Thursday, February 10, 2005

Governance, Sarbanes-Oxley And Value Reporting:

Governance, Sarbanes-Oxley And Value Reporting:
New Life for the Shareholder? or, a "Wink-and-a-Nod"

Ineffective Board representation combined with 'transition' into grand scale absentee ownership (investors who are indifferent about the nature of their assets, as long as it produces the desired return) has produced an amnesia with regard to risks entailed with management self-dealing. The other participants in the recent financial crisis have been the legislators and lobbyists, which partly produced the reason for the Sarbanes-Oxley Act of 2002 ("SOX"). Again, we seem to have the same culprits of previous financial failures, as demonstrated in the 'unintended' consequences of most of the S&L legislation. With respect to the success of SOX, prudence exhorts skepticism; perhaps board and governance along with educated 'owners' and other stakeholders may remedy agency self-dealing.

Further, those knowledgeable of the legislative process, as well as the forces that drive matters to the point where legislation becomes the result are asking was the SOX really the right answer? With Congress' interest to legislate corporate governance, accountability for internal controls, and firms which provide that and external reporting services, was SOX necessary federal legislation when the SEC could have had the Exchanges require any eventual compliance of its listed firms? Was it necessary to make into statute the practice of arm's length assurance and audit? Perhaps the 50 states should audit the companies incorporated in each one, looking for signs of malfeasance and negligence, rather than permit further federal encroachment into states' matters. I remain somewhat skeptical that more vigilant oversight wouldn't have been the appropriate answer at the board level of the issuers, at the accounting firms, and for their profession's code of conduct to remain fully respectful for the degree of integrity necessary to provide such services that fan the public trust, or cynicism and litigation. Perhaps without federal force, however, nothing would have changed, even though we should be concerned about what REALLY changed below the radar screen, and SOX's "unintended" consequences.

Congress hoped to subtly shed attention, and thus, blame from itself and its campaign contributing management and board cronies. With Congress typically passing management-cozy laws, in SOX however, the jury may be out still on management's continuation of its recent practice of battering the reporting model in order to self-deal and self-enrich. Between senior management certifications required under Sections 302 and 906, and discipline for improper influence on conduct of audits in section 303, management, auditors, and external reporting firms may find it extremely difficult to commit fraud and misrepresent the firm's performance. The Act is attempting to end to corporate earnings-gaming by requiring 'arms-length' practices for the reporting and earnings calculating via disciplining and diminishing the relationship between management and the public accounting firms. Additionally, SOX is repositioning a firm's relationship with the public accounting firms at the board level. In several other sections including Section 404, SOX also shifts internal audit responsibilities toward oversight of financial integrity, hopefully including a greater emphasis on the quality of the information produced from the internal reporting with associated controls, not merely auditing the systems to determine levels of functionality, which was formerly what the internal audit largely examined. Section 804 extends the 'Statute of Limitations for Securities Fraud', hopefully another way to mitigate corporate fraud (all above and following SOX references are cited from E&Y's "Sarbanes-Oxley Act of 2002 The Current Landscape (Rule Updates and Business Trends", as of 8/03).

Firms enjoy access to the public exchanges, however, and while listed to trade publicly, they are required to comply with the new legislation. With SOX eliminating much of the former permissibility to use the reporting model to contort appearances of financial performance (Section 401 is requiring complete, enterprise wide disclosure, linking with the SEC's Reg G (1/22/03) to prohibit presentation of misleading and inaccurate non GAAP reporting), this may be why management is seeking desperately to retain the use of free options and is attempting to have Congress force the FASB to withdraw pending GAAP to expense options as a form of executive compensation.

Evidently, SOX likewise is producing 'pressure' at firms such as Ernst & Young, which we see: "Following the passage of the Act (SOX), these pressures continue to mount, together with increased regulation, and a renewed focus on corporate governance practices and financial reporting integrity and transparency", found in the opus of E&Y's Rule Updates and Business Trends, "Sarbanes-Oxley Act of 2002" (8/03), a helpful document E&Y provides to summarize the sections of SOX.
E&Y and its peers have every ability to produce quality audit and assurance services to prevent misrepresentation, fraud, and piracy of every sort in public reporting, if they remain committed to the task. One sees this admirably demonstrated in the "Company A Cash Disbursements - Narrative", 12/31/03 (Audit/Control) checks and balances at the cash disbursements level. Perhaps not having participated in official audits, I also found impressive E&Y's Assurance and Advisory Business Services "Preparing for Internal Control Reporting, A Guide for Management's Assessment under Section 404 of the Sarbanes-Oxley Act" (0677), "Evaluating Internal Controls" (in 3 parts), as a part of E&Y's services to provide "comprehensive assessment and documentation of the effectiveness of internal controls over financial reporting" pursuant to Section 404 (0677, p. 2). Perhaps the control and reporting staff at listed firms should be required to comply with Continuing Professional Education in control accounting and financial reporting including new GAAP; professionals at the public accounting firms must meet these continuing ed requirements (0677, p. 14, "Whether the accounting department has processes in place to identify significant changes in GAAP promulgated...").

Although it should not surprise me, notwithstanding, I found the distinction made between audit and assurance services rendered by the public accounting firms to listed companies where E&Y indicates, "Finally, the project team needs to include in its understanding and evaluation the company's process for producing financial reports" (0677, p. 21). Was this responsibility overlooked before SOX, and now must be part of the check list of assurance/audit firm tasks? Perhaps a disconnect existed between the respective results of audit and assurance efforts, where one may attribute the disconnect partly to a management disrespect for the "Cost-Benefit Concept" that would avoid reducing difficult-to-quantify risks and the practice of 'old-fashioned' audit tasks (0677, p. 27). Sadly, the accountants complied. Hopefully, with the SOX created PCAOB, the accounting firms will find that they need to render superior, arm's length work (Sections 101 & 102, 104, and 108). And meanwhile, 'window dressing' comes to mind. E&Y Partners Haverstick and Ridder mentioned that internal audit responsibilities are shifting more towards oversight of financial integrity (Sarbanes-Oxley Act of 2002: The Current Landscape, p. 5, Section 302: Management Certifications Business Trends). From what are these responsibilities shifting? What before was so flawed about how E&Y handled these things, and how can E&Y certify systems as fool-proof and game-proof? Time will tell.

