obesity sounds like a little more walking is just what the doctor and your accountant ordered.



Sunday, June 10, 2012

Beware of Job


In George Orwell’s novel, “Nineteen Eighty-Four,” he crafted a diabolical character that oppressed free thinkers. Big Brother was a deified party leader of a dictatorship  that used ceaseless surveillance and mind control to manage society.

Ironically, in 2012, it’s not government that’s invading privacy to manage people, it’s free enterprise.

There’s commotion in Congress and protests on Main Street in opposition to employers who demand that job applicants release their credit reports and Facebook passwords. You can imagine, if you’ve been unemployed for a while, your credit report might look less than stellar. Complete Facebook access might reveal your love life, wacky pictures from your class reunion, your political affiliations and your religious beliefs and disabilities.

A lot of these topics are off limits to employers in job interviews. Here’s a sample of questions that are illegal for companies to ask applicants:

  1. What is your maiden name?
  2. Do you have or plan to have children?
  3. What religion do you practice?
  4. Do you belong to a social organization or club?
  5. Do you have a disease?
  6. Have you ever been arrested?


You get the idea. Employers aren’t allowed to discriminate on the basis of marital status, religious beliefs, social or political affiliation, disabilities and even crime. If an employer has a specific concern about fraud or theft, he or she must ask about those crimes only. An arrest doesn't make you a criminal. You've heard of innocent until proven guilty, right?

Among the rights we consider inalienable is the right to privacy. Seems our freedom of speech is getting some folks in trouble, and their freewheeling approach to social media is inadvertently lifting the veil on their private lives.  

What you post on Facebook can be used against you if you grant access to an employer. This year, a Congressional amendment designed to restrict prospective employers from asking for Facebook passwords failed in the House of Representatives. A coalition of 25 civil rights and labor groups are petitioning America’s largest credit reporting firms to stop selling employers access to financial records of job applicants. Some experts argue and have testified to state legislatures that there is no real world evidence to prove a correlation between credit reports and job performance or any employee crime such as stealing or embezzling.

And in a bad economy, like this one, even the most frugal can run into financial trouble. Yet surveys show 60 percent of employers use credit reports in at least some hiring decisions, and some companies won’t even consider unemployed people.

Now here’s a twist. It’s not uncommon for credit reports to be erroneous, and it can take months for you to get one corrected. Meanwhile, you may be rejected from a series of jobs without even knowing it’s your bogus credit history that’s the problem.

According to critics, Facebook is lax about complying with the Child Online Privacy Protection Act. Some reports estimate 5.6 million Facebook subscribers are under 13 years old. What a sophomoric kid posts as a teenager or college student could affect his future employment status. And unpaid credit card accounts could lead to similar repercussions.

In fairness and in the spirit of full disclosure, perhaps the Feds should require the following warnings be acknowledged before these transactions:

CAUTION: the contents of your Facebook page may be viewed by your future employer and may cost you a job.

WARNING: failure to pay credit card and other bills in a timely fashion could prevent you from getting a job.

CAUTION TO JOB APPLICANTS: during your job interview, the employer may ask you questions that are illegal. Should you work for this employer, you could be sexually harassed, illegally terminated, racially profiled, or discriminated against on the basis of age, sex, religion or political affiliation. This employer may subsequently file bankruptcy and fail to meet obligations to you such as salary, wages, benefits and pension. Federal law affords you the full right to take legal action against this employer in the event of illegalities or any breach of contract.

If nothing’s private then everything should be public, and clearly posted. Let all buyers beware.

Sunday, June 3, 2012

Can we get there from here?


What do you write when you have too many unanswered questions going through your mind? I call it blog soup. Hopefully, you’ll find these pithy chunks appetizing and easy to digest.

Our younger son is headed out of town to work a great job for a Chicago law firm for the summer. We thought a train might offer the most affordable way to get there with a lot of luggage. You can fly for $28.00 but the baggage fees will kill you. Now, you can ride Amtrak from Detroit, Dearborn, Ann Arbor, Birmingham or Royal Oak for about $52 one way. But you can only bring two carry on bags, because there is no checked baggage service. However, drive one hour to Toledo, Ohio and you can check three bags to Chitown, up to 50 pounds each at no extra charge, plus two carry on pieces. If you’d like, you can check up to six bags, and pay only $10 each after the first three. What a deal!

