Thursday 30 December 2010

How to Making Money



"Being good in business is the most fascinating kind of art," Andy Warhol famously said. "Making money is art and working is art and good business is the best art." Having gotten his start as an immensely successful commercial artist selling product illustrations to advertisers and department stores, Warhol bent the American consumerist system to artistic ends throughout his career -- embracing capitalism at a time when many in the creative sphere viewed it skeptically, if not with outright hostility. Now a new exhibition at the Indianapolis Museum of Art called "Andy Warhol Enterprises" has seized upon a recent resurgence of interest in the artist's work to closely examine just how Warhol treated business, commerce, and, above all, money in his art and life.



At an economic moment when the art market is booming -- with a Warhol painting selling for $63.4 million at Phillips de Pury last month -- as the rest of the country struggles through a grueling recession, wealthy businessmen have been demonstrating extraordinary confidence in art as a liquid financial asset. Warhol, it could be said, took the opposite approach -- he saw business as a dependable artistic asset. To discuss the ways in which the Pop artist approached this sweeping subject, ARTINFO executive editor Andrew M. Goldstein spoke to the exhibition's co-curator Sarah Urist Green, who organized the show with art critic Allison Unruh.




Andy Warhol for Sony Beta cassette tapes, 1981 / © The Andy Warhol Foundation for the Visual Arts, Inc.




One of the interesting things about your exhibition is that it is sponsored by PNC Bank, which is in itself a commentary of a kind on the relationship between business and art.



When I got a call from Max Anderson, our director, asking if I would be interested in curating a show in conjunction with PNC bank and the Warhol Museum, my first reaction was a little bit hesitant. But I thought, "Warhol certainly wouldn't mind having a show sponsored by a bank. He would probably have really liked it." And I love the fact that Warhol had the corporation Andy Warhol Enterprises -- it has always stood out to me as a really fine example of Warhol as an entrepreneur -- and Andy loved money. So I though lets do a show about Andy loving money, but in a critical, engaged way.



Did they have any part in coming up with the show's conceit?



No, this is something that we pitched to them. And they loved it. I especially thought it was hilarious that for once we would be able to even flaunt a sponsor's name and logo in conjunction with the exhibition. Whenever we were creating collateral for the show I was able to say "don't forget the logo" and "make the logo bigger."



The exhibition catalogue shows Warhol as a shameless self-promoter, even appearing on Japanese film ads like the cliché of Bill Murray's character going to sell Japanese whiskey in "Lost in Translation."



That's perfect, right? But he was doing that from the beginning. Something we didn't have an image of in the catalogue but that was always in my mind in developing the show was the classified ad he put in the Village Voice in 1966 that said, "I will endorse with my name any of the following" and then it was just a list of all of the things he was happy to endorse, which included "anything." So he was a bit of a whore, as it were, from the beginning. One of the ideas that we have really tried to work against in this exhibition is that there was a turning point in Warhol's career -- this idea that before he was shot there was a certain integrity to his work and after a turning point it all dissipated and he became a servant to celebrities and society members. I don't believe that that is true. He even said later in his career, "I was always a commercial artist."



That is so interesting because that recent biography of him, Pop: The Genius of Andy Warhol, ends when he was shot in 1968, essentially condensing the last two decades of his career into a few paragraphs, largely dismissing it as commercial work.



I know. It's a great book, it's excellently researched, has great material, but it just ends! He was shot in 1968 but he didn't die until 1987. It is really incredible that that perception persists -- I mean, it is really prevalent, especially, of that generation. This exhibition is one of several in the past few years that is re-examining his later work including the "Last Decade" show and "Pop Life." These other exhibitions are looking at his later work in a fresh light. But I feel sometimes that the members of Warhol's own generation, or the people who were there, were sometimes clouded in their judgment and unable to see the irony of his later work.



I think it is so interesting your catalogue opens with a picture of Warhol sitting behind a desk. I can't think of another artist, like that, sitting behind a desk. Even Jeff Koons or Damien Hirst wouldn't take that picture.



Oh, no. You have seen pictures of them at their desk in their studios, maybe sitting with desks or papers or tables behind them, or maybe at a computer, but not this -- in such an officious role! I love that photo. It hasn't been published very much, and it was really important to us to include it. There is actually another version of this photo that is backed up a little more and it shows that, to the right of the telephone, there is a TV facing him.



The essays in the catalogue present Warhol as this businessman sitting behind a desk, running Warhol Enterprises, concocting a new moneymaking scheme every day, wearing a tie, and flying by Concorde. And it certainly worked: the final valuation of his estate was $228 million.



That's correct, though I'm not sure exactly how the Warhol Museum came to that figure. I am pretty sure that it is the valuation of his work at the time of his death plus all of the other art work he collected, because he had quite a collection of decorative art and some work by other artists, as well. Also, it includes his real estate holdings.



So, just like any other CEO.



Exactly. In the exhibition we have a portfolio that says "Andrew Warhol Enterprises Inc." on the front and it sort of goes through the value of his estate in 1965, and lists artworks that he owned -- some small Rauschenberg works and other items. But he did amass quite a bit of wealth in his days. Even in the 50s, in the first decade of his career, he did amazingly well as a commercial artist. So he was very well off even before he became famous.



What was he like as a boss?



