"The Paradox of Power" by Michael Crosby

“The Paradox of Power” by Michael Crosby

Michael Crosby has become famous by virtue of his being a Capuchin priest who often gives workshops to business people. “The Paradox of Power” is essentially built from his presentation on the power which can be both positive and negative.

In summary, the destructive aspects of power come from the need to control the other. Unless we can be open to, caring of, the other, it will impossible to transition to positive power.

I admit to seeing my problems more clearly. Given that I tend to be opinionated (not a problem in and of itself), I see that I am not open to the other who does not share the same view. While there are many examples, I share two:

Especially when I functioned as a priest, I had strong opinions that the Catholic Church was basically missing the point big time. My problem was that I was angry to the point that those who differed with me, did not hear me out. The same type of phenomenon occurs when I share my opinion of Bush. My lividness gets in the way when I am with someone who does not share my view.

It is hard work to be so open to another when what they say, believe, or do is diametrically opposed to my own way of seeing, believing, and doing.

The book is most worthwhile as a review for anyone who notes that they could possibly improve their interpersonal relationships.

Capitalism Transitioned into Government Ownership

Over the years, I have often taken the position that I was more a socialist than a capitalist, that I treasured more the way European and Scandavian nations dealt with the social aspects of the economy, whether health care, day care, access to education, systems to avoid outright poverty. In none of these conversations did I ever envision the government nationalizing our major banks!

And yet today, the Financial Times argues that we are seeing the phenomenon of the governments of the United Kingdom and United States nationalize the banks. The amount of financial intervention is virtually unprecented.

It is hard to believe that the most anti-capitalistic intervention is being spawned by the unregulated markets that have dominated our economies. It is a strange outcome indeed!

The Ponzi Scheme: Credit Debt Obligations & SWAPS

Not everyone in my household agrees that the Credit Debt Obligations (CDO) represented a huge Ponzi scheme, but now I have Paul Krugman agreeing with me. I feel somewhat vindicated. However, I admit to my filial advisor that these financial instruments were not technically a Ponzi scheme since there was no intent to defraud. I admit that! But, the outcome is essentially the same as the Ponzi scheme.

In an article regarding Barney Franks, Maureen Thacik reported that the credit default swaps reached $55 trillion when everyone was aware that housing prices were not holding. As she quoted Barney Franks: “These people insure so much money … that they now owe more money … than there is money!” What a disaster!

While talking about this fiasco while celebrating Thanksgiving surely mixed negative and positive feelings, it surely remains an interesting topic for discussion! No one (apart from Krugman) seemed to be aware of problems before they emerged tout de force! Now we are all becoming students of an aspect of economics that most majors in economics never discussed.

It is interesting that there have been four major financial crises in the last couple of decades: major hedge fund collapse, savings and loan banks failure, internet bubble collapse and, now, this crisis which seems much more problematic than the rest combined.

If there is anything to be learned, it seems that anyone should be suspicious of anything that smells like a bubble. When things seem too good, they are!

"The Powers to Lead" by Joseph Nye

After reading his prior book, "Soft Power", I became a follower of this man's thoughts. He seems to be able to see the multiple sides of power as it works within organizations, governments, and nations.

In this new book, he tries (successfully) to fill a gap in the literature. While there is much written about the qualities of leaders and their psychological makeup, there was not much that deals with the various angles of hard and soft power as used by those in leadership positions.

This book does not lend itself to easy conclusions, especially since he emphasizes the contextual nature of the appropriateness of one type of leader within a set of specific circumstances. In short, the book is very relevant to someone young enough to know that they may become a leader so that he/she will have a broad understanding of leadership.

Problems with Restoring the Economy!

While I share the hopes of many that Obama will be able to right the ship in a few years, I am aware that there are monstrous hurdles to overcome. Mistakes are inevitable, given the vagaries of how the economy works.

It was interesting reading how FDR's reported success in dealing with the Depression was less that uneventful. A review of his "errors" will help to moderate any exaggerated hopes, but it also offers support to the notion that his economic team will be more aware of the strategies that will lead in a positive direction.

