Tulips, part II

So, we’ve established that, with a little creativity, almost anything can be considered an investment. Tulip bulbs mesmerized the Dutch.

A recent example in the extreme was a young man who listed his “soul” on eBay.
The buyer was a priest who was touched by the young man’s plight. The young man thought he had a buyer (the Devil), but was considering other offers.

There is a serious point that I want to make about all this. It’s the most important point that we can make about money.

The entire issue is contained in the difference between value and purpose. Value is subjective ex. the price of real estate, gold, diamonds, currencies, clothing. Analysis of companies - price-earnings ratios, product pipeline, competitive advantages, market share – those are value issues.

When you consider purpose, you evaluate companies based on their broad footprint. Those companies that consider their environmental impact, promote human rights, animal welfare, corporate transparency, fair workplace practices; that fight discrimination, and are in partnership with their employees, shareholders and stakeholders, are purpose-driven. Purpose is never subjective. It is the essence of social investment - profit and principle.

The one-dimensional view of money, the “how much”, considers only profits. It is what allows companies to do end-runs around product safety, tolerates deceptive lending practices, allows lead-based paint in toys. The three-dimensional view brings in the interests of the consumer, the borrower, protects the children. If this seems simplistic to you, please explain to me why these issues are not dealt with - why campaigns are run on these platforms, and have been for years, and yet the problems persist.

The measure of how little progress we have made, is easily illustrated. Over 90% of every investment dollar is in an unscreened portfolio. Over 82% of the entire S&P 500 violates one or more principles of social conscience.

Warren Buffett, a legendary investor in the long history of Wall Street, knows value. So much so, that he is presently the richest man in the America, with a net worth of $62 billion. He sure can create value for his investors.

But Berkshire Hathaway is the largest stockholder in PetroChina, the engine behind the genocide in the Sudan. When asked about this, Mr. Buffett says that it is not his business to tell the government of China what to do. Mr. Buffett is not purpose-driven.

In my role as an advisor, I’ve seen the disconnect between value and purpose. Value dictates that in times of War, we invest in weapons manufacturers, oil companies. Value taught me that “War is good for the Economy”, and old Wall Street adage. Purpose precludes this. The lack of transparency in mutual funds, allows protesters to march on Washington, while owning Halliburton.

There are many angles from which to view the same disconnect. Every morning, I maneuver around 100 foot cranes, as New York City is bulldozed to make way for hotels and high rises. But affordable housing disappears, our leaders veto funds to shore up our crumbling bridges and tunnels, we have a third world education system, and we stand by as the Administration spends $12 billion a month on the War effort, mortgaging America’s future. The disconnect.

I’m not sure that the Dutch obsession with Tulips allowed the deterioration of their infrastructure, or put that little Dutch boy in the position of plugging that dyke –

-but it makes sense to me.

Tulips (Just In Time for Spring)

It is April 3rd , the 66th trading day of the year, and we’ve already had 30 days where the markets have been up or down at least 1%. That’s volatility with a Capital “V” my friends. However, it might be comforting to know that we’ve gone through this sort of thing before.

Our current crisis of confidence is all about the perception of value. This manifests itself in a number of ways.

We agree (assume) that the rarer something is, the more valuable it is. Diamonds, postage stamps printed upside down, limited edition cars. It’s not that these things function any better, or at all, for that matter – it’s that there are so damn few of them. Perception. Scarcity = value. For some reason endangered species don’t work this way.

In business, however, this works well…believe me. In my former life (sales), I learned that there was nothing better than a closeout offer. People would line up for used cat litter if it were a limited time offer. The same perceptions move people to sleep overnight, in freezing temperatures, for the latest version of the Xbox. It’s the exclusivity factor. And it’s all perception.

Which brings me to the subject of tulips and Holland. There are similarities to our current value enigma that are worth examining.

At the beginning of the 17th Century, a rare new exotic flower was introduced and soon became popular with the elite of Holland. Why tulips became a fad, I’ll leave that for the tipping point experts. But soon the prices seen for even ordinary tulip bulbs were skyrocketing. It was not unusual for bulbs to range in price from $2,000- $3,000 (today’s dollars). The perception of value had begun working its magic – and before you knew it, you’ve got tulip inflation.

Eventually, the extreme was reached. Bulbs were considered too valuable to plant, but were just displayed – unflowered, certainly unattractive…but still perceived very valuable.

