Risk Rap

Rapping About a World at Risk

The Lost Children

Appleseed-report-2011-Children-at-border-300x206At the end of harrowing journeys the children arrive at border stations. Forever marked by their exile from homelands and the travails of crossing; parched tongues nudge blistered lips to form fractured words from cotton lined mouths, “Yo tengo sed.”

INS border guards oblige the request with a plastic milkjug half filled with water and a welcomed sanctuary of incarceration. Other citizens meet the refugees with cocked Bushmasters and dogeared bibles righteously proclaiming the sanctity of property rights, taxation risk and exclusionary platitudes affirming legalisms of citizenship.

The Latin American children seeking refuge in the United States is the emblematic problem of our time. Images of frightened, emaciated children crammed like cattle into detention camps transcends the metaphorical symbolism of this lost generation. The children amassing at the borders are the disenfranchised victims of globalization. Severed from family, exiled from homelands these stateless souls roam existential netherworld’s in search of humane sanctuaries; only to find at journeys end the embrace of resent and acrimonious shelters optimized to efficiently consign distressed commodities to the discount bins of humanity.

Their arrival and the political response of our present day Know Nothings mocks notions of morality and how a civilized nation marks civility. Escaping the mean estates of a predatory economic system, suffering the chattel like abuse from rapacious coyotes and the burning hardships of the water less Sierra Madre crowned deserts; the world’s debilitated children have come home to roost. Arriving on the doorstep of the world’s neocolonialist powers begging for meager portions of subsistence gobbled up by the cool facility of imperial gluttony.

In our flat world, complaining about taxes being consumed by immigrants is a disingenuous cover for the social instability global resource capture has wrought on the developing world. Taxes are being consumed by corporate welfare (generous tax credits), crony capitalism (See Chris Christie) , wasteful war expenditures (Iraq, Afghanistan, Libya) and tax avoidance by the money class. All enablers of a predatory economic system.

The large corporations routinely leverage the “free social capital” of the developed world. Deployed to lesser developed countries (LDC) it extracts huge amounts of surplus value from LDC.

These massive capital infusions transforms subsistence economies, radically altering local industries and agrarian based institutions. The windfall profits however, never seem to make it back to its homeland except in the form of a soaring stock price on home based exchanges. Profits leave LDC like a royal progeny and find luxurious sanctuary in tax friendly offshore banks.

Today huge swaths of the world population are refugees. All capital seeks optimal return. Human’s are no different as they move across artificial political borders in search of subsistence. Wealth inequality and ruthless exploitation of economic and human capital has created this problem.

It poses an ironic conundrum for self serving libertarians. They welcome the bounty of freewheeling global capital and the risk free handsome returns it provides for the wealth of a nation. They are in full league with the march of multinational capital. They dislike the burden taxation has placed on their wealth and seek relief and investment opportunities in the privatization of government services. Prison Inc., Charter Schools LLC, healthcare, lotteries, social services, roads, parks anything save police and military functions are privatization targets. Privatization displaces workers and further rationalize government services to the primary benefit of shareholders much like the impact of global capital on the LDC economies. Already one can see its impact in the broadening wealth gap and the disappearance of the middle class in the United States.

The lost children wander the roadways in every country. They cast off on unseaworthy crafts hoping to make landing on a friendly shore that will recognize their humanity. The stateless children pilgrim across dangerous borders leaving footprints on pious souls asking them to offer more than an admonition to take comfort in Old Timey Biblical instruction that drove Hagar and her unholy progeny Ishmael back into the desert to hie with the wild asses.

Dear global citizens, we are all lost children. Refusing to recognize the desperate condition of our distressed children is a finely honed disease of our common troubled condition. No doubt true believers thumping the gospels of the finest MBA institutions enunciate high church managerial speak when we alight the human condition to the impaired value of human capital. It should not come as any surprise to witness the obstinate refusal to act on gun control because gun manufacturers profits are more important than the slaughter of innocents. Cutting food stamps to the children in poverty is critical to shave a few points off the capital gains tax. This gives license to Palin and Boehner in Unholy alliance with Faux News Philistines and Teabagging Falangists to paralyze the government over their insistence that healthcare should not be extended to the marginalized and poor in service to Obama’s socialist agenda.

