Commitment Vs.involvement: In An Egg And Ham Sandwich, The Chicken Is Involved, The Pig Is Committed

A recent article in the St. Petersburg Times by Robert Trigaux reminded me of this grand old saying: "Commitment Vs. Involvement: In An Egg and Ham Sandwich, The Chicken Is Involved But the Pig Is Committed." The article was published on Sunday, April 11, 2010 and it went through the cast of characters that were somehow involved with the market crash and recession starting in late 2007. The majority of the article was based on the testimony a lot of these people recently gave in front of the Congressional committee that was investigating the causes of the economic crash.

A few things struck me as I read the article and looked at the pictures of those listed as involved in the crash. The first thing I noticed, and the most obvious, was that all of these people mentioned in the article were involved in the crisis (the chickens) but none of them want to stand up and commit (The pigs) that their actions or inactions were contributing factors to the disaster:

1) Alan Greenspan, former head of the Federal Reserve Board, did not take responsibility for the crash even though many people think that under his leadership, the Fed kept interest rates way too low for way too long. During the hearings, Greenspan stated that he was right 70% of the time in his Fed decisions. While 70% might be good for an NFL quarterback for a pass completion record, 70% is not good enough when the economic well being of the nation's citizens are on the line.
2) George W. Bush has not taken responsibility for the crash even the seeds of destruction were sowed and allowed to grow during his administration.
3) Barney Frank has not taken responsibility for the crash even though he was the House committee chairman that oversaw the housing market, he did not see the biggest economic crash coming since the Great Depression until it hit him in the face.
4) Chris Dodd has not taken responsibility for the crash even though he was the Senate committee chairman that oversaw the housing market, he did not see the biggest economic crash coming since the Great Depression until it hit him in the face.
5) Henry Paulson has not taken responsibility for the crash even though as Treasury secretary he also did not see the biggest economic crash coming since the Great Depression and when it did hit, he reacted slowly with no apparent strategy for determining which Wall Street firms were to live and which were to die.
6) Bill Clinton has not taken responsibility for the crash even though as President he signed laws that separated commercial banking from investment banking, creating the behavior that led to the crash along with legislation that exempted the dangerous derivative financial products from regulation.
7) Christopher Cox has not taken responsibility for the crash even though as former head of the Securities and Exchange Commission his organization watched on the sidelines as the banking system almost collapsed completely due to shady and risky financial dealings.
8) Richard Fuld has not taken responsibility for the crash even though as CEO of defunct Lehman Brothers Fuld allowed his company get so deeply into risky subprime instruments that its demise was the biggest bankruptcy in U.S. history.
9) Raymond McDaniel has not taken responsibility for the crash even though his company, Moody's, incorrectly or falsely rated the subprime financial instruments as financially sound.
10) Angelo Mozilo has not taken responsibility for the crash even though as CEO of Countrywide Mortgage his company apparently never met a mortgage customer, no matter how uncreditworthy, that his company would not accept.
11) Franklin Raines has not taken responsibility for the crash even though as head of Fannie Mae his big investments in subprime mortgage securities led to a massive taxpayer bailout.
12) David Lereah has not taken responsibility for the crash even though as a former economist of the National Association of Realtors, he never saw the housing collapse coming and his book, "Why The Real Estate Boom Will Not Bust" was published just as the real estate boom went bust.
13) Robert Rubin has not taken responsibility for the crash even though as Citigroup Chairman he claimed he was ignorant of the risks that nearly destroyed one of the biggest banks in the world, indicating he was either a very lousy executive by not knowing how much at risk his company was at or a very lazy executive who never took the time to understand how much at risk his company was at.
14) Charles Prince has not taken responsibility for the crash even though as Citigroup CEO he was just as lousy or lazy as Rubin.
15) The Democrats in Congress have not taken responsibility for the crash even though they ran all of the Congressional committees responsible for the overseeing the housing and banking sectors of the economy and consistently rejected dozens of calls by the Bush administration to put stronger oversight onto Fannie Mae and Freddie Mac. They also rejected a request from John McCain in 2005 to rein in the dangerous lending and security practices of Fannie and Freddie. One reason for this resistance was that these two quasi-government organizations were large campaign contributors to Democratic Senators Dodd, Obama, and Kerry.