Not fully agreeing with Eccles, et al's premise that the 'reporting model' has failed, I absolutely support complete transparency, high-idealed board practices, and corporate governance that are fully accountable to the non management shareholder in every prudent way in order to eliminate the pervasive agency problem that has been abusing the stakeholders in public companies. Further, internationalizing the reporting model adds yet another element of distraction that management uses to self-enrich and promotes corporate colonialism; we need to deal with our US GAAP problems. Eccles, et al, also had mentioned three dimensions of risk that companies should answer in their financial reporting: what has management practiced to produce 'value', what practices destroy value, and what confidence has the ordinary investor to estimate the distribution of outcomes (Eccles, et al, p.145, 146). Although the authors have asked in the end something seemingly abstract, perhaps investors unconsciously ask themselves this by their 'investment' choices, such as choosing mutual funds.

Perhaps few investors really care about SOX, however, and the aforementioned associated efforts that we are making regarding increasing transparency and more effective governance. Perhaps huckstering the 'markets' as a 'safe' investment and as a proxy for savings accounts, but now attracting the same market gambling that previously found outlet at the race track has contorted the activity in the investment markets, coincident with this get-rich-quick mentality that is occurring in times of indolence which also promotes corporate interests and self-dealings front and center stage. Such speaks ill of our society, when commercial interests have gained the power and attention that they have. SOX will not solve any of this.

The authors give us the following past-as-prologue concerns. First, the authors state that boards must demand the necessary information (Eccles, et al. P. 239). Should we assume the authors are telling us that boards of directors neglected to ask for full disclosure and full transparent financial reporting from management? Or rather, why wasn't management giving the board this information?

Next, perhaps Shareholders' Equity would provide the better location for reporting of changes in Goodwill, as these fair value changes fail the realizable and earned tests for income statement reporting (Eccles, et al, p. 241, 242). The authors also discuss internet measurement standards for intangible items that need valuation for balance sheet purposes, however, which I would never include in the Income Statement (p. 261), unless these items actually earned realizable revenue.

Eccles, et al, further believe that Value Reporting Revolution can eliminate information confusion that seems to be causing battles among the users and issuers of financial reports (p. 249), rather than exposing management's interest to self-enrich, which in realtiy is producing the confusion. The authors fail to observe another associated factor which is management's desire to distinguish itself from the next guy, so as to gain the investors' dollars. It seems this is partly the undertow to the authors' interests and thesis related to finding the 'value drivers' of firm, including the Global Reporting Initiative (triple bottom line). In addition, the accounting firms should include in their audit report their insights 'about how to improve that performance" (p. 267) and charge for it accordingly. The auditors' job is not to advise management, however, and here the authors reveal their continued co-dependence to have some management level, value-added position that violates the arm's length, disinterested 3rd party rule, and exists as another part of the undertow. The authors err again when they smugly add that the industry 'expert' model has worked well for management allies such as the bankers and consultants, and that the accountants likewise can enjoy this (p.269, 270).

Without omission about the role of sell-side analysts, a respected utility analyst by the name of Barry Spenser (God rest his soul) once noted about this group, "Why do you think they call it the SELL side?" His rhetorical comment answered many questions related to the problems everyone else had with Wall Street and sell-side analysts. The public had failed to ask Wall Street about the truthful role of the 'sell-side' analyst, and wait for the correct answer; salesmen will tell you anything if they are permitted.

Andrea Psoras
Franklin & Marshall College
Bus481 Financial Reporting
For April 1, 2004

Friday, February 04, 2005

Constitutional vrs 'Free' trade (work in progress)

"Free" Trade - The Controlled Trade of the British 'Crown'

What is the history of 'free' trade? We can thank the British 'Crown' for 'free' trade. One conjectures the expression alluded to the lack of taxation on the "Crown's" imported goods, or perhaps where British ships were accessing regions typically controled by ships of other societies, and transporting 'free' of foreign involvement with those exported goods from those regions to Britain and British settlments.

The British in the late 16th through early 19th centuries had attempted to gain more access to, and control of trade in the regions controlled by other countries, this interest to control trade the British Crown-colonistic form of trade/commerce they labeled as 'free' trade. Even in and out of the American settlements as well as other 'colonies' of the British 'Crown', the British Crown wanted to control all trade including all transport of goods. The 'Royal Navy', conceived originally to pirate, then morphed to protect the British "Crown's" (commercial interests') trade from pirates, in time had greater ambitions and beliefs in its efficiency - its speed to transport goods. Reading Adam Smith's "Wealth of Nations" may remind one of his argument about enterprises more efficient than others at transporting goods in and out of foreign regions. Although some like to identify that part of Smith as describing 'comparative advantage', actually Smith was describing 'free' trade and alluding in this case without specifying some presumed 'techonological' advantage that British ships had over Spanish or Dutch ships, and so the British ships had a comparative advantage with regard to their speed than those of other societies. Identifying the terms and concepts becomes important in the slick double-speak that the commercial interests have perpetrated over the century or so including and since our Civil War.

While discussing the developement of the British navy, Andrew Herman's "To Rule the Waves: How the British Navy shaped the World" (Collins, 2004) reveals and describes the term 'Free' Trade, researches the British Navy's escort and armament of its trade vessels, as well as British Crown efforts to control trade in and out of its regions and colonies, including access to those of the other colonial powers. For this reason, he added, the British viewed Sam Adams and John Hancock as 'smugglers' because they opposed, and competed against the Crown's interests and efforts to control trade in or out of the Americas.

No wonder when we drafted the Declaration of Independence, we were separating ourselves from the British People, the British King/Monarchy, and the "British Crown", another lable for the British commercial interests, a number of which had financed and supported the founding of colonies in the 'new world'. In our Revolution, we were liberating ourselves not only from lack of representation and associated taxes when the 'Crown' opposed and rejected paying taxes to the King and told him to 'get it from the colonies', but we were shedding the British intent to control trade into our society. The British Crown began aggressive punishment and interference of, and against American merchants and their trade, while we began actions of civil disobedience and aggressive efforts to separate/liberate ourselves from virtually everything British and Crown.