Partisan blindness is a poor excuse for ignorance; and I’m sure Palin can see the wandering lost children from the back window of her plush new Arizona digs; seeking passages across the dangerous borders that exclude them entry and deny their humanity.

We cannot brand them “others”, unworthy of sanctuary. They are the victims, refugees from imperialist war, their livelihoods crushed by the march of predatory capitalism, their farms expropriated by GMO slinging multinational agribusinesses, their drinking water polluted by the flowing slush of strip miners looting the mineral wealth of communities; tribal lands and verdant rain forests clear cut for loggers as offshore drilling destroys aquaculture industries forcing boat people to cast off on unseaworthy rafts drowning in seas of indifference. We must throw them a life raft because someday soon we’ll be asking the same of them.

The problems of the world are human problems. Ignorance does not excuse blindness. As the world watched The World Cup in Rio de Janeiro, FIFA cleverly gleaned over the fact that it came at the expense of many thousands of Brazilian’s being displaced from their homes.

Tonight as you watch the news video from Gaza, don’t look away from watching a father furiously digging through the rubble, his hands and knees bloodied and shredded by glass and spiked rebar, his nostrils filling with concrete dust, he’s choking. Yet he still furiously digs for his trapped daughter. We hope he can extract her. The world rejoices in one less lost child.

Henson Cargill – Skip A Rope

Risk: morality, humanity, civility, compassion

July 23, 2014 Posted by | Civil Rights, homelessness, immigation, social justice, sustainability, Tea Party | Leave a comment

The Yin and Yang of Inflation

inflationpicInflation like all risk is a double edge sword. Its negative nature will upset the apple cart and pose uncomfortable challenges for SME managers that have grown accustomed to the status quo.

It will force managers to reconsider their well conceived business plans and perhaps more closely scrutinize this quarters P&L or the company balance sheet. It will present serious challenges for businesses supply chain and client relationships. It may raise the eyebrows of your shareholders and credit providers perhaps provoking some pointed questions concerning your management skills and the validity of your business model.

That said inflation does have an upside. Like all risk factors it has the potential to create opportunities. Inflation will drastically alter market conditions. It will reveal inefficiencies that nimble SME can actively engage and manage to turn those market conditions to their advantage. The key operative words are management, intentionality and active engagement.

Inflation is a silent killer. It stalks all SME threatening to gobble up product margins, revenue opportunities and bottom line profits. It diminishes customer buying power and may threaten the solvency of large customers and suppliers. It drives up the cost of capital, making credit more expensive while it forces state and local governments to raise taxes and fees.

The inflation bogey man lurks in the profit and loss statements of all businesses with SME being particularly vulnerable to its effect. Inflation dramatically shows itself on the expense side of the ledger in the increases for basic materials, energy, delivery services, T&E, administrative expenses and employee benefits. Inflation also affects the income side of the profit loss statement. It erodes the buying power of your customers and threatens collection of receivables by extending days outstanding, increased write offs or the sale of uncollected debt for pennies on the dollar.

SME profitability is particularly sensitive to the effects of inflation because of economies of scale, concentration of risk factors and lack of pricing power.

Many SME lack pricing power. Pricing power suggests that if price of a product rises to a certain level demand for that product will not diminish. For a SME to have pricing power it must offer value add product to dependent buyers. Its product or service cannot be easily replicated or widely available from other sources.

While pricing power escapes most SME numerous factors inhibit their ability to become low cost producers. They deliver product or service differentiation to their customers by other means then low price. Inflation erodes consumer purchasing power driving buyers to seek low cost producers. In this environment SME may suffer when buyers trade down to low cost providers. Key customers may compel SME to lower prices to be more in line with lower cost producers. This is a major threat to SME.