Not surprisingly, bulb trading became the rage. Bulb traders were making (Are you seated?) over 60K per month in today’s dollars.

But these were simpler times. There were no bulb mutual funds. Tulip derivative strategies never came into play. There were no tulip options, or tulip futures ( I could be wrong about this ). No tulip default swaps, and no one developed a tulip volatility index. Things were simpler.

Finally, the bulb bubble burst. All it took was one buyer who didn’t show, and who reneged on the deal. Panic spread, and prices plunged. (There were no bailouts in those days.)

So let’s look at this more closely. Was it really the one buyer? Probably not. We know that the perception of tulip value did change very quickly, though.

Perhaps it was that the Dutch woke up one day and realized a sobering bit of information (a tulip is a flower) and because of that critical change in perceived value, the Dutch financial system very quickly disintegrated, which brought on economic chaos that lasted 100 years. No kidding.

Fortunately, there has never been another instance of flower mania in the 400 plus years since the great Dutch debacle. I’m almost certain that hedge funds have no origin in gardening.

So, there are many kinds of flowers…also diamonds, real estate, and investment banks. Each has a perceived value. We lose sight of the perceived value lesson until Bear Stearns reminds us. If there is no market for its assets, even a leading investment bank can be almost worthless overnight.

As we speak, the White Knights ride to the rescue, in the persons of Chairman Bernanke, and his merry band of Federal Reserve Board Governors. Don’t get me wrong – the Fed response to Bear Stearns’ imminent bankruptcy was completely necessary. The domino effect brought on by a disappearance of investor confidence would have been devastating.

But what is happening now warrants scrutiny. We are seeing a proposal that includes a complete overhaul to the system of checks and balances, a total revision of supervision. The Fed discount window, a source of ready capital to commercial banks, becomes a fallback position to the investment bankers. It is a profound change.

Chairman Bernanke’s testimony on Capital Hill was more like a pitch, missing only a PowerPoint presentation and a laser pointer. The questions from the committee were contentious, from Senator Kennedy, from others. True the Fed Chairman clearly identified his function as independent of any accountability to the American people. Still, I have a hard time envisioning former Chairman Greenspan being cross-examined in this way. Things have clearly changed.

With a sales team that includes Treasury Secretary Paulson, the Fed’s presentation is likely to be well received. The markets may recover, buoyed by additional resources.

This may very well turn out to be our White Knights, digging our economy out of the hole we’re in, or it may ultimately be The Four Horseman of the Apocalypse, preparing a hole suitable for our eventual demise.

Tulips might be nice.



Tulips, Part II to follow

The Ingenuity of Man

I have great news for you.

I know for certain that government can work, that government can be efficient, responsive and effective. I’ll say that again for those of you who may think you didn’t quite hear that quite right. Government can work. I’ve seen it happen.

Sure, we have memories of FEMA’s lightning-quick response to the disaster in the Gulf Coast, but that was the Bush administration. I’m talking about government.

Now, I live in the great State of New Jersey, the Garden State. We have much to be proud of and much work yet to be done, of course. We can point to a history marred by political corruption. We have the well traveled jokes about the scenic drive down the New Jersey Turnpike. Recently, we had a Governor who came out of the closet. But throughout, we knew that this great state could withstand any scandal, could take on any challenge.

…but then of course, there was the New Jersey Department of Motor Vehicles.

Everyone who lives in New Jersey knows that you could find your way out of a black hole faster than dealing with the New Jersey DMV. It was a life changing experience. To get a jump on this marathon, people would sleep in their cars outside the agency, like it’s the pending release of the latest version of Xbox, or the final episode of Star Wars.

First, you’d enter - that is if the line was not out the door and down the block (it usually was). You didn’t know it yet, but you were on something called the information line. Here, you’d find out what endless line you really needed to be on.

There was some initial indication as to how long this process would take. The coffee truck outside was a clue. There were some folks who’d had breakfast and were back for lunch. And if you’re aware of the level of cuisine usually available here, you’ll understand what I mean when I tell you that this was the highlight, the best thing about this experience.

Renewing your license or registration, took anywhere from 3-4 hours. Picture licenses, even longer, and felt like a booking. Sometimes I envisioned myself channeling Tom Hanks in Castaway. This could bring you to your knees in prayer.

So you can understand my awestruck reaction, and how I know that anything is possible. Anything. Any horribly inefficient business, any misguided, mismanaged mangled bureaucracy can be made streamlined, customer friendly. I’m sure of this, because they fixed the New Jersey DMV.