Contemporary versions of colonialist Crown trade, commonly known as 'Free' Trade agreements, play on the ignorance of those from whom this back-to-the-future piracy is targeting- the means of the ordinary voter and shareholder. Academics of virtually all levels in the US ubiquitously teach 'free' trade as if it is THE accepted, unquestioned form of international trade and commerce. College economics professors teach that 'barriers' trade hinder 'free' trade. Over time, the prevailing, predominant theme regarding trade has become 'Free' trade, where 'experts' site it as the way for advancement, enrichment, and something we must embrace in what they describe as our 'democracy'. Nothing could be farther from the truth.

The British and the current 5th Column within the US, let's calls these the 'Red Coats' or the Red Coat 'Free'Traitors, meanwhile, condemn those among us who aggressively advocate we keep, as well as call for our public servants to keep the Constitution where we indirectly tax, ie, charge duties, tariffs, and excise taxes/customs fees - on all imported goods and I would include services. They condemn us as protectionists and trade haters or opposing trade when again, nothing could be farther from the truth. We are not a society with colonies - that for which the British Crown purposed 'free' trade to exist. The British hated our Constitution's prohibition of the British Crown's preferred form of trade, now painted to ignorated Americans to mean 'open' trade when 'free' trade disingenuously means trade to suit special, middle-man interests. The slam of protectionist/protectionism attempts to argue for something that our Constitution - our Rule of Law- prohibits and which the Constitution makes no argument or support for it anywhere, even though the language is loose in ARticle 1 Section 8. The Protectionist epithet is a typical slam of those resentfully disenfranchised and deceitfully attempting to control the playing field to advantage themselves. Tariffs on ALL imported goods, and I would include ALL services, discriminates against no particular import, with the result that open trade exists, while we have our quality of life encouraged and promoted while tariffs, etc on all sorts of imports encourages us to do business with each other, and broadly developing wealth throughout our society among all of us, without the interference, problems, the greed, and ambitions of foreign commercial and sovereign interests of other societies. Our free trade with former colonialist societies and their former colonies has bailed out those counterparties, while we have financed their socialism and welfare states.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~NAFTA.Last year marked the 10th Anniversary of the North American 'Free' Trade Agreement, otherwise known as NAFTA. In addition to the terrible consequences of the final and unfinished part of NAFTA mandating to economically integrate the US with Canada, less economically asymmetric than the US, but also with Mexico, not only different culturally, but a 3rd world country economically, with all the problems and failures of a cronyist, post-colonialist, deeply divided, class-stratified, sectarian society. Unless we repeal NAFTA as well as other free trade agreements, the future for the US domestic economy looks increasingly bleak.

Management and those facilitating middle-man interests including the financial press, sidestep, supress, or avoid the truth. Meanwhile, 'free' trade in general continues to erode our domestic commercial environment with experts monitoring the melt-down. Academics involved in developing NAFTA have admitted the more disturbing truth about 'free' trade: Clement's (1999), et al's, "North American Economic Integration" describes on page 12: "political scientists also have reason to be uneasy about NAFTA (as an illustration). They tend to view free trade agreements as a problematic issue for political candidates irrespective of their ideological positions, ie, free trade is usually seen by workers in developed countries (AND IN OUR REPUBLIC) as a threat to their economic security, especially during periods of stagnating wages and massive restructuring 'downsizing', as was in the case in the early 1990s" (that particular recession was caused by a Democrat-lead Congress and Reagan's 1986 Tax Act, which contributed to the 'thrift crisis' and the 'banking' crisis. Corporations took advantage to the recession to conduct restructuring and charge-off the expense for this during a time when corporations were already reporting lower profits. Those write-offs related to restructuring charges, coincident with the passage of NAFTA and may have been, probably were used to finance manufacturing investment in Mexico, hidden in the income statement in the restructuring charges taken in a slow economy).

Clement continues, "Nonetheless, firms <> especially those in high-tech, export-oriented industries, tend to support 'freer' trade and through lobbyists, wield considerable influence with political candidates, hence, politicians may well lose voter support if they support 'free trade' and lose campaign funding if they oppose it - a classic 'no win' situation. Nevertheless, some political scientists looking at (foreign relations) which have fluctuated widely in recent decades use (these agreements) a tool for 'normalizing' the channels of ...discussion... on a wide range of economic and political issues..." .

The Fraud of the "New Ecomomy" and its non union, younger work force. For example, the 'tech' industries such as Information tech, computer hardware and software and 'enterprise' build-out including the Internet technology are relatively 'young' sectors, have little in the way of legacy benefits costs, often employ younger people with fewer responsibilities, less risk aversity, and less interest in work security in this time in their lives, so they will take jobs with less benefits, lower (these jobs are usually non union) wages, and less stable than more established companies which populate our S&P 500 group of corporations. These people are more manipulated by the promise of wealth of exercising options in a 'rising market' and will trade a better paying,more secure job with better benefits for a promise through working for a company that unfortunately is validated by the deceitful, racist globalism ploy. Moreover, many of these companies avoid unions and so going forward, a different, cheaper employee cost structure exists for management in those sectors.

As the better paying, better benefits in jobs with S&P 500 companies allowed by Congress through tax treaties to flee to foreign shores, PNTR, bashed tariffs and duties, more publicly traded companies' managements presume they have their operating strategy mastered to the letter, and in foreign societies employ people not contributory to the development of the American 'Brain Trust', while also not employing Americans in America that contribute and support the US brain trust of engineers, other scientists and mathemeticians. Meanwhile, 'free' trade also produces that pervasive 'race' to the bottom condemned by Senator Corzine, and most evident in the developed societies and economies, while seemingly desired by the reductionist, colonialist minded, as illustrated by that 'German efficiency' one could argue as evident with the nazis, and thus illustrative of the '4rth Reich' influence on contemporary American commercial activity.