I always promoted the notion that we were not doing well in terms of providing a nation that would serve well our children and grandchildren. I was concerned about the inequalities between our nation and other nations, the inequality within our citizenry, the drastic gap between pay for CEOs compared with employees, the misuse of fossil fuels, the drastic disregard of the earth given to us as a gift. I am living long enough to see some of the consequences with a more selfish attitude rather than one that fostered a notion that we are "children of God" and brothers and sisters in world that we need to love together if we are to sustain ourselves.

We can only hope that the present catastrophic economic collapse will restore those behaviors that will promote our collective well-being!

"Mayflower" by Nathaniel Philbrick

One of the joys of retirement is time to read historical works that captures some of what I missed in my younger days.

"Mayflower" has been well received by many. Suffice now for me to share those little points that represent "new" knowledge for me:

1. I was impressed with the number of different Indian tribes that were present when the Pilgrims settled in Plymouth.
2. It was interesting that the Indian and English was unable during the first several decades to learn how to catch the plentiful fish in the ocean. The Indians did better catching fish that migrated in rivers.
3. I was impressed that many Indians learned English.
4. If not for land issues, the lengthy period of positive relations between the English and Indians would have continued. It was only because the Indians "sold" so much land that they felt forced to fight the English to regain some land. It is hard to imagine that such "scarcity" of land with so few people. But the difficulties of farming, e.g., fertility of land was short-lived, much land was wooded and not easily amenable to farming.
5. It appears that the English were more brutal in conflict than the Indians, or at least, they surely provided incentive to counter the cruelty they experienced.
6. The religious leader of the Pilgrims warned the settlers that violence begets violence. What the Pilgrims did not recognize, subsequent generations also failed to recognize. As experienced in Iraq and Afghanistan, violence begets violence.
7. It was amazing to think about the distances that they traveled, whether by foot or horse.

Good Bye to Bush!

While I have been repulsed by the Bush Administration, I am not sure that I have the heart to go through all the reasons why! They are countless and very disturbing.

Being somewhat faint-hearted, I take refuge in someone else who writes with the vigor I feel and the patience to enumerate all the terrible deeds of the Bush administration.

With many others, it is a terrible legacy he has left to the rest of living, especially those young enough to have to bear the burden even longer than those of us who are already old.

P.S. I am about to demonstrate how angry I am about Bush by sharing a list of things that Bush could admit as regrets, in addition to the two he was willing to mention. The list could go on and on, but at least I see some humor in some of the items!

Universal Health Care: A Near Future Happening!

While somewhat optimistic that some form of universal health care would be enacted within the first term of Obama, I was taken by surprise that Senator Backus is proposing today his own plan which is compatible with plans of Obama and Kennedy.

I would not have been so pleasantly surprised if I had not read
how central this senator is regarding any piece of legislation involving funding. As Chairman of the Senate Finance Committee, he is critically important for any legislation requiring expenditures of federal monies.

With Senator Backus now coming forth with his plan, I can rest relatively assured that universal health care will be passed within months.

"Big Picture" of Nation's Economy

Michael Porter (Harvard Business School) is famous for his work on strategies designed to improve business competitiveness. His recent article in Business Week provides a tremendous overview of the issues that need to be addressed if our nation is to achieve the level of competitiveness that was true in our past and has been declining in recent years without any evidence that the current trend will cease.

Since he is focusing on strategies, he is advocating less for a specific set of responses as much as a serious, public dialogue about the issues in order for us to prepare for long-term goals. While concurring with the need to address our current crisis, he emphasizes that nothing done to address the crisis will prepare us for the long-term.

Rather than rehashing his arguments, I share my enthusiasm for promoting such a conversation.

I have been intrigued with the plight of the automobile industry. While it is clear that the leaders in Detroit have lacked foresight by developing products useless for today's needs, I am not sure that benefit would be gained by the current discussion of infusing more federal monies into the industry. I (with others) cannot see how more money will help the industry. I cannot think of how the current set of parameters in the industry, e.g., unions, benefits, retirement obligations, and questionable expertise, will allow the US car manufacturers to make products that will be profitable. In short, I think that we have to let the entire industry fall in order to allow others to take over, even if it means that (1) US will have to pay for the obligations incurred by the industry, e.g., retirement pensions, and (2) the manufacturing plants are taken over by "foreign" manufacturers who know how to produce products that will be profitable and energy efficient.