Though in shock, here is my best recollection of how it went.

First of all, there was no line outside the same familiar building. I asked someone if this location had been closed. They said no. I walked inside, then outside to check the address. Yes, it was the Lodi, New Jersey Department of Motor Vehicles. I looked for the information line. There was none. There was, however an information desk. It took fully five minutes for me to make sure I was in the right place.

I never sat down, never experienced how uncomfortable plastic can be. I went straight to the counter, where the apathetic service agents had somehow been replaced by helpful, almost kind people. Understand this - previously you could risk your life asking for a pen in this place.

The whole process, including my initial disorientation, and effusive expression of gratitude, took 20 minutes. For someone who’d felt like a prisoner of War, it was a surreal experience.

So, If I move away, I’m still coming back to visit. When I can no longer drive, I’ll still come back. It’ll be like a pilgrimage.

Its given me a renewed sense of optimism, of confidence. Sure, we have a third-world education system, crumbling bridges and tunnels. Healthcare is a shambles, financial institutions are imploding. Yes, these are big problems. But we now know that we can do anything.

Forget cold fusion, forget perpetual motion. Forget the miracle of Hannukah.


We fixed the NJ Department of Motor Vehicles.

FED UP?

Quote: “We can’t solve problems with the same kind of thinking that created
them.”

Albert Einstein

Maybe it’s time to shake the cobwebs out, order another espresso (make it a double), and get to work. Historic changes are occurring right before our eyes.

Last week, the Federal Reserve Bank in an unprecedented move, offered JP Morgan a $30 billion credit line, to allow the investment banking firm to take over Bear Stearns, which had become insolvent almost overnight. The precedent established is something few of us can fully appreciate.

But in connection with this situation is a development with even more serious implications. The Fed “discount window” which previously provided liquidity only under extraordinary circumstances, and only to commercial banks, would now be made available to investment banks.

The Fed action in the JP Morgan/Bear Stearns deal, and others that will undoubtedly follow was probably necessary to head off a meltdown in the financial community. But a permanent policy change allowing the Federal Reserve to provide liquidity to these largely unregulated firms, well, that’s another story. It appears that this action is being considered an opportunity. These and other changes require our immediate attention.

Yes, immediate. As we speak, a battle for control and direction is developing. The Senate, as well as the Treasury Department, scrambles to propose legislation to reform a system no longer capable of dealing with financial services firms that cannot be restrained. This is what makes the recent Fed actions/bailouts alarming. It tells us what the next dropped shoe is likely to look like.

Recent related developments point in a similar direction:

• The infusion of capital by anonymous Sovereign Wealth Funds to Merrill Lynch, Citigroup, Morgan Stanley, and others. Potentially, the United Arab Emirates port security issue pales by comparison. It is fortunate that the general public doesn’t understand the implications of this.
• The AAA rating enjoyed by AMBAC and MBIA, insurers of municipal credit, are in jeopardy, compromised by liquidity issues. In essence, buyers of AAA rated tax-free bonds pay for coverage that is not really there.
• The Port Authority of New York and New Jersey struggle to find liquidity, unable to sell financial instruments they assumed would always have a market. Bridge and tunnel fares increase almost immediately.
• Treasury Secretary Paulson questions whether investors can rely on rating agencies. Lip service is given to corporate responsibility.
• On Thursday, Standard & Poors, a leading ratings agency, signals the “end in sight” to bad loan write-downs by firms.

Friday morning, the Fed steps in with a $30 billion line of credit to JP Morgan Chase, and the news of a virtually bankrupt Bear Stearns, a $2 a share buyout, rocks the markets.

So,

…..the decision will be made to create a completely new governance system, or put increased power in the hands of The Fed. The latter could prove to be disastrous.

And,

Using Al’s definition (Einstein, not Greenspan) we cannot ensure the responsible governance of our financial institutions, with what is already in place. That would be The Federal Reserve.

A lot can be learned by browsing the Fed website http://www.federalreserve.gov/

“Seven-member board that supervises the banking system by issuing regulations controlling bank holding companies and federal laws over the banking industry. It also controls and oversees the US monetary system and credit supply.”

...Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms…

“The federal agency with rule-writing authority for the Truth in Lending Act, of which the Consumer Lending Act is part…

On the Federal Reserve site I also found the transcript of a recent speech made by Federal Reserve Governor Randall S. Kroszner at the American Bankers Association Spring Summit Meeting, Washington, D.C. March 11, 2008.