SME tend to have greater risk concentration in their business model. Heightened risk concentrations are most pronounced in small businesses due to a limited product line, geographical risk, market cyclicality and in client and supply chain relationships. Consider a small manufacturer of finished steel products for the home construction industry. Generally, manufactures profitability is highly correlated to the price it pays for basic commodities and has an extremely high concentration of supply chain and product risk. Small businesses may not be able to recover or adjust its product prices to cover increased commodity prices due to existing contractual agreements with customers or its lack of pricing power. The abatement of market demand due to a recession may provoke larger customers to demand price concessions by threatening to move their business to lower cost producers. The pressure on this small manufacturer is compounded by a spike of smaller account losses and moribund demand due to weak cyclical market conditions in its target market.

It’s almost a perfect storm of negative business conditions. Small businesses managers need to understand how inflation touches all aspects of their business and must manage its impact to maintain profitability and sustainable growth.

Managing Inflation Risk with a WIN Campaign

SME can meet the challenge of inflation head on by implementing a Whip Inflation Now (WIN) program that engages the numerous risks inflation poses. In deference to our former President Gerald Ford, business managers can initiate WIN Programs and actions to temper the impact of inflation and to seize opportunities that rapidly changing market conditions create. Small businesses must be extra vigilant and proactive in managing all classes of business risks.

Some small businesses will cave into the demands of their large accounts to cut prices to prevent them from going to a lower cost provider. This is very dangerous for small businesses and can result in “death by a thousand cuts.” Managers should not wait for their largest account to approach them seeking price concessions. Now is the perfect time to go on the offensive and alter the value proposition that only your firm can uniquely deliver to key accounts. Remember your largest accounts are experiencing the negative effects of inflation as well. Go to them and propose a WIN Campaign.

A company’s WIN Campaign can offer a joint marketing program using advanced web enabled technologies. Your WIN Campaign can implement an expanded training and support program tied to a business development program or supply chain rationalization. You may suggest a partnership to develop a new product or put in place a customer loyalty program. Your job is to create a unique value proposition that adds value to your product and convey it to your customer so they cannot commoditize your product. Together you and your clients can WIN the fight against inflation and turn it into a business development initiative. Your clients will appreciate the fact that you are thinking about their business success.

Another common knee jerk reaction to fight rising business costs is to reduce expenses by cutting expenditures on areas that do not support the mission critical functions of the business. Capital is allocated to maintain funding to support sales, production and product delivery. This is coupled with a lean administrative management structure and this model is seen as a recipe for economic survival. Being good stewards of corporate capital is essential during these times. Capital leakage is always a threat to business profitability and needs to be even more diligently managed during times of economic duress. But this strategy is a subsistence survival strategy. It is based on investing the barest minimum of capital to address fluctuating market conditions. This strategy may limit small businesses ability to literally capitalize on opportunities that changing market conditions present.

Cutting expenses for marketing is usually another budget casualty when businesses look to cut costs. This will reduce your current expense line for this quarter and will certainly help bottom line profitability; but skipping this year’s trade show will not help you to locate that new customer who is looking for a supplier because his current provider is struggling with product quality issues. Cutting this expense won’t provide you with the critical insights you need to stay competitive and ahead of new market entrants that are attending trade shows. Who by the way are also aggressively courting your largest account to get just a tiny slice of your business to demonstrate their “superior value proposition.”

Employee benefits and training is another area that is often the focus of budgetary cutbacks. Many SME need to closely consider the gains they will realize by cutting back on benefits offered to its employees. Cutting benefits could increase employee turnover. Training and hiring new employees are an expensive proposition for SME. The loss of key employees can potentially devastate a small business. Expertise, intellectual capital and critical business intelligence leaves the organization when a key employee walks out the door. This is doubly true if some key employees leave the firm and walk some major client relationships out the door with them.