The implication in my conclusion is that I have established in my head a series of strategies that need to be employed, e.g., we need some sort of universal health insurance so that our products will not include such costs, private pension plans have to avoided while requiring employees to invest in 401 Ks, high fuel mileage will be rewarded by some sort of tax credit system to offset costs of new technology.

His article is breathtaking in its implications.

P.S. Tom Friedman wrote a scathing column on GM today that came to a similar conclusion, albeit in a different form. He is recommending that any bailout comes with the stipulations that the board of directors be replaced a receiver capable of addressing the requirements of innovation, tear up all existing contracts (including those with the union), and declare all existing shares worthless.

P.S. David Brooks today (14 Nov) addressed quite well the plight of the auto industry and focused appropriately on the need to let the American auto industry, as we have known it, die. Be assured that autos will be built by someone who is capable to making a profit with cars wanted by the public.

P.S. Here I am on 22 November writing that the strong opinion stated above is being roundly refuted by so many as irresponsible, given the general economic picture. Maybe if the auto makers in Detroit were in the same situation in a generally strong economy, letting the corporations go bankrupt would make sense. But, in such a dire situation as we face, it was would be disastrous.

I can understand why it is necessary to secure the industry, but I hope that they come up with a plan that makes some sense. Everyone agrees that the projections are that the $25 billion will be gone in the spring. What next?

P.S. Now on 23 November, there is a great article advocating bankruptcy as the best option of the car industry. Bailouts for the steel industry did not work. Only when they went under did they really restructure and become profitable.

This is truly complicated!

Conviction over Resistance!

Ever since Howard Dean was selected as the Chair of the National Democratic Party, he made it clear that his strategy was to involve all 50 states, regardless of how their voting patterns appeared. He took much abuse from leaders in the Senate and the House (including Obama's newly selected Chief of Staff). As it turned out, it surely was the right strategy and helped elect Obama as our next President.

It is not often where such conviction turns out to be successful. However, when it does, it helps the rest of us to know that it is important to have convictions worthy of the effort required to resist those who oppose them.

"TheTrillion Dollar Meltdown" by Charles Morris

While I have been reading as much as I can regarding the economic situation facing our nation and the global economy, I admit my general ignorance regarding much of the economy, especially the highly sophisticated methods for leveraging capital and minimizing risks.

In my attempt to be more informed, I used Charles Morris as a guide. Granted that I still did not understand everything, I did get to the point where my general understanding improved.

It helped that the author is generally biased as I am regarding the need for more regulations and capital backing of leverage options. In general, for those who know in the ins and outs of the types of transactions that have got us into trouble, this book may be unnecessary. For others, I would recommend it for its general clarity and straightforward prose.

"Seizing Destiny" by Richard Kluger

Richard Kluger’s highly researched history of our nation’s growth from the few colonies to claiming the entire swath of land between the oceans and other territories as states (Alaska and Hawaii) and more nuanced relationships, e.g., Puerto Rico and Guam is a serious claim on anyone’s interest in knowing how the process developed. Admittedly, it was a hard book to read but it accomplished its goal of tracing our history relative to land acquisition.

From the title, “Seizing Destiny”, the reader understands that the peoples of the United States understood that they were destined to own what others had. We saw that we were special and would use the land appropriately, in contrast to the Native Indians and Mexico. In a sense, President Bush’s insight that our nation would change in the Mideast into a democracy is aligned with this historical vision.

The other aspect of the advance of our people to lands owned by others is that we were less than honest in our negotiations. Again, one wonders whether anyone learns from history, Dishonesty has been ingrained in the Bush Administration.

What to Do?

Now that Obama has been elected, there is clearly a scramble on to identify what actions should taken and in what priority order. Commentators have warned about the negative consequences of over-reaching too fast. And yet, if action is taken early, then the timing of the next congressional election in 2010 will become a relevant obstacle to passage of legislation.