[Laughs] As a boss? Well, we interviewed Vincent Fremont in the catalog and that is one account of many accounts, but at a certain point in my research it became unhelpful to read the accounts of everyone who worked for him. The people who were very close to him seemed to love him, like Pat Hackett [Warhol's secretary]. While they had not an uncomplicated relationship with Warhol, they certainly had extreme fondness for him. But then you read accounts like Bob Colacello's "Holy Terror" and you see a different side but one that is cited often, the flip side of Andy Warhol, where while he could be incredibly encouraging to other people, to other employees, other artists, he was also pretty cruel in certain regards as well.



What fascinates me is that while he presents this image as a business man -- "the business artist" -- his own management of his affairs was much more like an artist. He hardly paid anyone except with drugs, or parties, or the occasional lunch money.



Part of Warhol's brilliance at an early age was getting people to help him for free. In the 50s he would have these coloring parties where he would invite his friends to Serendipity 3 to help him hand-color his blotted line drawings, and he had his mother help him as well. He certainly had paid assistants, too. All of his films made it look like people in the factory were just sitting around, but he was certainly very good at getting people to work for him for free, and I'm sure it was mutually beneficial. It turned from the "Factory" into the "Office", and his staff members grew as his life progressed. But he certainly did know how to run a business and get the most out of his employees.



Did they have health care? Or anything like that?



I don't know, but there is a great Warhol quote: "Employees made the best dates. You don't have to pick them up and they are always tax deductible."



It is funny to think about how much of a chaotic mess his workplace was.



Well, you see the time capsules, and you get a small glimpse of his business life because the time capsules were basically his sweeping off his desk every so often and putting it in a box. And if you go to the Warhol Museum archives and you take a peek in those time capsules, it is really astounding the amount of stuff that almost anyone would throw away that Warhol kept.



What stands out in your memory?



Ticket stubs, taxi receipts, small notes about his finances. If you look in his diaries, you will see that the "Andy Warhol Diaries" actually originated because his accountant wanted him to track his daily expenses, and then it expanded from there. But it will say "taxi, 3 dollars" and so on. That is in the "Andy Warhol Diaries" that Pat edited. He would call her in the mornings and she would transcribe his day-to-day activities for many years. And some of them... I mean, it's funny, but pretty tedious at a certain point. He will say who he went out with the night before, who was at Studio 54, et cetera. They also found in the time capsules over a thousand dollars in cash that he just stuck in one of the boxes. I tried to get that for the show, actually, but I think they gave it to the Warhol Foundation.



Continued...



--



Visit "The Business Artist: How Andy Warhol Turned a Love of Money Into a $228 Million Art Career" on ARTINFO for the rest of Andrew Goldstein's interview with IMA curator Sarah Urist Green about the themes in her probing exhibition, including a discussion of Warhol's role as Factory foreman, his money paintings, and his vulgarity, and to see a slide show of Andy Warhol's most famous money-making works.



--



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Visit ARTINFO to see some of Andy Warhol's most famous money-making works.








This is the second and final part of a series of posts that looks at why I am skeptical that The Giving Pledge will have the kind of impact many people are saying it will. In Part I, I explored how the pledge is likely to have an extremely small impact on total giving, and how little money will likely benefit underserved communities.



Below, I look at how giving by billionaire philanthropists has typically been limited in its effectiveness and has dangerous implications for democratic decision-making.





Billionaire philanthropy has real limits and risks.



Billionaires don't typically like to share power.



Some forward-thinking foundations share power with communities by including grantees or the constituent perspective on their boards. Others share power by giving most of their grants in the form of unrestricted general operating support so that the leaders of the nonprofits can best decide how to spend the money.



But most billionaire philanthropists don't follow these practices. The current trend in philanthropy is to develop highly specific theories of change around narrowly defined issues, and then to look for nonprofits that can carry out the foundation's plan. It's often called "strategic philanthropy." In this approach, the billionaires and their families get to decide what the problems are facing communities and how best to solve them.



"What's wrong with that? It's their money," you might ask.



First, it's not entirely their money. Dollars donated by millionaires and billionaires should be thought of as partially public dollars. Given our current tax code, most gifts by the ultra-wealthy are subsidized at the 35 percent level by other taxpayers. A foundation created with a $1 billion gift is really $650 million from the donor and $350 million from the tax-paying public. When tax-exempt donations are made, the U.S. Treasury forgoes revenue, and other taxpayers pay higher rates to make up the difference.



Second, there are real risks for democracy when we allow billionaires to have undue influence on public institutions. It has been well documented how the charitable choices of the ultra-wealthy are influencing government policy in this country and around the world. For just one example, look to an opinion piece in the Chronicle of Philanthropy, where education historian Diane Ravitch explains, "A foundation's offer of a multimillion-dollar grant is enough to cause most superintendents and school boards to drop everything and reorder their priorities."



Third, having billionaires tightly control the decision-making process is not optimally effective, for three reasons.



  • Overwhelming evidence from groups like Grantmakers for Effective Organizations and the Center for Effective Philanthropy shows that when nonprofits receive unrestricted support, they have greater impact. That's because the people closest to the problems, those running nonprofits, often have important insights about how to find solutions. So to increase impact, billionaire pledge-takers would be wise to give more unrestricted funding.


  • Research by theorist Scott Page demonstrates that diverse groups make better decisions, so a foundation that has a diverse board is likely to be more effective than a foundation with a small board that includes only the donor and a few members of his or her family. Advisory committees are a good half-way step, but there is no substitute for truly sharing power by adding community perspectives to the board of trustees.