SME can also try to employ risk transfer strategies. Insurance purchases may help in some areas but to fight inflation small businesses can use financial instruments (capital permitting) to hedge against rising prices. The purchase of TIPs, FX forward contracts, commodity or energy futures can help to offset the negative effects of key inflation business threats. As the price of oil rose this summer a modest equity position in oil or other energy company would have helped to offset the increase in energy expenses.

Thankfully adverse economic conditions will force SME to take an honest look at their product lines and business model. Economic adversity provides an opportunity for management to make hard decisions concerning product lines. This is an ideal time to focus and fund the development of products that offer the greatest potential for long term profitability and sustainable growth.

Inflation is a significant problem for small businesses but it is a problem that can be managed. Changing economic conditions alter the landscape for all businesses that accelerate and starkly reveal market inefficiencies. These inefficiencies create market anomalies and opportunities that astute small business owners and managers can capitalize on through an intentional practice of a risk management and opportunity discovery program.

Sum2’s objective is to assist clients to implement corporate sound practices that enhance profitability and sustainable growth. Sum2’s offers a wide stable of risk management apps for SME. The Macroeconomic Risk Assessment App helps managers review macroeconomic and event risks to better manage its potential effect on their business. Sum2 offers a Macroeconomic Risk App and can be downloaded from Google Play or by visiting http://www.sum2.com or by calling us at 973.287.7535.

risk: #sme, #inflation, #macroeconomic, #supplychain #office365, #mobileoffice, #metasme, #smeiot #eventrisk, #marketrisk, #WIN, #sum2

July 21, 2014 Posted by | banking, customer risk, economics, inflation, SME | , , , , , , , , , | Leave a comment

Big Data for a Small World: SMEIoT


The world is a great big database and algorithmic wizards and mad data scientists are burning the midnight oil to mine the perplexing infinities of ubiquitous data points.  Their goal is to put data to use to facilitate better governance, initiate pinpoint marketing campaigns, pursue revelatory academic research and improve the quality of service public agencies deliver to protect and serve communities. The convergence of Big Data, Cloud Computing and the Internet of Things (IoT) make this possible.

The earth is the mother of all relational databases.  It’s six billion inhabitants track many billions of real time digital footprints across the face of the globe each and every day.  Some footprints are readily apparent and easy to see.  Facebook likes, credit card transactions, name and address lists, urgent Tweets and public records sparkle like alluvial diamonds; all easily plucked by data aggregators and sold to product marketers at astonishing profit margins.  Other data points are less apparent, hidden or derived in the incessant hum of the ever listening, ever recording global cybersphere.   These are the digital touch points we knowingly and unknowingly create with our interactions with the world wide web and the machines that live there.

It is estimated that there is over 20 billion smart machines that are fully integrated into our lives.  These machines stay busy creating digital footprints; adding quantitative context to the quality of the human condition.  EZ Passes, RFID tags, cell phone records, location tracking, energy meters, odometers, auto dashboard idiot lights, self diagnostic fault tolerant machines, industrial process controls, seismographic, air and water quality apparatuses and the streaming CBOT digital blips flash the milliseconds of a day in the life of John Q. Public.  Most sentient beings pay little notice, failing to consider that someone somewhere is planting the imprints of our daily lives in mammoth disk farms.  The webmasters, data engineers and information scientists are collecting, collating, aggregating, scoring and analyzing these rich gardens of data to harvest an accurate psychographic portrait of modernity.

The IoT is the term coined to describe the new digital landscape we inhabit.  The ubiquitous nature of the internet, the continued rationalization of the digital economy into the fabric of society and the absolute dependency of daily life upon it, require deep consideration how it impacts civil liberties, governance, cultural vibrancy and economic well being.

