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Serious Money: Frustration is not apathy!

One of our reader's who blesses us with frequent comment's, B. Harrison, left the following tidbit for us recently (responding to: Buffett suffers big losses at Berkshire Hathaway) and I thought I would share it because this sentiment comes to us frequently.
  • "And the American people are simply apathetically sitting back while our CORRUPT Congress who enabled and allowed all of the corporate FRAUDS, continues to allow the CORRUPT CEOs and Boards of Directors run those corporations, and to keep their ill gotten "weath" that they amassed while mismanaging the corporations, and orchestrating and perpetuating all of those FRAUDS."
I do not agree that the American people are "apathetically sitting back".... They are voicing their opinions on the web, in letters and emails to their representatives, they take to the streets and protest, they sell the stock of poorly run companies and file class action suits. The truth is that they are frustrated because our representatives have an unwavering singular focus, and that is to sustain themselves in office. Nothing takes a higher priority then that; it's called political self preservation.


In addition to the actions of the public there are thousands of journals publishing tens of thousands of stories and accepting letters to the editor for further discourse. The media, including television, radio, the cinema, and the blogosphere offer still more commentary. Very few issues in our world are not thoroughly thrashed out in public. The misconception from those that would make general characterizations is that we the people speak with one voice -- we do not!

Therefore our representatives fight to place their fingertips on a imaginary ouija board struggling to influence an outcome or decision on a subject that they have little knowledge of but nevertheless strong conviction -- that is until their polling tells them different.

This conviction may in fact come from polling done in their districts that allows them to claim the local high ground. Statistics show that most of us hold much lower opinions of somebody else's representative then our own. This of course dissipates as you look toward higher office.

In the case of corporate management, they behave like authoritarian dictator's sending money that has been skimmed off the top from shareholders to Switzerland or the Bahama's. Why do they do it? Simply because they can.

Unlike small business owners who must cater to their customers and pay their employees first, sometime foregoing there own salaries at times (especially these times) they have a "me first" attitude. At least if 'my pal Warren' screws up he not only owns up to the blame but pays the price, because he owns 31% of the company and is the biggest loser.

Many CEO's see their shareholders, not as partners, but as suckers not only letting the fox guard the hen house, holding the keys and blocking the entrance preventing the farmer from seeing whats going on inside.

While we may share Mr. Harrison's views in large part, we must recognize that the problems are systemic and not so personal. We need to review the oversight process focusing our attention on checks and balances and transparency in the process.

While management may have made off with billions in inappropriate pay and bonuses they lost plenty also when the market dropped 50% and the largest insurance company in the world American International Group (NYSE: AIG), the largest bank in the world Citigroup Inc. (NYSE: C) and the largest automobile company in the world General Motors (NYSE: GM) all are facing bankruptcy. They may be operational, but losing 97% of their value was very costly to all but a few.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of AIG, C, or GM. I do own shares of BRK.B

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Last updated: November 26, 2009: 06:23 AM

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