  • Another way billionaires often fall short of being optimally effective is that they tend to favor technocratic approaches to solving social problems. Yet, as philanthropy expert Michael Edwards points out in his latest book, many of the most pressing challenges we face are not best addressed with a business-oriented approach. Thorny social problems require investments in civil society and social justice, not technocratic business-driven solutions. Unfortunately, despite the fact that it is well documented that foundation investments in advocacy, community organizing and civic engagement have an incredibly high return on investment, few high-net-worth donors currently focus on promoting social justice in these ways.




    Happily, a few of the billionaire donors who have taken the pledge are leaders in social justice giving. Herb and Marion Sandler are among them -- they're big supporters of grassroots community organizing. Jean and Steve Case, too, have devoted more than 30 percent of their foundation's grant dollars to social justice causes, primarily by investing heavily in civic engagement. But these donors are the exception rather than the rule among billionaire philanthropists.



What's needed to mitigate these risks and limitations is for billionaire pledge-takers to recognize that donors, taxpayers and nonprofits are really all partners in pursuit of the common good. We all have certain rights and responsibilities in this partnership. And as true partners, we need to share power. If signers of The Giving Pledge think about their philanthropy in this way, it will help democratize their work and lead to better results.



(For more critiques of strategic philanthropy, check out these posts from Sean Stannard-Stockton, Susan Berresford and William Schambra.)



Final Thoughts



The Rev. Dr. Martin Luther King, Jr. once noted, "Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary."



As I stated up front, all things considered, I'm glad the Gateses and Mr. Buffett started The Giving Pledge. It's better for our nation and the world to have billionaires giving to charity than to leave vast amounts of their wealth exclusively to their kids. I hope this initiative inspires bolder giving from billionaires, millionaires and the rest of us.



But it's not just the amount of giving that matters. The quality of the giving matters, too.



Thus far, The Giving Pledge has been silent on these questions of quality, following a politically safer route that says implicitly that all charitable giving is noble and of equal value. But that's just not true. The choices philanthropists make determine to what extent the common good is served by their generosity. We should all hope they make good choices.







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Tuesday 28 December 2010

Making Easy Money

The Florida Gators (7-5 overall and 4-4 in SEC play) actually were awarded a bowl bid with a hefty financial payout ($3,100,000) based on past performance.


No other explanation of why Florida is in the Outback Bowl really makes any sense.


Florida will be playing in Tampa against Penn State while South Carolina will face Florida State in the Chick-fil-A Bowl (awarded to the SEC’s No. 5 finisher) and Mississippi State  (who beat Florida straight up and finished a game ahead overall) will play Michigan in the Gator Bowl (meant for the SEC’s No. 6 team).


Who cares that Florida was “less than Florida” this year.  We all know they’ll rebound, and it just seems more like a big game with them than without them.


 


Pitt in the BBVA Compass Bowl


Who Should be Playing:   Kentucky vs. Syracuse (SEC No. 8 vs. Big East No. 5)


Syracuse finished 2010 with at a better than expected 7-5 mark overall and went 4-3 in Big East play.  Regardless of how good this was it still puts the Orange a step below Pitt who finished (disappointingly) 7-5 overall and 5-2 in conference.


Regardless, Pitt has been shuffled southwards to the BBVA Compass Bowl (meant for the No. 5 Big East team) while the Orange will participate in the first-ever Pinstripe Bowl (hey, that’s played in New York isn’t it?) that is supposed to be awarded to the Big East’s No. 4 finisher.




Twice within four days, my name has popped up in the Bush-era secret cables uncovered by WikiLeaks. Lucky me. Though nowhere near as earth-shattering as the uncovering of American misdeeds in Iraq and Afghanistan, these classified cables provide a stunning and bizarre peek into the paranoid minds of the Bush White House when it came to the subject of one Michael Francis Moore.


And considering how WikiLeaks has released only 1,826 cables of its planned drop of 251,287 -- and I've already played a starring role twice -- I can only say I await with bemused anticipation how the moi-storyline will play itself out.


The most recent secret cable revelation is in today's Guardian newspaper of London. It's entitled, "US Intervened in Michael Moore NZ Screening." Oh yeah, baby! New Zealand! That's where we'll stop Moore and his band of evildoers!


The date was July 30, 2004. Fahrenheit 9/11 was already a huge hit in the United States. Just to give you an idea how huge, it had hit #1 at the box office, the only documentary to have ever accomplished this feat, and had made more on its opening weekend than Star Wars: Return of the Jedi.


But it was no easy path to get there. Disney (which owned Miramax) was apoplectic when they saw the final cut. So they pulled the film from its theatrical schedule. Then they put a permanent block on its release, ensuring no one would see it. But then the New York Times, in a front page story, reported that the real reason Disney hated Fahrenheit was they were worried about the tax breaks it got in Jeb Bush's Florida for Disney World. This caused some embarrassment, so Disney then sold Fahrenheit to the Weinstein Bros., who said they'd spend their own money to distribute it.


The release of the film caused concern at the White House, as this was the reelection year. They hired a pollster who told them the film might tip the election. That was enough for them to swing into action. Much of July was a nonstop barrage of attacks on me and the movie. But that just resulted in more tickets being sold.


Which brings us to Wellington, the capital of New Zealand. There are few nations on earth further away from us. A local chapter of the ruling Labor Party apparently had decided to do a fundraising screening of Fahrenheit 9/11. It was to be hosted by the Prime Minister's Cabinet Secretary for the Environment.