The IoT is the next step in the development of the digital economy. By 2025 it is estimated that IoT will drive $6 Trillion in global economic activity.  This anoints data and information as the loam of the modern global economy; no less significant than the arrival of discrete manufacturing at the dawn of industrial capitalism.

The time may come when a case may be made that user generated data is a commodity and should be considered a public domain natural resource; but today it is the province of digirati  shamans entrusted to interpret the Rosetta Stones, gleaning deep understanding of the current reality while deriving high probability predictive futures.  IoT is one of the prevailing drivers of global social development.


There is another critical economic and socio-political driver of the global economy.  Small Mid-Sized Enterprises (SME) are the cornerstone of job creation in developed economies.  They form the bedrock of subsistence and economic activity in lesser developed countries (LDC).  They are the dynamic element of capitalism.  SME led by courageous risk takers are the spearhead of capital formation initiatives.  Politicians, bureaucrats and business pundits extol their entrepreneurial zeal and hope to channel their youthful energy in service to local and national political aspirations.  The establishment of SME is a critical macroeconomic indicator of a country’s economic health and the wellspring of social wealth creation.

The World Bank/ IFC estimates that over 130 million registered SME inhabit the global economy. The definition of an SME varies by country. Generally an SME and MSME (Micro Small Mid Sized Enterprises)  are defined by two measures, number of employees or annual sales.  Micro enterprises are defined as employing less than 9 employees, small up to 100 employees and medium sized enterprises anywhere from 200 to 500 employees.  Defining SMEs by sales scale in a similar fashion.

Every year millions of startup businesses replace the millions that have closed.  The world’s largest economy United States boasts over 30 million SME and every year over one million  small businesses close.  The EU and OECD countries report similar statistics of the preponderance of SME and numbers of business closures.

The SME is a dynamic non homogeneous business segment.  It is highly diverse in character, culture and business model heavily colored by local influence and custom. SME is overly sensitive to macroeconomic risk factors and market cyclicality.  Risk is magnified in the SME franchise due to high concentration of risk factors.  Over reliance on a limited set of key clients or suppliers, product obsolescence, competitive pressures, force majeure events, key employee risk, change management and credit channel dependencies are glaring risk factors magnified by business scale and market geographics.

In the United States, during the banking crisis the Federal Reserve was criticized for pursuing policies that favored large banking and capital market participants while largely ignoring SME. To mitigate contagion risk, The Federal Reserve  quickly acted to pump liquidity into the banking sector to buttress the capital structure of SIFI (Systemically Important Financial Institutions). It was thought that a collateral benefit would be the stimulation of SME lending.  This never occurred as SBA backed loans nosedived. Former Treasury Secretary Timothy Geithner implemented the TARP and TALF programs to further strengthen the capital base of distressed banks as former Fed Chairman  Ben Bernanke pursued Quantitative Easing to transfer troubled mortgage backed securities onto Uncle Sams balance sheet to relieve financial institutions  of these troubled assets. Some may argue that President Obama’s The American Recovery and Reinvestment Act of 2009 (ARRA)  helped the SME sector.  The $800 billion stimulus was one third tax cuts, one third cash infusion to local governments and one third capital expenditures aimed at shovel ready infrastructure improvement projects.  The scale of the ARRA was miniscule as compared to support rendered to banks and did little to halt the deteriorating macroeconomic conditions of the collapsing housing market, ballooning unemployment and rising energy prices severely stressing SME.

The EU offered no better.  As the PIGS (Portugal, Ireland, Greece, Spain) economies collapsed the European Central Bank forced draconian austerity measures on national government expenditures undermining key SME market sensitivities.  On both sides of the Atlantic, the perception of a bifurcated central banking policy that favored TBTF Wall Street over the needs of  an atomized SME segment flourished.  The wedge between the speculative economy of Wall Street and the real economy on Main Street remains a festering wound.