In a very innocuous, yet revealing way, the authors on this book on international trade exposed the heart of the matter... that Corporate Management wants free trade to suit their own pockets, regardless of their employees, and elected officials want the lobbyists' wielding campaign contributions from corporate managements looking to line their own pockets. THE TRUTH HAS NOTHING TO DO WITH (exporting ) DEMOCRACY, WHICH THEY HAVE TERMED TO BE SOMETHING FRIGHTENINGLY LESS THAN THE FRAMERS OF OUR REPUBLIC KNEW THAT WORD TO MEAN AND FOUGHT TWO WARS TO ESTABLISH IN THIS CONSTITUTIONAL REPUBLIC.

The ultimate waste of taxpayer moneys into management hands with much 'Free Trade' and the difference between our government gathering Constitutional taxes such as Tariffs, rather than having the Executive Branch take fruits of our labor with direct taxation aside from wage/salary/ and similar taxes, I would rather pay the Tariffs on imports I infrequently purchase so as to have back my salary, bonus, and returns from investments untaxed.
So, Qui Bono? The management interests paying their lobbyists, who make campaign contributions into political candidates and/or their campaigns benefit most from 'free' trade. Virtually always, management interests via lobbyists are looking for earmarked legislation that hammers down our Constitution, that pesky unspecified "barriers" to trade defined more specifically as duties, tariffs, and excise taxes coincidentally, indirect forms of taxation described in Article I Section 8 of our Constitution, our Rule-of-Law, and that to which our public servants pretend to take their oath of office to uphold. Note that the ordinary voting and share holding American is omitted as a benefactor, and actually indicated as disenfranchised, while lobbyists and corporate interests aggressively hammer down our Constitution so as to self-enrich and self-deal.

On what premises does 'Free' Trade exist, or "How-do-we-sell-this-to-the-huddled-masses"? "Comparative Advantage", and "an interdependent world" - double-speak expressions coined by economists and their corporate plantation masters, argue when a society has certain natural resources, these are its contribution back to the global economy. Those societies formerly under colonialism and in the reality of contemporary corporatism, meanwhile, remain subject to management and the developed societies attempting to pirate and control the world's resources for a select group. Let's call that group the 'Secret' or even the Corporate State, which never lets these commodity and/or 'developing' societies fully develop themselves to full self-sufficiency. An 'interdependent' world, meanwhile, in reality positions management - THE AGENT, THE MIDDLE MAN, to directly or de facto control everything. Recall the Middle Man, or the Agent, aka "Management" are those who originally were acting on behalf of the owners. Although the shareholders elect the board, senior management over perhaps the last 30 has controlled the nominating slate of directors - leaving the shareholders' representatives to self-deal and collude with management. With the past 50 years yielding an increasing number of non management, non-founder shareholders - uninvolved, absentee owners in the businesses in which they are invested via mutual funds, 401(k)s and other passive stock holdings - most fail to remain knowledgeable and active in the decision making of the company while also remaining ignorant and impotent in exercising more control left to the cozy dealings of management and their designated board of directors.

As a result, we see little arm's length decision-making at the board and senior management level, where the directors could mandate different operating strategies effectuated by management, including prohibiting management from siting abroad for the hidden agenda of accessing cheap labor regions, or hiring lobbyists and making large campaign contributions. As the American Wallet is the biggest and the most coveted by all global constituents, and our investment markets reflect this prosperity and history of abundance, management's disingenuous reasons for interest in foreign markets for their goods and services exists largely because via 'free' trade - import without Constitutional duties, tariffs, and excise taxes, as well as other taxpayer subsidized tax breaks, and programs in the form of 'export' insurance to insure payment to the exporter who may be exporting into regions incapable of affording the US good exported to it.

Both taxpayer and commercial bank funded, IMF and World Bank 'lending' into those vulnerable, often former colonial regions, frequently fund foreign crony purchases of those particular US military hardware and other trappings of western wealth, funds US corporate projects in those regions occurring largely to suit Western commercial interests in the resources in those regions while those indigenous peoples and citizens in those societies are left uneducated or under-educated, rivened with civil wars and other insurgent produced strife, etc.

So comparative advantage, as the reason for 'free' trade's argument by experts as benefiting the world, sadly prevents societies from self -sufficiency. The operative term in action acts merely as a source for cheap commodities and labor for managements' advantage.

The 'interdependent world' also parades its self as 'exporting our liberty', or 'we need to actively engage in the world so that they don't hate our freedoms', or so that they dont hate our 'way', or the most disingenuous - 'opening-up' foreign markets to our producers and goods. These deceits and frauds act as the mask of management's slick argument to cheapened the 'staff' and/or 'labor' costs on the income statement and pocket those cheesy labor 'saves', to continue to site abroad and shed labor unions which were/are a hated thing by the German and now American fascists whose influence on 2nd half 20th c. American commerce has come to us as the '4rth Reich' (Hartrich: "Fourth and Richest Reich" Macmillan, 1980, which describes German redevelopment there as well as here in the US after WWII, however, refers more to the deterioration of American private enterprise to a back-to-the-future mix of colonialisticness under the contemporized Anglo-American Crown). Compare the overlap and interaction of corporate interests with our elected and non-elected public servants, who appear to serve the corporate 'state' rather than we who elected them to represent and serve us in government. Management and the 'economy' operate above the law, while in reality, we even have the Uniform Commercial Code and state laws of incorporation to which Management and Corporate interests must answer, when they pervasively practice otherwise, let alone to force commerce to answer to rule of law we have with the Constitution. We are seeing cozy, crony-istic matrices which closely contemporaneously resemble the Nazi/german fascist state overlapped with British 'Empire', all largely achieved subsidized by the ordinary voters and non management shareholders.