Well, when the U.S. Embassy in Wellington got word of this, it was like all heck broke loose. America was offended! Phone calls were made to the Prime Minister! Then to the Cabinet Secretary! We... are... not... happy!


Apparently, the Kiwis backed down and the Cabinet Secretary withdrew as the host. A sigh of relief whiffed its way through the American embassy. Moore stopped! The cable back to Washington showed the embassy had no problem taking credit for putting the kabosh on yours truly:



... it is probable that this potential fiasco may only have been averted because of our phone calls -- it is apparent to us that neither the Minister nor anyone else in the Labour government seems to have thought there was anything wrong with a senior Minister hosting such an event.


So here's my question:


Really?


I mean, seriously -- really? This is how the Bush State Department was spending its time -- on a single screening of Fahrenheit 9/11 in freakin' New Zealand? Or maybe... was this kind of interference happening just to New Zealand? Call me crazy, but I gotta feelin' it doesn't stop there. Just as a health insurance executive has now come forward as a whistleblower to reveal the millions spent to smear Sicko, I can't wait for the day when the whistleblower from the Bush White House comes forward to tell the fascinating tale of how the Bush team believed they had to do something -- anything -- to stop Fahrenheit. Or worse (like the "Plan B" the health insurance companies discussed -- to "push Michael Moore off a cliff."). I didn't want to think about what the Bush Plan B would be. Just wasn't worth the crazy-making. So I ignored the things I'd hear, kept my head down and motored on.


But, it does make you wonder. And I ask you, is it fair to pose the question: If they were this focused on some insignificant screening in New Zealand, what else were they up to? And I don't mean in regards to me. I mean anyone who was on their enemies list...


I can't wait to read more classified cables.


P.S. Of course, given the false claims the State Department made in the other "secret" cable about my movie Sicko, I guess anything was possible.


P.P.S. Don't miss the REAL revelations from just the first batch of WikiLeaks cables. For instance, the Obama administration worked together with Republicans to kill an investigation by Spain into Bush's torture. Pfizer hired a private investigator to dig up dirt on the attorney general of Nigeria. Bush's ambassador to France planned to "retaliate" against the country for standing up to Monsanto. And we're less than 1 percent of the way through ...







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NJ Gov. - AOL <b>News</b>

There's no word on whether New Jersey Gov. Chris Christie and his family visited Disney World's Blizzard Beach water park this week as his state was buried in a real blizzard, but the rising Republican rock star may have seen his ...

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NJ Gov. - AOL <b>News</b>

There's no word on whether New Jersey Gov. Chris Christie and his family visited Disney World's Blizzard Beach water park this week as his state was buried in a real blizzard, but the rising Republican rock star may have seen his ...

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IN 'GREEN NEWS EXTRA' (see links below): The reactor on your roof: Caltech breakthrough uses solar power to generate liquid fuel; Fmr. Shell president predicts $5-a-gallon gas by 2012; EPA develops neurotoxicants list; Obama admin takes ...

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Hal Boedeker of Orlando Sentinel is The TV Guy. Dishing on TV, the news and what everybody is talking about.


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NJ Gov. - AOL <b>News</b>

There's no word on whether New Jersey Gov. Chris Christie and his family visited Disney World's Blizzard Beach water park this week as his state was buried in a real blizzard, but the rising Republican rock star may have seen his ...

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IN 'GREEN NEWS EXTRA' (see links below): The reactor on your roof: Caltech breakthrough uses solar power to generate liquid fuel; Fmr. Shell president predicts $5-a-gallon gas by 2012; EPA develops neurotoxicants list; Obama admin takes ...

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Thursday 23 December 2010

Making Money Fast

This guest post from Jacq Jolie is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. You can read more about Jacq’s story at Single Mom Rich Mom.


On 31 December 2009, I finished what I hope will be my last full-time, permanent job. I’ve worked a bit here and there over the past year, but it’s on my own terms, and not because I have to. I’m now semi-retired at the age of 45. But what does that mean?


About nine years ago, after reading Your Money or Your Life, I changed from an under-earning, confused woman to a woman with a mission: to never have to work again (unless I wanted to). In November of last year, I reached the Crossover Point, where the income from investments exceeded my expenses. (I think it actually happened sooner than that, but I hadn’t been paying attention.) At last, nine years after first figuring out what I wanted to work hard and save money for, I’d reached Financial Independence.


I’m fortunate that in the last few years, I’ve managed to raise my income so that I can work a few months a year and earn the same amount as I have working full-time (and overtime!) in previous jobs. I’m also fortunate that my wants remain relatively small and I never succumbed to lifestyle inflation. I’ve never wanted a big house, a fast car, or exotic travel.


In a “normal” year, I can easily live on about $36,000, including mortgage payments of about $15,000 per year (that I’m prepaying). So I knew that my Crossover Point was somewhere around $20,000/year with a paid-off house. In the next year, I intend to downsize and move to a (mortgage-free!) townhouse that will be close to public transit for those times I choose to work, and, more importantly, be low maintenance to allow for periods of long travel during the summers.


I’m trying not to plan too far in advance. I want to be flexible. My hope is that I can continue to work part-time or a few months a year for the next 5-10 years until a part of my pension is eligible for withdrawal. My net worth is somewhere around the $500-600k mark, not including pensions. Since I don’t have any intention of touching my savings for the next ten years, I’m hopeful that it will last as long as I need it. If not, I’ll go back to work full-time for a couple of years.