So all of these important people were involved (the chickens) in the financial disaster but none of them have committed (the pigs) to taking responsibility for the results, it wasn't their fault. If it was not their fault, then whose fault was it? This was obviously a big deal since the stock markets suffered extensive setbacks, unemployment is nowhere close to recovering, the Federal deficit has skyrocketed in part due to the large bank bailouts, and the housing market is still in the dump. But no one is responsible. In the above list, no one went to jail, no one paid a large fine, no one went bankrupt, many did not lose their jobs, and no one has an answer of why it went so wrong and why no one in a position to acted to avert or at least mitigate the outcome.

Thus, the first conclusion I draw is that this is just another instance of where the government and the people that are currently running it are not effective and the programs they are responsible for do not work. We need to do a ground up housecleaning of the people/politicians and the processes that are no longer effective in running this country.

The second conclusion I draw from he article is a little more subtle. As I look at the politicians running the hearings looking into the the causes for the economic crisis and include the list of people from above, I see that almost all of them are older white males. There are no females involved, very few younger people involved, and Franklin Raines is the only African-American who is prominent in the discussion of fault.

Could it be that this group of politicians and business leaders are not diverse enough to see a crisis developing or are too cozy with each other to want to do anything to avert these kinds of disasters? This brings us to Step 45 in "Love My Country, Loathe My Government," a step we have not talked about often in this blog. This step would require the political class to obey and heed all laws in effect that work to guarantee equal opportunity relative to race and sex. Maybe if we had a little more diversity, fresh blood, and fresh ideas involved in the process of running the country we might get some better results. Heaven knows that the current club of people running the country, both in and out of government, may be stuck in a group think mode, making them incapable of foreseeing the future disasters. Said another way, we need more committed pigs and less involved chickens running the country.

Weighing The Risk Factors Involved In E-commerce

E-commerce has become one of the hottest trends in the arena of business today. The popularity of online shopping is increasing day by day. But at the same time, the risks involved in the buying and selling online too are increasing. Even though e-commerce has created a whole new world of buying and selling; still neither the buyers nor the sellers are free from the various risks involved in the online business industry.

First of all, as the scope of e-commerce is global, the products and services are sold all over the world through the internet. So chances are quite high of your coming across various international laws that you may not be aware of. Some countries may prohibit the sale of certain kind of products or may have distinctive business laws. Hence, not being aware of various international laws in this case might hamper your online business operations. Besides, the ignorance regarding the domestic business laws that govern the internet commerce could end up in bringing some unforeseen expenses to you.

Secondly, there is a very high risk of defrauded transactions over the internet. There are many online businesses which take the advantage of distance between customers to wrongfully lure them and sending them wrong products. Also, while making payments through credit cards, customers may have to face various security issues in terms of losing their card information as well as finances. However, it is not only the customers; the online vendors are at equal risk of being defrauded while accepting payments through personal checks or money orders. Hence, it is essential to do a thorough research before finalizing your business transactions online.

There also runs the risk of information in the online business. Online information can be damaged, stolen or released with unauthorized access to a website. Plus, there is also a high risk of several copyright infringements in regard of your online information which can prove to be really damaging.

Equally harmful is the technological risk in terms of your website or web business getting affected due to technical errors. There might be attack from computer viruses which can damage your website to a great extent. There might be some negligent errors or omissions in software design which can cause unauthorized access. Or there might be problems arising due to ISP server clashes.

Besides all these risks, e-commerce also has the disadvantage of lack of personal touch and interaction between buyers and sellers. As online business is done with machines and computers, there is no such thing as personalized customer relationships in it.

Although e-commerce development can certainly prove to be an eminent business prospect for both buyers and sellers; all that is needed is a proper understanding of all its pros and cons so as to avoid the various risks involved.