I’ve taken excerpts that I felt were important. There’s a lot more. Let me make this disclosure. I recognize that an address to the banking community might reflect a different, less confrontational tone. Nonetheless there are some telling comments.

“….in other words, it is good to have a few people within the institution (bank) who--to paraphrase a former Federal Reserve Chairman--know when to take away the punch bowl. Being the party pooper, however, can be very difficult in any organization…

“….Naturally, in very large organizations it is difficult for senior management to monitor each individual, so incentives need to be consistent, permeate even the lowest levels of the organization, and remind each individual that his or her risk-taking affects the whole enterprise.”

In other words:

Banks only need a few employees who are responsible fiduciaries. Whistleblowers, I imagine. All others, of course,“drink from the punchbowl”, getting drunk on profits, until something happens, or until they’re disciplined.

And:

This was not the fault of management, but of a system too large, too difficult to manage.

We would expect the support of business, the protection of corporate interests at all costs, in many places. We always assumed that the Federal Reserve would not appear on this list.

But this is not your Grandpa’s Federal Reserve…

A Little Knowledge is a Dangerous Thing

It becomes apparent as the green revolution evolves, that we have to be careful who we listen to.

The Motley Fool, the stockpicker / online blogger, is running a green investing series in advance of Earth Day on April 22. The MF perspective re: green investing focuses on long-term shareholder value, but so be it. Pretty one-dimensional, but we get a habitable planet in the process.

The companies that Motley Fool highlights boggle the noodle, though. Some of these companies, held up as progressive, have a checkered eco-past, some have troubling human rights records.

The Motley Fool articles applaud Coca-Cola (NYSE: KO) and its recycling campaigns, General Electric's (NYSE: GE) Ecomagination cornerstones, and Disney's (NYSE: DIS) environmental policies.

But Coke has a history of international anti-union activities including murders of union officials in Colombia; see http://www.killercoke.com/ or this Businessweek article

Applauding GE for its Ecomagination campaign shows how little MF knows about GE’s eco-history. From 1947 to 1977 General Electric dumped 1.3 million pounds PCB’s from our river into the Hudson. These PCB’s are found in the river, in fish and in us. Riverkeeper article

If you’ve seen the commercials GE runs about their portable ultrasound equipment and the difference that this is making in developing nations you’d applaud. But if you realized that one of the ways these units are used is to abort female fetuses, you’d be horrified. Washington Post article

Disney’s checkered labor history includes violations of Chinese labor laws. Workers making Disney toys work 15 hours a day. 28 days a month. To read more about Disney’s labor history, here and abroad: Disney’s labor history and Disney in China

For whatever reason, our eco-awareness is on red alert- but all the issues we deal with in reforming, transforming and supporting corporate conscience demand our attention……

Onward and upward!

Moved by the Movie

Longing for Bedford Falls....

I think I’ve got the answer.

Do you remember the story of “It’s a Wonderful Life”? The story of George Bailey, and his “wonderful old Building and Loan”? It’s a story about community, about values, about what is really important in our lives.

Why has this movie become a classic? Why do we watch it over and over again, every holiday season? Not surprisingly, it was panned by the critics when it first came out- they didn’t get it.

It is the story of a man, and his connection to the people of a small town. It is also the story of a building and loan, run on trust, built on trust. No collateral, no credit history, no FICO scores. You see, the community was the Building and Loan, and the Building and Loan was the community.

And when the time came, when George Bailey was in trouble, they came to his rescue…. passed the hat, and saved the Building and Loan. They told stories of what George had meant to them, what he had done for them. They were his family.

How different everything is now. We have small towns, but no “small town” values. We will stand by as millions of people lose their homes in the coming years, while banks and financial institutions get bailouts.

So, I had an idea.

We get our legislators together. They, supposedly are responsible for protecting our citizens - not credit card companies, not banks, not hedge funds, but the people of America.

And as they watch this story, over and over again, as many times as necessary, they will begin to get it. They will get that what is missing in their lives is that connection, to the people who they represent. It is the lesson that Bedford Falls has for them.

Now, before you write this off as the ranting of a lunatic, consider this - "An Inconvenient Truth", is a movie. If you doubt its impact on our society, open up any newspaper, any magazine, any TV channel, any day. The Green movement is everywhere. Did it start with this movie? Of course not. But it became part of our experience because we are now connected - we have seen it. It cannot then, be forgotten.