I think what Financial Independence has given me has been a confidence in life itself — that I can handle anything that comes up. If life is difficult, sometimes throwing a bit of cash at a problem resolves it. It’s also given me the freedom that I first dreamed of when reading Your Money or Your Life — that I could work because I enjoyed working, and that I could have my life be about more than work. I have the flexibility to leave any work situation that doesn’t contribute to my overall happiness.


Having lived very frugally for long periods in the past, I experienced frugality burnout earlier this year. I’ve consciously been spending more lately on the things that I’ve “deprived” myself of over the last almost 30 years I’ve been working. For example, my bed was over 50 years old and desperately in need of replacement. A new bed is being delivered this week, and I couldn’t be happier. I’ve also stopped thinking that I should DIY everything; I’ve had house cleaners come in this last month — something I would never have considered doing just six months ago.


Part of me still worries about the future:



  • What is it like to be looking for a job and networking once I get over 50?

  • Will it be hard — or impossible — to find work if I stay out of the job market too long?

  • What if the stock market falls again?

  • Are my investments too aggressive or not aggressive enough given that I hope not to draw down on them for quite some time?

  • Am I jumping too fast? Should I keep working full-time for a few years and get to that magical million and give myself even more of a buffer?


I only have a year of semi-retirement under my belt, so I’m not sure if that’s necessarily a “success”; I’m still just learning what works. I do know I’ll never go back to a regular job again though and definitely not go back to driving myself as hard as I have in the past again. My hope is that my approach is flexible enough and that I’m resourceful enough to survive and thrive through whatever lies ahead.






This is the final in a three-part series. Read Part 1 here and Part II here.



In the previous two parts of this series I have recounted the multiple frauds perpetrated by MERS: it defrauded counties out of billions of dollars of reporting fees, it defrauded homeowners by destroying documents that provide a clear chain of title -- facilitating its foreclosure frauds, and it defrauded securities investors by failing to adhere to PSAs (pooling and servicing agreements) -- making their securities invalid. Now, in order to cover the trail of deceit MERS and the banks are stealing homes as fast as they can in the hope that no one will notice the fraud. Meanwhile, they are destroying real estate values and adding to the headwinds that are pushing our economy into the first great depression of the 21st century.



In this piece, let us step back and examine the big picture to answer the question: Why did Wall Street create this crisis? For the answer, we have got to go back several decades. I do not want to give a long-winded history lesson, but it is necessary to understand the transformation that has taken place since the 1960s. Back then, the financial system was small, simple, regulated and relatively unimportant. Banks made commercial loans; thrifts made home loans; and Wall Street handled investment finance. Households had jobs and rising wages so they didn't need to go into debt to finance rising consumption. With robust economic growth, each generation could expect to have roughly twice the living standard of the previous generation.



Things began to change in the 1970s, and especially in the 1980s as growth slowed, as median real wages stopped rising, and as financial institutions were unleashed to expand activities into new areas. At first households coped with stagnant incomes by putting more family members to work (especially women), but gradually they began to rely on debt. Banks created new kinds of credit and gradually expanded their views as to who is creditworthy. I can still remember one conference I attended at which someone from the financial sector proudly announced that the banks had discovered an untapped market for credit cards -- the "mentally retarded". The argument was that this group would be just as safe as college students, since parents would bail them out in order to avoid having their kids' credit ratings suffer. This was not a joke -- it was a business model.



With slower economic growth, it had become harder for American firms to make profits. They shifted their focus from actually producing goods and services to making money on financial products. GM and GE became primarily financial institutions that happened to make cars and light bulbs as a sideline business. Yes, you could buy a car made by GM, but the company made most of its profits on the auto loan. (It then branched out to -- you betcha -- mortgage backed securities and all other manner of risky assets. I hope readers understand that that is what the "auto" bail-out was all about.) As everyone got into the act of indiscriminate lending, banks found their own business dwindling -- so they had to continually innovate with new products and to find new activities to finance.



The economy became "financialized", as financial institutions inserted their activities into virtually every aspect of American life. Health care morphed into financialized health "insurance", given a huge boost by "Obamacare" legislation that for the first time in US history mandates that Americans turn their incomes over to private financial firms. Even death became financialized with "peasant insurance" (employers take out contracts on employees) and "death settlements" (life insurance policies on those with fatal illnesses are securitized and sold to gamblers betting on early death). Retailers increased the financialization of consumer goods -- they couldn't get enough profit on the sales or even on the consumer credit, so they offered "extended protection" on everything from TVs to toasters and then tried to scare customers with an unusual marketing pitch: the products they carry are so shoddily produced that insurance is necessary to protect the purchase.



Every kind of debt or insurance product became a financial commodity, packaged into a security and sliced and diced and bought and sold. At the same time, "insurance" (often in the form of credit default swaps) replaced underwriting (credit assessment) to make these loans more marketable. And then the credit default swap insurance, itself, became a way to bet on the death of securities, companies, and even nations. It is not a stretch to say that Wall Street's capitalists returned to their roots as "undertakers" (the old term for entrepreneurs), with death becoming their main line of business.



Debt grew. In 2007 just before the crisis hit, total US debt reached five times national income -- the previous record was just three times income, a level reached in the propitious year of 1929. In other words, each dollar of income had to service five dollars of debt. In the decade previous to the crisis, American households spent more than their incomes in almost every year. For every debtor created there is a creditor. Not surprisingly, creditors are richer than debtors. Over time, the proportion of Americans who were debtors grew, and the proportion of creditors fell. The rich got richer and every one else either got poorer or at best just managed to break even. In other words, the debt train fueled a massive redistribution of income and wealth to the very top. It is no coincidence that inequality in the US has returned to its previous peak -- reached, not coincidentally also in 1929. That is what President Bush actually meant when he talked about the ownership society -- a society in which a small elite would own everything.