How have we contorted our Constitution, where we seemingly have 'embraced' this disengenous form of commerce that not only violates our rule-of-law, but establishes a management operating strategy which is producing domestic economic deterioration, capital flight to cheap, labor regions to squeeze short term labor saves out of offshoring corporate offenders, and those saves when run through the income statement goosing it briefly for short term profits. Mexico and Latin America (NAFTA), now China with Permanent Normalized Trade Relations ("PNTR"). In this century, we could see it de facto with redevelopment of Japan, Taiwan and other previously cheap labor regions, be they former fascist societies or otherwise. Via the British influence in America after the 1820s, one could argue with De Tocqueville's analysis of 'Democracy in America', when he believed our lack of crime rooted itself in our pervasive practice and belief in Christianity and religion, perhaps where the faith in the 'Golden Rule', we could also source our prosperity in that conduct as well as respect and commitment to uphold the Constitution, including the indirect taxation and form of generating revenue for federal government described in Article 1 Section 8. With the American Revolution, the argument largely ceased regarding who controlled trade into and out of America.

At this point, however what occurred in American society that has given seeming impunity to corporate interests and their corruptions to operate above the law? We could begin with understanding the British Crown's and European banking interests' determination to re-control America. The British Crown produced the "Irish Potato Famine" and engaged in bringing the Irish to the States, which altered the demographics and cultural mix in the States at that point. Although some states had larger populations of Catholics than others, generally throughout society, education and literacy was high as well as commitment to American Government being to only government to which all Americans would commit, without acknowledgement of Roman Catholicism's seat of 'government' at the Vatican. The British Crown, in introducing what culturally altered the relative homogeneity in American Society, later, although abolishing slavery in Britain in the late 1830s, continued to advantaged itself with the use of Slavery in the American South, meanwhile perhaps continuing to use barter as its exchange mechanism in the trade it did with the cotton and sugar plantations.

Barter is an inferior exchange mechanism and economic model largely as it ties the weaker counter party to the more powerful counter-party, which isn't exchanging the money of account as the unit of exchange. Use of the money of account in the exchange for products liberates the receiving party to engage in trade and production/services with other counter-parties. It left the American South vulnerable to looking to maintain its establishment as its means for enjoying and establishing wealth when Lincoln and Congress opposed future slavery in newly formed states entering the Republic.

The British practice of 'Free' Trade failed to override our Constitution while we kept it, however, over the many years that our perhaps mortally wounded Republic never officially declared peace after the Civil War, which had us under a military provisional government, and it had/has left us vulnerable to the ignorance of the voter, the public servants elected and sent to represent us, but compromised in part as a result of the failure for Congress under the Constitution to officially declare itself in session on December 1st of every year, ANY YEAR, AS IT HAS NOT SINCE 1859, and has left control of the federal government into the hands of the corporate interests (Dessie Andrews It was this status in part produced by the British Crown and perhaps the/part of the Faustian pact to which John Quincy Adams agreed when he went to Britain to negotiate their back-off from supporting the South in our Civil War, which Lincoln produced in part when sending troops to force South Carolina back into the 'Union', then bringing opprobrium of the other southern states, which only THEN seceded from the "Union" to assist South Carolina when it was militarily punished. The northern bankers and arguably the foreign bankers and foreign corporate interests still financed both sides of the war, however, we became the target of the European and British Elites' fears and ambitions to end the American Republic, conceived in Liberty and dedicated to the proposition that All Men are Created Equal, that in this society, all men shall enjoy life, liberty, and the pursuit of happiness.

No imperialism exists in this Republic, no waste of voters' lives and resources, no federal assistance into private corporate fancies, interests, except for what appears to have been infrastructure development. Trade Promotion Authority and 'bi--partisan' ie, corporatist/ internationalist/ globalist domestic support among our public servants for 'free' trade and increasing statism we see illustrated forthwith. We must eschew every sort of contemporary colonialist/corporatist - 'shadow government' agenda which attempts and would disrupt our governmental system of Checks and Balances. Supporting 'Trade Promotion' formerly known as 'fast track', first gained during Ford's administration, then expired and re-proposed during the Clinton Administration (and as well as related 'trade' efforts such a NAFTA'S sister "Free Trade for the Americas") violate the system of checks and balances between the Executive and Legislative branches originally established in our government.

We should have cause for concern when Alan Greenspan, Colin Powell, and Charlene Barshefsky support Trade Promotion/Fast Track - and the umbrella Big Daddy - "Free Trade" - trade treachery and corporate management pork/welfare when one realizes the intentions. Although Ms. Barshefsky, Mr.Powell and Mr. Greenspan represent different constituencies, all share their membership in the "Shadow Government" and support corporate and special interests over those of the US electorate and the Constitution, and were not and are not subject to direct control by Congress and real scrutiny of voting citizens and Taxpayers.

Paul O'Neill verbalized their agenda to the Week end Financial Times, a London based daily financial newspaper - in its Saturday edition (May 18, 2001) Perhaps O'Neill thought only globalistic readers and the leaders who believe his comments are ambitious FT Week-end readers. Treasury Secretary O'Neill said that he wants to eliminate corporate income taxes, that the individual taxpayer would shoulder the heavier tax burden, the individual taxpayer now pays 80% up from 60% 20 years ago of 'income' taxes to the US government, and that able-bodied elderly can or should or would have to continue to work - as if in an adjustment to the current social security system. This is largely the shared agenda of Ms.Barshefsky, Mr. Greenspan, who calls us all 'consumers' and frets over the low savings rate, and perhaps even Mr. Powell, but time will tell.

Even Ms. Barshefsky and President Bush agree that trade 'endeavors' often are a form of diplomacy, and at a future point may become some sort of entry to treaties. This is actually a VERY backward way to conduct US State Affairs and Foreign Policy, as well as ignoring that Senate ratifies treaties, these which likewise it also negotiates.

Permitting the Executive Branch dictatorship, with only the President elected once every four years - this is THE TRADE PROMOTION PLOY - our public servants in the Executive Branch doing corporate management's job when the Executive branch negotiates corporate foreign counter-party relationships. Any allowance of the Executive Branch to develop trade and trade agreements, export licenses, and other US Gov activities with foreign nations on behalf of corporate management without any FINAL step-by-step oversight by our Legislative Branch -people who we elect every 2, 4 years THE VOTERS' BOARD OF DIRECTORS, primarily exhibits a group of people very absorbed with their own self-serving corrupt ends and desirous of its own agenda without the historical successful oversight, rather than historical respect of checks, balances, and responsibilities left us in word and THEME of the ideals embodied in the U.S. Constitution.