In the event that you think that this is an isolated example, consider that the fast food industry has not been the same since "Supersize Me", Morgan Spurlock’s expose’. McDonald’s has completely changed their menus, added healthy options, no transfats….and they are more profitable than ever.

Michael Moore’s “Sicko” hopefully does the same for the healthcare industry. Those images are going to stay with us, the knowledge that Cuba’s quality of healthcare is so superior to ours. We know that money is not invested in the service, it is paid to the providers… to all the partners, the drug companies, HMO’s the medical community, the managed care agencies, and nursing home facilities.

Perhaps “Sicko” does more to move us toward socialized medicine than Hillary Clinton could, because we felt it, we saw it. It wasn’t the words of a politician.

So, turnabout is fairplay. We, at the mercy of the marketing machine, will we use technology, and take back our power. Pick your passion. Don’t march in protest- pick up a camera, start a blog. Technology is power.

We’ve got so much to do.

Lights… Camera….Roll ‘em

Bad Santa

Written Christmas 2006

It is obvious to all of us, that we have major threats we must deal with.

We can no longer allow refuge to the rest of the world. We must patrol our borders, ensure our safety, and our security.

No one is beyond scrutiny, there is too much at stake-and so I call for an investigation of what may be the most dangerous threat yet uncovered to our economic stability. I call for a thorough investigation of Santa Claus, and his North Pole operations.

Lets look at some of the factors to consider.

First of all, do we really know who this man is and where he comes from? He has no known documentation. We know he has at least one alias, and what kind of name is Kris Kringle, anyway?

We know that he employs tiny people in frozen conditions in his sweatshop factory in the North Pole. We know that there have been serious questions of animal cruelty, that exhausted reindeer have been reported.

This is a strange man, a man listed in the Guinness Book of Records for breaking and entering. He has been known to keep cryptic lists, filled with personal attacks and judgments on what he considers good or bad behavior.

He has single-handedly affected the package delivery industry....and, of course, we question where these toys originate.

There has been a history of inappropriate behavior. Children have reported seeing Mommy kissing Santa Claus, grandmothers run over by out of control reindeer. I won’t even comment on what the children on his lap business could really be about.

What I do know is this..... his behavior cannot be tolerated. We must out...Santa Claus!

So this year, when you tuck your children into bed, tell them the truth. Tell them the truth about where their toys come from. Not from a jolly fat man with a sleigh, but off the shelves of the local Walmart. Tell them that the toy truck was made, not by elves held in bondage at the North Pole, but by Chinese workers, working 18 hour days, earning 19 cents an hour.

And this year, as your chestnuts roast, remember this. There is a world outside your window where there are no stockings hung with care. No Christmas turkeys, no joy-filled Christmas mornings. That we strain to think of what we do not already have, should tell us something. It should tell us that there is so much to do.

Merry Christmas, America.

Taxing Our Patience

In January of 2006, the New York Times reported that everyone’s favorite agency, the IRS, withheld refunds to our poorest Americans by labeling the refunds as fraudulent. In reality, these poor folks were guilty of no crime, although today, poverty seems to be one. In spite of their dire circumstances, the IRS didn’t return their money, or even inform them that anything was wrong. No information, no money, no justice.

So let’s call this what it is, an agency without a soul. The IRS, preying on legitimate citizens, people with no resources, who may not know any better and certainly do not or have the resources to defend themselves.

It isn’t enough that the deck is stacked against those without. The privileged get special tax treatment of dividend income, of capital gains. The average Joe gets new restrictions on bankruptcy protection. The super-rich battle for the elimination of the estate tax. While pensions for the working man are frozen or terminated, golden parachutes float insiders to lofty landings. The military industrial complex is alive and well, government influence is for sale.

The money is distributed without paper trail. When 8.5 billion dollars disappears (yes, that’s a “b”, folks), when stacks of 100’s are loaded on palettes onto C-130 transport planes bound for Iraq, and public funds go completely unaccounted for, we are hardly surprised. The event causes not a ripple, not a whimper. The silence is deafening.

This is what we have come to expect. There will be much for some, almost nothing for so many. So when tax refunds are frozen, affecting 1.6 million taxpayers with an average income of $13,000, we are not outraged.

In the 1950’s, a visionary man named John Kenneth Galbraith wrote of what we have now become, a society where the wealthy struggle to think of what they do not already have, while millions go hungry. He wrote of a society of opulence, with a widespread lack of essential services. Schools are under-funded and underperforming, banking services are non-existent. The trickle down theory was no more than that.