Banks became giant one-stop casinos that facilitated every kind of crazy bet. They would make a loan to you, but then simultaneously securitize it to sell-on to an investor plus place a bet that you would default on your loan so that the security would go bad. For a fee, they'd let a hedge fund manager choose the riskiest loans to bundle into a sure-to-fail financial product that they would then sell to their own customers. And then they'd join the hedge fund in betting against their customers. The more loans they made, the more fees they collected; the more bad loans they made, the more bets they would win. The more debt they piled on households, the greater their profits; riskier debt meant even higher fees and more defaults and thus greater wins from gambling. Prospective death was a booming good business for our undertakers.



America became "Bubbleonia" -- with a "bubblicious" economy that moved from one bubble and crash to another: A commercial real estate bubble and crash in the 1980s that killed the thrifts; a series of developing country debt bubbles and crashes in the 1980s and 1990s fueled in part by American banks; a US stock market bubble and crash in 1987; the dot-com bubble and crash at the end of the 1990s; and then the US real estate and global commodities markets bubbles and crashes this decade.



Increasingly, the bubbles were managed cooperatively by Wall Street and Washington. Chairman Greenspan and President Clinton made a pact with Robert Rubin's Wall Street to pump up "new economy" internet stocks through "irrational exuberance". When that failed, Greenspan extolled the benefits of adjustable rate mortgages, while President Bush hawked the "ownership society". Wall Street turned America's residential real estate sector into the world's biggest casino -- $20 trillion worth of property that could serve as the basis for many tens of trillions of dollars of bets. Bernanke promoted the bubble by assuring markets that America was enjoying the "great moderation" -- a new era in which stability dominates -- and that in any case, the Fed would protect markets in the case of any hiccups.



The home finance food chain was fundamentally changed to facilitate the rapid pace of gambling that would be necessary to feed Wall Street's appetite. Real estate appraisers were paid more to over-value homes; mortgage brokers were rewarded with higher fees to induce borrowers to accept unfavorable terms; mortgage lenders got better fees for riskier loans; securitizers wanted more junky loans to increase the projected returns spit out by their own internal models that presume more risk is always rewarded with higher profits; credit raters got paid to rate trash as AAA -- as safe as treasuries; and investors shunned "plain vanilla" securities in favor of risky structured products that were so complex no one could understand them -- so that they could have any value desired. No worries, AIG sold "insurance" on all this garbage!



That homeowners would default on the unaffordable mortgages was a foregone conclusion. Indeed, it was the desired result of the business model. The preferred marketed loans tell it all: Subprimes! NINJAs! Liar's loans! Washington helpfully changed bankruptcy law to make it more difficult for a homeowner to get out of mortgage debt in preparation for the wave of defaults that everyone knew would result. Wall Street would get the homes, and homeowners would still have to pay on the debts. Then the foreclosed property would be resold, with more fees for everyone in the finance food chain, and the whole process through to default would begin again -- a nice virtuous cycle.



It might seem strange that banks would actually want default. But that is the beauty of a casino -- the house always wins, and homebuyers were gambling against the casino. On the way up, fees are collected, and on the way down fees are still collected on the foreclosures and as houses are resold. And if anything should go wrong, Washington backstops the casinos.



But it was necessary to streamline foreclosure to make it as fast and cheap as possible. Enter MERS -- another link in the food chain -- created by the banks in 1997 in preparation for the boom and bust. MERS was set up to be a foreclosure mill. It would break the centuries-old custom that protected property rights by requiring every sale of property to be publicly recorded, and requiring that any creditor claiming a right to foreclose to demonstrate clear title, with an endorsed note in the creditor's name and a record at the county office showing transfer of the property.



The banksters did not want to go through all that paperwork, and needed to subvert the transparency that would shine light on their crimes. Hence, they set up a fraudulent shell corporation that claimed to be the mortgagee; while the original sale would be recorded at the county office, subsequent sales and purchases of the mortgage would be recorded only by an "electronic handshake" between two "members" of MERS. Even that record was considered by the banksters to be purely voluntary -- MERS did not require members to actually record transactions. If they found it more convenient to conceal the transfers, that was permitted.



MERS even farmed out its name -- for 25 bucks anyone could buy the MERS trademark and use it. And in a touching display of fraternity, everyone got to be a certified vice president of MERS. (Sort of like those 1950s marketing campaigns advertised on cereal boxes -- for 25 cents, you too can be a Super Fraudster with a nifty membership ring and all the benefits of membership in an international criminal conspiracy!)



MERS deliberately undermined the legality of the loans and the records. Homeowners could no longer search the public records to find out who actually held their mortgage -- the record would show MERS as owner, but MERS was a shell corporation with no real employees. It was not a servicer, so the homeowner could not make mortgage payments to the purported owner. As a result, checks were sent to the wrong servicers; servicers credited the wrong accounts; servicers claimed delinquencies on homeowners who never missed a payment, and piled late fees and delinquencies on the wrong borrowers; sheriffs were sent to break down the doors of the wrong houses, and threw belongings out on the street in front of homes on which there was no mortgage at all. MERS purposely created the mess, at the behest of banksters who do not want mere legal technicalities to get in the way of stealing homes. The undermining of the public records was not a mistake -- it was MERS's business model, created by the member banks.