If I were advising Obama (wow! what a head trip that is!), my recommendations for the first six months would include the following:

• devise a stated plan to conclude our military involvement in Iraq and Afghanistan. I realize that Afghanistan is quite different than Iraq and Iraq is by no means without potential collapse, but the need of setting our a plan for our withdrawal is important
• a stimulus plan that would address the needs of our infrastructure and energy requirements, even if it puts us further in debt
• universal health care (realizing that Obama never promoted “universal health care. I am hoping that Senator’s Kennedy’s work underway will result in legislation that can be acted upon within six months (before his death)
• a set of regulations dealing the financial industry that will make matters more transparent and ensure that leverage will be appropriately capitalized.

As Maureen Dowd wrote today,

Obama may be in over his head. Or he may be heading for his own monument one day

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Andrew Bacevich: A Man to be Treasured!

First, a comment regarding Professor Bacevich. He is a West Point graduate, received a Ph.D. from Princeton in International Affairs, retired from the military as a Colonel, and has been on Boston University's faculty for some years.

He was an early critic of the United States' invasion of Iraq and continued his writing even when his son enlisted in the military against his father's recommendations where he was killed. Professor Bacevich has recently written "The Limits of Power" which articulates a more sensible use of power in light of the horrendous consequences often associated with its use.

As a general theme, his thesis is that the policies of the United States tend to be imperialistic and hegemonic in spite of our stated reasons for its use. He argues forcefully about the necessity of realizing the inherent limitations of power, that its use often results in counter measures, e.g., counterinsurgency witnessed in Iraq, Afghanistan, and earlier in Vietnam.

Recently, he wrote about the impact of the nation's mindset on national policy. In this sense, he is stating that many (not all, e.g., it is unclear whether the people would have supported the Iraq invasion if they knew the merits of the arguments put forth by the administration) of the nation's interventions were supported in advance by national opinion. Many examples are cited. He concludes with the observation that the nation now wants a more limited approach to foreign policy.

Today, he writes that Obama's election signals the end of a foreign policy dictated by religious ideology. He references the famous theologian, Reinhold Neibuhr. who guided the thinking of many of our statesmen who advocated a more realistic foreign policy. Neibuhr recognized that the world was influenced by the effects of Original Sin, i.e., nothing done is immune from some evil implications. The use of power is inherently abusive, even when necessary. The need to constantly weigh the "need" to use power against its inherent negative consequences is lost when religious ideology creates tunnel vision that excludes the complexities of international relations.

Moment for Tears!

One would have to be the world's worst cynic to not be moved to tears to witness the first Black American become President of the United States! I have been moved to tears many times by Obama. Last night was no exception.

To think that I lived long enough to at least get to this tremendous milestone of seeing a Black man become President! To see a Black family in the White House! For all the years that I promoted civil rights for all peoples, this represents an unbelievable moment!

While it can be argued whether we are in a post-racial period, we are witnesses that we are at least making real progress. We may have miles more to walk, but the distance is much shorter. And with last night, we may have crossed the biggest bridge yet to the time when prejudice will not color our nation!

Election Day!

It's here! For so long and too long, we have witnessed an extraordinarily expensive election process that has become at times very entertaining and, at other times, exacerbating. It surely has been historic for the involvement of minorities and females as contestants for major offices.

My bias is long-standing. I thought that Obama would be a great, great president from day 1. I have not changed my views even when I wished he had been more specific about his plans for the future. However, I understand that too much specificity is no way to get elected!

I do think that Obama is our best hope for improving our standing in the international community, for restoring some sanity in our domestic policies impact our citizenry, and for presenting to our nation a person (and family) that represents the best of what we aspire to be.

I realize that at this very moment, it is unclear who will win. Enough has been said about the possibility that McCain could win, if certain states frustrate the pollsters. Surely, I will be one frustrated and disappointed person should such a scenario prove to be true. I will be disappointed again in the American electorate, as I was when they elected Bush not only once but twice! I will be amazed how so many could be fooled by fear and prejudice. But, our democracy does work by counting votes, state by state, to determine a winner.

May this day end with the election of Obama!