We are inevitably moving towards Galbraith’s dream, of a different race of men, with a different set of priorities, a different set of values and a different definition of success.

We have created all that we see. Open the news of the day. We are individually and collectively responsible. When put in a position of power, more often than not we use that power to our personal advantage. We consider those that do not to be remarkable.

We cannot expect of others what we do not demand of ourselves.

For the complete story go to:
http://www.centerforprogress.org/media_latimes_refundfreezes.htm

Deck Chairs

It is the winter holidays 2006.

I’m on vacation, but these days there is no time for relaxation. I write, and I read, and I work, and write more. It seems that every bit of information I receive is a guided message I must respond to, integrate somehow. There is meaning everywhere.

I read the financial reports of a record Dow Jones Industrial Average (12,500 as of this writing), a rebound in the housing sector, low inflation and interest rates, and as a financial advisor, these reports are good news. Growing client account balances, happy customers. The backdrop is certainly convincing. In the past 50 years, the per capita Gross Domestic Product, the measure of goods and services produced in the U.S., has tripled – a remarkable period of growth and prosperity in our history.

We are awash in new technologies, ever-expanding access to information, scientific breakthroughs and advances. Our human potential, our ingenuity and enormous creative energy dazzles. We steam ahead.

But let us pause for a moment - those who do not study history are doomed to repeat it.

On Wednesday April 10, 1912, the largest, most luxurious ocean liner ever built left Southampton, England destined for New York. The passengers mirrored the society of the day. Luminaries and celebrities, the rich and powerful, surrounded in luxury, and the steerage class passengers, mostly immigrants, housed three decks below.

The celebration in connection with this event was lavish, and reported worldwide. New technologies were reported, and world record speeds were expected. Almost unnoticed went reports of icy seas, difficult and dangerous conditions. By Sunday, April 14th, five different ships had sent urgent messages, the last being the Californian, reporting that they were stopped, completely surrounded by ice. These warnings were almost completely ignored, compounded by one tragic oversight...the hands on deck had been issued no binoculars.

At 11:40, the unsinkable Titanic struck an iceberg. Two hours and twenty minutes later, the unthinkable happened. The Titanic sank. There were 2,201 passengers aboard, 711 rescued. Seventy five percent of the third class passengers were lost, compared with 37% in first class. There were reports of doors to lower floors left locked.

Let us dial back to today’s news. An Indian island in the Bay of Bengal was reported by researchers to be the first inhabited island on earth swept away by rising seas as a result of global warming. The island, Lohacachara, near the mouth of the Ganges River, had a population of 10,000. The residents of Lohacachara, and most of the neighboring islands, have fled to a larger neighbor, Sagar. They can't stay there long, however, because Sagar, too, is disappearing. Within a few years, say scientists at Calcutta's Jadavpur University, at least 70,000 people in the Sundarban atoll will be homeless, victims of climate change.

It's only the beginning, and it's come much sooner than most scientists had expected.

This article has been relegated to the back pages of our newspapers. I have excerpted facts as reported in The Forward. Mainstream media takes little note, as does the general public, for a number of reasons. We cannot believe that a luxury ship such as ours, with all our wealth and power, technology and innovation, could be in real danger. We are distracted by all that we have, by all that we do. We are in opulent isolation.

Perhaps we believe that any substantial change will be hundreds of years off, this in spite of the fact that some very smart people, Stephen Hawking among them, predict that, in all likelihood, we may have to leave this planet within 30 - 40 years.

We can’t downplay our experience, however. The concerns that we have are real – we feel the constant threat of global terrorism, the realities of war. We must focus on our personal issues and responsibilities – the taxes we pay, the cost of our kid’s education, the quality of our lives. But we must prioritize.

There are many expressions that describe how we may go about our business in the face of imminent danger. Fiddling while Rome is burning would be one. My favorite is

"rearranging the deck chairs on the Titanic"

This is a moment in time which may be remembered as the beginning of the end, the end of civilization as we know it – a Waterworld reality show hosted by Kevin Costner.

But we can take comfort for the moment –

after all, the residents of the Bay of Bengal are third class passengers.

The Wal Mart Wiggle

The tipping point is here, folks. Sure, polar bears need life rafts in an Artic Ocean with no ice, and Iceland needs a new name, maybe Slushland, and wildfires burn out of control in over a dozen of our western states, and yes five of the last ten years have been the hottest ever recorded, but we have very encouraging signs of progress.