'Free Trade' and its bastard off-spring 'trade agreements', thus are management pork and thus are management pork and support more management dinosaurs than any subsidized industry. Free Trade does not benefit US citizens with lower prices, as management for themselves pockets the savings from: not having to pay duties and Constitutional Tariffs accompanying the imports, avoiding the higher US wage levels, where with 'free trade' the intermediary processes of US off-shore manufacturing and tax-havened enters without the cost savings passing to end prices and end users - the voters. The 'free trade' argument is to largely enrich management with the difference saved by eliminating Tariffs and duties while avoiding issues such as labor problems and commodities with environmental impact concerns. Meanwhile the national wealth is undermined and revenues to the government similarly are undermined from fewer tariffs and lower tax revenues from marginally and underemployed voters when the 'jobs' have been allowed to flee to tax havens and foreign shores via and into the corporate interests of those on the BUSINESS 150 ROUNDTABLE.

Another fantastic kudo for 'free trade' and supposedly 'trade promotion' also declares that it 'exports our democracy'. Trade promotion and 'free' trade no more exports our democracy than does exporting garbage and sewage for dumping. Further, the countries to which we allegedly are 'exporting our democracy' are corrupt, authoritarian/ totalitarian (fascist or communist), sectarian, class-stratified societies with national religions, whose people remain in virtually the same deplorable condition as they were 50 years ago, when many were under their former dictator or colonial powers and/or controlled by Roman Catholicism or some other national religion or national church.

This revisits another reason for the half-nelson propaganda to push 'free trade': many of the countries with which we are practicing 'free trade' are former colonies of developed nations and our corporations are merely replacing the former colonial powers that extracted resources and exploited the remoteness and underdevelopment of those regions and societies. In a de facto way, it puts money back into the hands of our allies by 'trading' and doing business in their former colonies. Our presence in these regions actually more destabilizes that stabilizes due to the instability and corruption in those rule of man governments combined with the nature of the 'development' in those former colonies: they had their own cultural development disrupted by European colonialism, and then again disrupted differently by US Corporate colonialism.

Results from today's corporate welfare in the States and its international version in the manner of corporate colonialism (ie,"exporting our democracy" - siting abroad to lower labor and commodities expenses to give short term boosts to operating revenues) in underdeveloped regions include: civil wars which arise over strife from valuable commodities or water. Thieves armed and funded by corporate interests disrupt people who farm their land in these rural regions to relocate themselves elsewhere,leaving the valuable commodities for exploitation by financial backers of the armed guerillas (or conducted through an 'Iran-Contra' strategy). The span of examples finds Africa on the extreme end, with Latin South America on the other, as well as the PRC included. It uses a more creative form of control and destructiveness, however, against its people moving in unsanctioned forms of liberty and against the interests of that corrupt totalitarian regime.(I opposed PNTR and the plane incident and the deals to securitize the sour loans of its corrupt, failed banks continues to vindicate my assessment of capriciousness and irrationality of that absurd, wasteful, and mad government. I find it worse, however when my government acts as foolish as that of the PRC's.)

We are seeing little more than contemporized, state sponsored/supported, ie - fascist state/authoratarian - (British/European) colonialism, and 'free' trade was among ITS chosen ways of commerce.


Exporting White Collar Jobs - earlier post

"Exporting White Collar Jobs"

I added this so that people could see the article. thank you for drawing my attention. Aggressively I have promoted and supported the keeping of our Constitution and committing to our rule of law embodied in it. As a result, I have maintained publicly aspect of our Constitution which in statutes uses against all imported goods and services the practice of duties, tariffs, and excise taxes.
The Founding Fathers who wrote our Constitution also signed the Declaration of Indpendence and believed in the themes of the Enlightenment, and practiced these here in the US. The use of duties, etc against imported goods and services means we were committing to the engagement of each other's efforts and contributions of their goods and services in our society. If the 'wealthy ' wanted to pay more due to the duty on the import, they had the ability, but at least we were developing each other and meanwhile developing the wealth of each other and of our society, ALL OF THIS BY THE COMMITTMENT OF RULE OF LAW TO US, AND TO EACH OTHER. We bought property, houses, invested, saved, educated our children, ourselves. the liberty to continue to access this ability and the econonmy behind it however erodes under the following circumstances.

Done on the backs of the middle class and those of what one might also say the 'underclasses' - 'Free trade' and one could include 'tax relief' and the current Administration's interest's for its cronies for 'economic stimulus' as it were, practiced by colonist societies (and one could add corporate welfare societies of various sorts) whose wealthy had reserves of commodities and resources outside of their domestic societies, and as a result wanted to be able to import those goods (and services) into the domestic regions without being taxed, tariffed on them, and for the people under the tariff/duty scenario, might avoid buying those imported goods/services and depending on the influence those 'wealthy' in those colonist societies had on their governmental leaders, be it King, Parliment, or unfortunately now in the States, on the Executive Branch and sadly on Congress, things and related matters of 'trade'/commerce, etc dissintegrate to this as described.

One in analyzing the European societies that practiced colonialism, but in general considered the 'old world' sees practiced strong social contracts in 'class' and 'social' stratification not known or seen similarly here in the States, but sadly existing more here over the years. The people in the old world were and to a degree today are treated poorly by the upper strata in those societies, and when one understands the development of the 'welfare state' this can only exist with the favor of the wealthy and upper classes which have power with the governemntal bodies. Some demonstration of social along with financial committement to society, such as universal health care and/or retirement exists and at great expense under their tax scenarios; such actually disserves not only those in all levels of societies, it makes their companies more unbalanced with the levels of taxes they have to pay to support their welfare states, and resent in 'global' market place not having more for their managements, and higher profits to draw 'money-minded' and 'mercenary' investors.