And MERS helped banksters to defraud securities holders. Banks not only separated the mortgages from the notes, but they even destroyed the notes as they entered the mortgages into MERS's electronic data base. MERS told servicers that it is "customary" practice to retain notes, not to endorse them over to REMIC trustees as required both by federal tax law and by the PSAs that govern the trusts. This made the securities a "nullity" -- as the Supreme Court ruled over a hundred years ago -- because a mortgage without a note is unenforceable in foreclosure. At best, the securities are unsecured debt, with no real property behind them.



In any case, the mortgages put into the trusts did not meet the representations made to investors -- so even if the notes had been properly endorsed over to the trusts, the securities could be turned back to the banks. By creating a completely fraudulent electronic registry system -- in which data would be entered only if banks found it convenient to do so, and in which data could be modified at any time by any member of MERS -- MERS made it easy to conceal the securities frauds. Destruction or forgery of the paperwork was absolutely necessary to cover the trail of fraud from origination of the mortgage to securitization and finally to the inevitable foreclosure. Again, destruction of documents was not a mistake. It was the business model.







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Wednesday 8 December 2010

Making Money Job

Dan Klamm is the outreach and marketing coordinator at Syracuse University Career Services. Connect with him on Twitter @DanKlamm.

Finding a job in today’s economy is tough if you’re looking locally, but it can be particularly challenging if you’re seeking work in a far-away, unfamiliar city.

If you’re a long-distance job seeker, you face several disadvantages. First, some companies anticipate that bringing you in for an interview will be a hassle and that you will expect them to pay for travel expenses. Second, they don’t know whether you’re serious about relocating to their city. Third, you’re an unknown entity. When going head-to-head with more familiar candidates, it’s often easier and less risky for employers to select the locals and toss your application aside.

Even if you’re able to secure interviews and gain some traction in your search, the process of landing a position in a new city can involve a significant investment of time, money and resources on your part.

The good news is that social media can help with the process of long-distance job seeking. Whether you’re looking for a job 300 or 3,000 miles from home, here are some tips for using social media in your search.

Stay On Top of Local News/>

When interviewing for positions in a new locale, you don’t want to seem like an outsider. It’s important to get acquainted with local culture and to stay on top of important happenings in the news. Though you probably won’t be grilled on local politics, sports teams or economic development during the interview process, being aware of these things can help with small talk. It also shows that you’re serious about relocating and invested in the process.

You can get started by following local news outlets on Twitterclass="blippr-nobr">Twitter and Facebookclass="blippr-nobr">Facebook, as well as identifying local personalities and thought leaders to keep up with. A job seeker focusing his efforts on Richmond, VA, for instance, might consider following @RVAnews, @RichmondMag and @WireRichmond. The Huffington Post even aggregated lists of regional news outlets on Twitter, making it easy for you to find Twitter accounts in specific locations.

Grow Your Professional Network/>

Most jobs today are found through networking, so you should leverage any and all local connections you may have. Facebook is a great platform for warming up relationships with old friends, family or former colleagues who live in the location where you’d like to be. Beyond that, LinkedInclass="blippr-nobr">LinkedIn can help you identify new contacts — such as people working at your target companies — and get introduced through mutual connections. Here are some tips on the etiquette of reaching out via social media.

Tap into local professional associations on LinkedIn, too. If you’re relocating to Boston to work in marketing, for instance, you have plenty of opportunities to network: The Boston Chapter of the American Marketing Association, the Boston Marketing Group, and the Boston Interactive Media Association, just to name a few. Being part of these groups will keep you in-the-know with local industry happenings and increase the likelihood that you’re invited to networking events.

Don’t overlook alumni connections in your target city. Many schools have satellite locations or active regional clubs with robust offerings in the way of career connections. At Syracuse University, alumni can follow @LubinHouseSU and @BigAppleOrange on Twitter, or join the Big Apple Orange group on LinkedIn to network with SU’s alumni base in the New York City area.

Find Job Postings/>

Increasingly, companies are using LinkedIn and Twitter to publicize job openings. LinkedIn is more useful than a typical job board because it allows you to see who posted each job and to pinpoint how you are connected to individuals at the company.

Edelman, one of the world’s largest independent PR firms, uses LinkedIn to post job opportunities in its 52 worldwide offices. The firm also uses Twitter to engage potential employees. Recently, Edelman even hosted a San Francisco Tweet-up for job seekers savvy enough to be following its @Edelman_Careers account on Twitter.

In addition to specific companies posting jobs, be aware of niche job feeds on Twitter. Looking for jobs in New York City’s fashion industry? Follow @nyfashionjobs. Marketing jobs in Los Angeles? Try @LA_Marketing. Visit twitjobsearch.com to locate Twitter accounts posting jobs relevant to your particular search.

Save Money on Travel/>

In most cases, you’ll need to make at least a couple trips to your desired new location before making a permanent move. If you’re lucky, your prospective employer will offer to cover the costs of travel or give you the opportunity to conduct preliminary interviews via phone or class='blippr-nobr'>Skypeclass="blippr-nobr">Skype. Even with these accommodations, the costs of hunting for a job in a far-away location can add up quickly — especially if you’re looking in pricey markets like New York City or San Francisco.