My question: why do I have to drive an hour to Toledo? Detroit isn’t a big enough hub to have checked baggage service? During these times of high gas prices and tight budgets, affordable transit is a must.

“Taken for a Ride” was the 1996 PBS documentary that chronicled the demise of urban mass transit under pressure from the American car industry. According to the producers, GM put the squeeze on big city governments in the 1930’s to swap streetcars for yellow buses the car company manufactured. Who’s preventing us from getting checked baggage service at the Amtrak train station in Detroit? Is it the airlines lobby? Will the high-speed rail from Detroit to Chicago offer full baggage service?

On Mother’s Day weekend, we were tied up celebrating with our older son and his lovely new fiancĂ©. So I ran out of time to blog. My topic would have been “Look, Mom … No Job!” Economic signals remain crossed four years into this recession. Why can’t we gain employment momentum, while car companies report record sales and consumer confidence was up in April’s University of Michigan Survey of the U.S.? One reason is companies are exploiting the job shortage to maximize productivity at no cost.  More and more grads and even those with advanced and professional degrees are forced to take internships at no pay.  Plus, in the advertising and marketing business, there’s a whole class of young professionals who are paid low wages and subsidized with vendor perks like free dinners, complimentary cocktails at swank clubs and tickets to must-see events. Unfortunately, they can’t pay their bills with those gratis gifts and swag. That’s what a college education buys you today.

More than 30 years ago, I did two back-to-back internships with ABC-TV, but there were rules. I was getting college credit, a grade and my professor required a supervisor’s evaluation. I had to submit a journal of my experience and meet with my professor twice during the term. In fact, I had to beg my prof for permission to do a second internship, because the TV station was predicting they’d have a job for me if I could hang on for another few months. I did and they made me an offer two days before graduation. What’s happening today with college grads is a lot like what happens to illegal aliens desperate for work. They’ll take anything, even toil for free, rather than atrophy on the unemployment line.

There’s another key point in this story; when I did my internships, my four-year scholarship at Wayne State University was valued at $4,800.00. At the time, my brand new 1977 Chevy Monte Carlo set me back $5,700 cash. Try going to college today for the price of a midsize car.  Despite all these inequities, we’re soon going to hear cries for a tax amnesty program so big American businesses can bring their enormous offshore profits home without paying the piper. If they don’t get the tax break, will corporations continue to hold jobs hostage?

Meanwhile, the presidential election is coming. What should we believe about the race? I’m going to make a prediction. Regardless of what actually happens, we will continue to hear that the polls are tight. It’s in the best interest the TV and radio networks. There are billions of dollars in ad revenues at stake. Both political parties have huge war chests, and with the U.S. Supreme Court designating corporations as citizens with full freedom of speech, this election will be the most expensive in American history. The tighter the race the more money the media will make.

On Friday, Bloomberg TV interviewed Matthew Dowd, the former campaign strategist for President George W. Bush. His analysis was that in election years, voters actually make up their minds in May, June and July and spend the rest of the time rationalizing their vote for president. So, the money that pours into advertising is designed to prevent you from changing your vote. News organizations face a significant conflict of interest. Report the facts, or muckrake for billions.

Here’s a question for the Supreme Court: if a corporation owns a TV or radio network and it runs a free ad in favor of a candidate, under the equal time clause, is it required to do the same for the other candidate? Just asking.

Gas prices are falling as the summer vacation season heats up. Despite sanctions on Iran to help diffuse their nuclear aspirations, the supply of petroleum is rising with a surprise source filling the gap. Iraq is back and pumping millions of barrels a day and their capabilities are growing. Without the Iraq war, would the U.S. have seen $4 per gallon prices in recent years?

The good news is America has diversified its energy resources and continues to pursue greener options like incredibly abundant natural gas. Even utility companies in coal country are converting their power plants to burn natural gas instead of coal. What special interest is stepping up and attempting to derail our new found trend toward energy independence?

There are answers to all these questions. Do we have enough real journalists with the courage to ask them? I’m still waiting to find out.