So elaborate and carefully crafted arguements, etc management produces to the investment community to appeal to their 'wallets' to buy shares in those companies, while management is practicing its own economies by siting in cheap labor regions, passing some of the gains through the income statement to the pretax profit line, while pocketing the rest in what ever way they can. Salaries are above the taxline, and so this is the part of the Bush administration's interest for itself and its cronies' pressure on our Congress for tax cuts, and pressure on our institutional investors to be patient for profits being cultivated in cheap/slave labor inclines costly to establish however in other ways to themselves, and those expenses too are above the tax line , thus increasing pretax expenses and reducing profits. I ONLY SUPPORT AND REMAIN PATIENT FOR PARADIGM CHANGING RESEARCH AND DEVELOPMENT at this point. ANY CORPORATION PRACTICING SITING AND PRODUCTION/GOODS/SERVICES IN CHEAPER INCLINES, I REJECT AS AN INVESTMENT due to the social upheaval and disuse/decay of our most valuable natural resource, our own people and our brain trust and its development at present and for the future.

At first, with the fascists and their influence - these hated and continue to hate the unions, because the fascist types read 'communism' into unions, and resented sharing any wealth with the 'little people', especially those who had the guts to stand up to management which orginally in the societies that at one point were the owners who didnt want to share, except what they wanted to or had to share to keep competitive, and over the last 50 or so years have had most recent influence on our management practices in the US - initially sited in the US in non union regions such as the south and West. US management in turn are now generally responsible for the mercenary and 'globalist' interests of corporations mostly owned by American institutions, endowments, and foundations.

These globalist managements pay/say EXTRAORDINARY sentiments and notions about developing regions and peoples outside of the US and one could include the rest of the European/British 'Western societies', including Australia, New Zealand, And Canada. Notwithstanding the complete financial meltdown it means to the laid- off ordinary voter/ employee, and in time erosion of society due to violation of RULE OF LAW, then similarly reflected in the grand scale commercial meltdown and financial/economic disease is today where we are, with promise to get worse if people don't start to vigorously oppose free trade and this bogus 'economic stimulus' package, as well as the corrupt expenditures of this administration.

WE must! WAKE UP AND SEE THE FRAUD, HOWEVER SENTIMENTAL AND EMOTIONAL MANAGEMENT MAY PAINT IT, but it is complete and utter drivel, incredibly self-serving and only profitable as long as the Voters/taxpayers continue stay brainwashed, think that management and the 'think tanks' know best and continue to think in that dumbed down, little people mentality - generally alien to early post (American) Revolution society - now sadly which seems to support, and swallow the lies of 'free trade' now maintained by not only management, but also by the 'think tanks' and sadly now our Elected officials who are violating our Constitution and in turn, the public trust by engaging not only the corruption of partnering with the corrupt, and anti-Republic interests of management, but also with those who have power behind it and are looking to have more power and control over society - relying on these for campaign contributions.

Business - Investor's Business Daily Thu May 1,10:15 AM ET
U.S. Financial Firms Bank On Shipping Much Office Work OverseasBy Doug Tsuruoka Tough times are driving U.S. financial services companies to have more office work done overseas. So says Andrea Bierce, a director at consultant A.T. Kearney Inc., a unit of Electronic Data SystemsCorp.

Bierce says banks, brokerages and insurance firms find it's cheaper to have back-office work like accounting and employee benefits done in nations like India and Brazil, where wages are lower than in the U.S.

Tech-savvy workers in such areas process, check, calculate and enter data. They send the data back to the U.S. home office via the Net.

Some firms also are shifting call centers to countries with English-speaking populations, like Canada, Ireland and India.

Sometimes U.S. financial firms open their own offices abroad. Other times, they farm out the work to an outside vendor, an approach called offshore business processing outsourcing.

"Financial companies say they're saving up to 50% on their data processing costs by going offshore," Bierce said.

Also pushing the trend is the availability of faster Internet connections and lower telecom costs in these countries the last few years. Bierce recently spoke with IBD about the trend.

IBD: Are lower costs the only reason U.S. financial firms are shifting office work overseas?

Bierce: No. A recent survey by A.T. Kearney showed 93% of respondents said it was to reduce costs. But 64% said it was to increase productivity. And 42% said it was to enhance service quality.

IBD: How big a role has the Internet played in getting U.S. financial firms to use offshore business processing?

Bierce: Increased Internet load capacity and other improvements in digital technology have made all the difference.

IBD: What types of work are being farmed out to offshore firms?

Bierce: Until recently, many offshore relocations were limited to data entry and transaction processing. But more players are moving a wider range of functions overseas. They include call centers, human resources, benefits management, finance and accounting, operations support and customer service.

IBD: Can you give some examples?

Bierce: Sure. General Electric has 5,000 workers in five locations in India. They started basing some of their back-office work in India in 1997. They plan to have 20,000 people working in the country by the end of 2003.

(Insurance company) AIG has offshore activities in the Philippines, Ireland and China.

IBD: What other U.S. financial services are part of this trend?
Bierce: American Express and Citibank are doing finance and accounting. J.P. Morgan Chase and HSBC are doing operations support and analytics overseas.

IBD: How much money are they saving?

Bierce: GE says for every dollar they spend, they save a dollar.

IBD: Aren't labor costs rising in countries like India? Won't this drive up costs for offshore business processing?

Bierce: A recent A.T. Kearney study shows labor costs to run a call center in India have increased 11.5% in the last three years. Total compensation for a software project manager has increased by 8.7% in the same period. However, when you offset that with reduced telecom costs and the fact that salaries for Indian labor are still so low, moving offshore is still an outstanding opportunity.

IBD: How far have telecom costs declined in some countries?

Bierce: Our research shows telecom costs have decreased by 30% in India the last three years. This is because of supply and competition in telecom services, market liberalization and privatization efforts.

IBD: Are U.S. financial firms worried their intellectual property and data security could be compromised by relocating some functions to nations like China?

Bierce: The privacy and intellectual property issues are two of the biggest deterrents for companies looking at China. But there are ways to offset the risk.
We know of a (foreign) insurer that does some of its offshore processing in China. This insurer offers policies to U.S. companies coming into China that protect them against infringement of intellectual property and breach of customer privacy. These policies help others mitigate the risks.