This year’s corporate fashion color is Green, and its made for some very strange bedfellows, folks.

The Wal Mart wiggle

Its everyday low prices and every night damage control for WalMart, the biggest of the big box retailers.

In what must have been a surreal experience, Wal-Mart Stores hosted former Vice President Al Gore at a conference Wednesday evening that the company said is the next step in its efforts to improve the environment.

In creating what they called the quarterly sustainability network meeting, (the word earnings was noticeably absent) the biggest of the big box retailers included Gore's presentation on the dangers of global warming, as well as one from officials of the Rocky Mountain Institute and not surprisingly, the Evangelical Environmental Network.

The meeting also included discussions with suppliers on how sustainability can impact the supply chain and benefit the customer. Unfortunately, suppliers who have been driven out of business were unable to attend.

"We are all passionate about making real progress regarding the environment," said Wal-Mart CEO Lee Scott. It was unclear whether Scott was referring to WalMart store environment, or the environment environment. He continued, “By working together, we can help each other save money, also reduce greenhouse gas emissions and pass the savings on to our customers. " Notice the order of priorities…

1. everyday low price
2. save the planet….

WakeUpWalMart.com, one of the company’s most vocal critics issued a statement saying it is skeptical about Wal-Mart's environmental goal. "While we are glad Wal-Mart is talking about environmental sustainability, Wal-Mart's long record of inaction and empty rhetoric leaves us deeply skeptical about Wal-Mart's true intentions," said the group.

I think WakeUpWalmart is being unfair. WalMart is changing…In response to the illegal treatment suffered by WalMart employees, they’re considering an innovative “Adopt a WalMart family” program, a unique way for WalMart customers to say thank you, for all the years of low, low prices.

As Americans, it’s the least we can do. Lets see every WalMart family with a lifetime supply of mac and cheese, and the trailer, paid for. And when that diet catches up with them, there’s always the Emergency Room paid for by you and me. It’s the American dream….

....its Invested Development

So as we zip down the Information Superhighway, every resource available at a mouse click, you would imagine that the internet is vastly expanding our knowledge. You’d be wrong. A study of Americans done by the National Science Foundation revealed an alarming lack of information. Fewer than one out of six Americans could define the Internet in their own words. Very few Americans could define what a molecule is, and slightly more knew what DNA is (probably from coverage of the O.J. Simpson trial).

Participants in the study were asked 20 questions to test their basic knowledge of science. More than 70 percent knew that oxygen comes from plants, that light travels faster than sound and that humans were not around during the age of the dinosaurs. But only 11 percent could define radiation, and only 13 percent could describe a molecule.

As a follow- up, our GreenAmerica staff tested the political awareness of 26 people loitering at the corner of Park Avenue and 33rd street last Tuesday. Twenty four individuals responded, (one woman accosted a staff member with her cane, and one elderly gentleman gave us a dollar and walked away).

The questions, although simple, elicited some alarming responses. Five individuals described Condoleeza Rice as a San Francisco treat, and three teens thought Kofi Anan, was the latest Starbucks blend.

In all seriousness, the general public's lack of knowledge is tragic, and it allows us to be manipulated. Less and less of us are reading newpapers, and certainly fewer of us tune in our radios. We watch reality TV, and American Idol. We can’t name our officials in Washington, but we follow the daily lives of Brittany Spears and Paris Hilton. An increasing number of Americans believe in astrology, and alien abductions.

Is it any wonder that in an environment dominated by the alternative reality created by television, we could elect Arnold Swartzenegger the Governor of California?

We’re fiddling while America is burning. Everything’s at stake. We do something, or its

Hasta La Vista, Baby

The Ultimate Gift

Welcome to summer in the city, it’s hot, its rained 4000 inches in June. I’ve always thought of the the 4th of July weekend as the official start to summer. I can imagine you’re loadin’ the kids in the car to head down the shore or out the island…..enjoy the beaches, if you can, some of them have been closed because of the complications of all the rain, does anybody notice that the weather seems to be just slightly more severe….But I digress…..

Ah, yes friends….lets imagine that you have a close friend, a great guy, really successful, a hard worker, a workaholic really, great family, just not that aware of what goes on in this world, because he’s got a narrow focus… its his business….ande its real easy to be unaware. We’re all so very involved in our lives, and our families, we can be isolated, and insulated from what goes on around us.