To learn about opportunities to save, connect with travel providers and hospitality companies through social media. Often, these organizations will provide promotional codes or discounts to their followers. United Airlines has been known to advertise special fares (or “twares”) via their Twitter account. Virgin America has also offered discounted rates via Twitter promotions, such as “Fly Forward, Give Back.” Amtrak, Greyhound and Megabus all use Twitter to share news or special offers, as well.

When you will need to find lodging in your desired new location, it never hurts to be acquainted with local hotels. This past summer, the Bryant Park Hotel gave away a free two-night stay to a lucky Twitter follower. Many hotels are using social media to communicate with prospective guests, announce special rates and articulate their brand values. For a comprehensive view of hotels on Twitter, take a look at this list organized by Resideo.

Show That You Mean Business!/>

When a prospective employer receives your job application from across the country, he/she has no way of knowing how serious you are about moving. Are you applying to the company on a whim? Are you applying to positions all over the country? Would you really be prepared to make a quick move if offered the job? Use social media to show that you’re committed to relocating.

You can start by customizing your LinkedIn profile. In your LinkedIn headline or summary, state your plan to look for jobs in “X field” in “X location” by “X date.” This clarifies your intentions and shows that you mean business. Not all job seekers can be this forthright (especially those who have to keep relocation plans a secret from their current employers), but this is an excellent way to reinforce your seriousness about moving.

Looking for work in a new location can be a daunting task, but with the help of social media, it doesn’t have to be quite so difficult. When you make use of all the resources at your fingertips, you may be surprised how easy it is to make connections, identify opportunities, and ultimately land your dream job in a new location!

More Business Resources from Mashable:

- How the Fortune 500 Use Social Media to Grow Sales and Revenue/> - 5 Ways to Sell Your Expertise Online/> - Why Your Business Should Consider Reverse Mentorship/> - 35 Essential Social Media & Tech Resources for Small Businesses/> - 6 Ways to Score a Job Through Twitter

Image courtesy of iStockphotoclass="blippr-nobr">iStockphoto, thesuperph

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In a lengthy interview with The Daily Beast this week, Wagner said she didn't want to "cast aspersions" on Steele's chairmanship, but still managed to make subtle and not-so-subtle digs at his bumpy tenure.


"There needs to be accountability," she said. "The chairman needs to be full-time," she added, noting the needs for "checks and balances and controls." Beyond that, what the RNC needs, is "strong management and leadership from the very top."


From the beginning, Steele has been a public-relations headache for the Republican Party, picking a fight with Rush Limbaugh, offering "slum love" to Louisiana Gov. Bobby Jindal and describing civil unions as "crazy"—all in the first 30 days after taking office.


But whereas Steele is the "off-the-hook" kind guy, who said he wanted to polish the GOP's image with everyone "including one-armed midgets," Wagner is less showy—even her most high-level official appointment spoke restraint. (She served for three-and-a-half years as ambassador to Luxemborg, appointed by George W. Bush.)


As chairwoman of the Missouri Republican Party, she is credited with turning the state legislature from blue to red, winning statewide races and crucial votes to George W. Bush in 2000 and 2004. Coming off those victories, she became the RNC co-chairwoman before Bush appointed her to the Luxembourg diplomatic post. Coming back, though, she worried that "perhaps socialism had followed me across the pond," she said, and so she decided that she "needed to reengage," successfully chairing Roy Blunt's Senate campaign.





Ann Wagner of the Republican National Committee pumps up the crowd on day one of the Republican National Convention in New York on Aug. 30, 2004. (Photo: Bill Greenblatt, UPI / Newscom)


The night before Wagner announced her desire to run for the chairmanship, she called Steele, someone she described as "a friend," telling him her intentions. The conversation was "cordial," she said, adding that she intends to focus on bringing back GOP donors who left the fold during the last cycle.


“With independent expenditures, there’s no coordination so you don’t know if the organization or the group will be there for you.” With outside groups, “you are flying blind a little bit.”


"It's not just restoring a certain level of credibility in being good stewards of our donors' investments," she said, "but frankly just going out and making the ask."


In many ways, Steele's biggest problems have been related to money. There was, of course, notoriously, the almost $2,000 that RNC staffers blew at a "bondage-themed nightclub featuring topless women dancers imitating lesbian sex." (The RNC denied that Steele himself visited the Hollywood club.) More seriously, Democrats have been more effective in raising money, and last month, former RNC political director Gentry Collins wrote a scathing letter, saying Steele had maxed out on the $15 million credit line approved by the committe. And some have criticized Steele for being upstaged financially by GOP operatives such as Karl Rove, who pulled in  much-needed cash for the Republican Party during last month's midterm elections. (An RNC spokesperson declined an interview with Steele.)


Wagner, for her part, clearly doesn't want to be beholden to Rove.


"The key is to make sure that, in a presidential year, we are not so dependent upon so many outside groups to assist in this," she said. "With independent expenditures, there's no coordination so you don't know if the organization or the group will be there for you." She added, with outside groups, "you are flying blind a little bit."









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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

She and beau Jason Trawick escape a fake abuse scandal at a luxe resort in Mexico.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

She and beau Jason Trawick escape a fake abuse scandal at a luxe resort in Mexico.

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autosport.com - F1 <b>News</b>: Lotus unveils F1 plans with Renault

Group Lotus has ramped up its involvement in Formula 1 by becoming title sponsor and a major shareholder in the rebranded Lotus Renault GP Team.

<b>News</b> - Britney Spears Tells Us About &quot;Best Birthday of My Life <b>...</b>

She and beau Jason Trawick escape a fake abuse scandal at a luxe resort in Mexico.

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