IBD: Has the war with Iraq (news - web sites) and 9-11 caused some companies to think twice about shifting office work overseas?

Bierce: The war in Iraq has slowed some of this activity. So has the outbreak of
SARS (news - web sites) (the severe acute respiratory syndrome virus) in Asia. But offshoring isn't a short-term strategy. It's a long-term strategy to fit a company's global business model and business strategy.

IBD: Can technology make it safer for a company to move some office functions overseas?

Bierce: Yes. Disaster recovery and business continuity planning is a big help

----- Original Message ----- From: To: rumormillnews@yahoogroups.comSent: 5/2/2003 11:01:08 PM Subject: [RMN2] lets see how fast we get support now!!! you white collar were laughing or just thought to bad for blue ...lets see how fast shit fly now.....your turn


the internet and the PRC

I've hated our involvement with the greed-hegemonist chest-beating, ambitious, capricious, bloodyminded tyranny in the far east..... errrr, our 'strategic partner' in the far east by the name of the Peoples' Republic of China.

I vigorously opposed PNTR with the PRC and figured its disidents knew it for what it is, a lying, capricious, ambitious society viewing us as inferior, and we have been greedy fools with regard to our interaction with the prc, and keeping our profits there, viewing this as 'tribute' from an inferior people.

Few americans realize this was an absolutely foolish relationship with which we engaged, and although Stoessinger while at RAND exposed the PRC ("Nations in Darkness: China, Russia, America, 1970) for what it is, he left open the question if we should engage with the PRC. 2 years later Nixon and Kissinger went to China.

In a discourse in 2001 I had with PriceWaterhouseCoopers' top engagement partner who had returned to the west after being in the PRC for 5 years, we agreed on every one of my talking points which noted the sad and reasonably transparent truth to which he somewhat spoke and to which he agreed when I pointedly exposed the reality of our situation in the PRC. As a brit and with business being the business nazi/fascist policy of life as many of the elite (and contemporary "Crown") brits are so slick peddle, he believed in spite of the very bad news we discussed at the Union League club to a Foreign Policy Association gathering to which he spoke, we should engage with the PRC because, in effect, it's so big, when most of it doesnt really count for anything in comparison economically to what americans can do, and far less there count with regard to their wallet and voice than here... and for all the reasons - all actually quite negative - to which he thinks we should engage, to the contrary I think we should cut our losses and retrench domestically.

We're the biggest wallet in the world of which EVERYONE wants a piece. so if we are our own biggest wallet, we need to keep it for ourselves, re-establishing our own wealth, building up each other....this is part of what made us great...and as william penn believed, no man got wealthy alone... we are not for people who think us inferior, and that our commerce there (in the PRC) is tribute to them that they keep when they are violating contracts by doing such...

this all is a long, longer than a soundbit, newsday post.

our corporations early on had large losses there when we were looking for china to be an end market for our finished goods. we got hosed with the taxpayer and the nonmanagement shareholder eating the losses, while management and the prc boogied with our money....


so we are building china, we are what makes that place hum with all of their cooly labor. but it's our taxpayers and americans buying cheap cooly produced goods that verves that place.

we need to stop vote american with our wallets and follow our Constitution and hit all imports with tariffs, duties and excise taxes. Art1,Sect8 of our Constitution. there is no argument for 'free' trade in our Constitution, even if one wants to parce it loosely.

this is a major soap box for me, but i warned mccain and the others to oppose pntr with the prc.. and mccain and the others thought it a big deal about the internet there; that the internet was 'freedom' there. and notice our elected public servants seem to prefer the word freedom to the word liberty which suddenly george bush seems to fancy. what's the scoop? I noticed he is also using the expression of ownership... as this new back to the future old piracy policy about social security into the rigged markets to line wall street's and corporate cronies' pockets.

delay, who i met at the convention in philadelphia in 2000... and when i had the opportunity to ask him why when he'd first opposed pntr why he sided with clinton about pntr, he said he went to china and saw all those entrepreneurs -and i saw this glow in his eyes.. i felt a little pity for him and knew what had hit him while there... I knew they targetted him for an OP, psi coolaid of the mindcontrol sort and that was it. they marched him around all those 'entrepreneurs' that the goons in the prc leave to act as some head fake and front of a developing 'market' economy so as to fake out the west....and he was unaware of what hit him and he supported pntr... i was glad to hear it for myself from the horse's mouth, and actually glad to meet him.

but if mccain thinks the internet is going to bring down the tyranny of the prc, what goes around comes around, and the internet will bring down the tyranny here.

why do you think tenet and wolfowitz think the internet here should be controlled? because people like me and the cia perp who feeds me info - often lies, but sometimes some workable info that wasnt anything that i wouldnt have figured for myself, or already knew but the perp and those on his end reminded me.... but when I emailed that tenet was with the cia from the beginning while the trade center was being packed with explosives i think which began during clinton's admin... and notice during the clinton admin, his cia director was changed 3 times. i think.

what a way to delay an op on your watch if you're president of the united states... change your cia director or let him get changed. i think clinton knew pnac, et al, were attempting to pull off the 911 op during his watch and he has contempt for the ordinary american, but thinks more highly of his legacy and his wife's future than he has contempt for the ordinary american and ambition for the new world order and the zionista/neocons and their creepy 4rth Reich cabal.

but the point of this email is that done in this realm what one sows, one reaps. if one lives down in this realm, one will be subject to it. and if they are hoping the web produces a change in china's government, they need to look at the bodies in their own back yard, such as the blood on the hands of the bushteam and all the dems and gop who are accessories or conspirators to the treason on 91101 at the wtc,not to mention the years of treason with the zionist israelis, the elite brits, the EU bilderberg arm, the money changers and soothsayers here and abroad on our wallets and on the ignorance of the ordinary american.

til the next time,
Ben Franklin Republican,
aka Andrea Psoras.

ps, Going forward, I will post what I have been promoting and crusading for years, and will respond as I am able to comments.