So you’ve got this friend, and you’re connected, and it has nothing to do with business, nothing to do with your mutual success. You share what’s really important in life, maybe you share a passion for bridge, your families vacation together. You’re good friends.

So one day you’re talking , and you share some information that’s important to you. You’ve traveled, and you’ve seen things. You’ve been to Africa, you’ve been to Asia. You start talking about what you’ve seen there, and you share a report that you’ve read on world poverty, released by the World Bank….and that moment, changes your friend’s life in a profound way.

Now imagine that your friend is one of the wealthiest men in the world. He’s Bill Gates and along with his wife Melinda, he goes on to create the largest philanthropic foundation in history. He and his wife dedicate billions of dollars to finding cures for the world’s diseases and improving the lives of people all over the world.

And imagine that you’re Warren Buffett, and you’ve just made an historic $31 billion gift to the Bill and Melinda Gates Foundation. The largest philanthoric act in history. One financial transaction that sets the bar higher than any of us had ever imagined.

There are much larger questions here. This $31 billion dollar humanitarian transfer calls into question the very system that made these men so wealthy to begin with. It acknowledges that our free enterprise system is flawed. It’s flawed because so many people here and all over the world are left behind.

Warren Buffett is the most successful investor in the history of Wall Street, but obviously he’s much more than that. He’s a simple man. Brilliant but simple. He knows how to buy companies that are undervalued. That’s how he made has money. Many of us have been disciples. And he knows how to cut expenses He runs Berkshire Hathaway, on a staff of 20. He and his wife still live is the house in Omaha, Nebraska that they bought for $31,500 in 1959.

He enjoys playing bridge with his friend Bill, and has invited him numerous times to his simple home. They enjoy vacations together with their wives.

What we now know about Warren Buffett is that this is not an extraordinary example of generosity. This is something that he realized needed to be done.

It just as important that we look at this as an act of great humility. Because Instead of creating a foundation in his name, he lets his friends, Bill and Melinda Gates run the show. That’s his gift to us, his example in many ways.

So lets look at some related financial news…

Warren Buffett doesn’t believe in inherited wealth. He calls heirs to the America corporate fortunes, the “lucky sperm club”. He gets it. These people have done nothing to justify inheriting billions. It was an accident of birth.

Now we see the battle over the estate tax heat up. This is a big one. As we speak, wealthy business owners, their controlling families and politicians are behind the scenes fighting to keep what they believe is theirs. They are wrong. The Walton family, owners of 40% of WalMart, with a net worth that approaches $100 billion dollars among them. A family who pays their employees $8.50 an hour, a family that doesn’t provide health benefits to its people. We provide those benefits. Our tax dollars support their healthcare… and they have the nerve to refuse to give back. The Waltons are one of 18 such families that represent injustice on this issue . Warren Buffet has embarassed them.

In the news, the extension of tax laws that favor the rich. The IRS in an act of incredible insensitivity, illegally freezes the tax refunds of 1.6 million of our poorest Americans. And now, with these sordid pictures as backdrop comes this wonderful story.

Bill Gates is a lucky man…and his most valuable asset is not Microsoft, its his wife Melinda and their 3 kids. She has been the driving force behind the foundation. Among her goals, an Aids vaccine, finding a cure for a world epidemic that is now decimating Africa, and Asia. The foundation has become active in micro-lending, the granting of small loans to poor people all over the world so that they can start businesses. Some of these loans, as little as $50, can buy a sewing machine or a loon, or a set of tools that can be the start. Melinda has helped Bill to realize what he owed to the world that gave him so much opportunity. That when it comes down to it, he is a steward, a guardian, a tenant here on earth, not an owner. That’s hard to get when you’re Bill Gates. That would be it. The one lesson we could all learn from this that would solve most of our problems. Be grateful, and show it.

Don’t underestimate how big this is for us. This is potentially a turning point in our history. Put simply this is the story, of two friends who happen to be powerful corporate icons, who remarkably recognize how wrong we have gone, and just may have the resources to change things. Or at least set the tone, set the bar. With Melinda Gate’s guidance they will wage the battle to find an Aids vaccine, an epidemic worldwide, they’ll wage a battle against malaria worldwide. Here, they create model schools in an effort to reform a failing American education system.

Now, we’ve got some momentum….recently released An Inconvenient Truth, Al Gore’s landmark documentary that shows us, irrefutably, that we must change our ways. A wakeup call.

Now we have another one. Today, there is much to be encouraged about….