In contrast to the approach of western central bankers, Asian Tigers, particularly Singapore have created a highly  supportive environment for the incubation and development of SME. Banks offer comprehensive portfolios of financial products and SME advisory services. Government legislative programs highlight incubation initiatives linked to specific industry sectors. Developed economies have much to learn from these SME friendly market leaders.

The pressing issues concerning net neutrality, ecommerce tax policies, climate change and the recognition of Bitcoin as a valid commercial specie are critical developments that goes to the heart of a healthy global SME community.  These emerging market events are benevolent business drivers for SME and concern grows that legislative initiatives are being drafted to codify advantages for politically connected larger enterprises.

Many view this as a manifestation of a broken political system, rife with protections of large well financed politically connected institutions. Undermining these entrenched corporate interests is the ascending digital paradigm promising to dramatically alter business as usual politics. Witness the role of social media in the Arab Spring, Barack Obama’s 2008 election or the decapitalization of the print media industry as clear signals of the the passing away of the old order of things.  Social networking technologies and the democratization of information breaks down the ossified monopolies of knowledge access. These archaic ramparts are being gleefully overthrown by open collaborative initiatives levelling the playing field for all market participants.


This is where SMEIoT neatly converges.  To effectively serve an efficient market, transparency and a contextual understanding of its innate dynamics are critical preconditions to market participation.  The incubation of SME and the underwriting of capital formation initiatives from a myriad of providers will occur as information standards provide a level of transparency that optimally aligns risk and investment capital. SMEIoT will provide the insights to the sector for SME to grow and prosper while industry service providers engage SME within the context of a cooperative economic non-exploitative relationship.

This series will examine SME and how IoT will serve to transform and incubate the sector.  We’ll examine the typology of the SME ecosystem, its risk characteristics and features.  We’ll propose a metadata framework to model SME descriptors, attributes, risk factors and a scoring methodology.  We’ll propose an SME portal, review the mission of Big Data and its indispensable role to create cooperative economic frameworks within the SME ecosystem. Lastly we’ll review groundbreaking work social scientists, legal scholars and digital frontier activists are proposing to address best governance practices and ethical considerations of Big Data collection, the protection of privacy rights,  informed consent, proprietary content and standards of accountability.

SMEIoT coalesces at the intersection of social science, commerce and technology.  History has aligned SMEIot building blocks to create the conditions for this exciting convergence.  Wide participation of government agencies, academicians, business leaders, scientists and ethicists will be required to make pursuit of  this science serve the greatest good.


This is the first in a series of articles on Big Data and SMEIoT . It originally appeared in Daftblogger eJournal. Next piece in series is scheduled to appear on Daftblogger eJournal within the next two weeks.

#smeiot #metasme #sum2llc #sme #office365 #mobileoffice #TARP #capitalformation #IoT #internetofthings #OECD #TBTF #Bitcoin #psychographics #smeportals #bigdata #informedconsent

July 9, 2014 Posted by | banking, Bernanke, commerce, commercial, credit crisis, economics, ethics, Internet of Things, IoT, politics, risk management, SME, SMEIOT, Sum2, sustainability, TALF, TARP, Treasury | , , , , , , , , , , , , , , , , | Leave a comment

Sustainable Economics

We have put our good mother through a lot over the past few million years. Ever since we walked out of the great rift the biospheres dominant species has really left a mark. I know that mark is but a tiny spec on the archaeological record of the earth which spans a few billion years but our impact is unmistakable.
I guess it started with the invention of hand tools, fire, wheels, shelter construction, water cultivation and agriculture. You can’t forget hunting in packs, weaponry, domestication of animals, speech, art and writing. A consciousness of a portfolio of skills, specialization, division of labor and the ability to discern exchange value within the community birthed a notion of governance. Our social nature was crowned with our ability to transmit craft and knowledge to successive generations, assuring continuity and cohesion with a common history and a well articulated cosmology. Put it all together and I think you got your basic modern Homo sapien.
Oh yeah, we also developed a psychology, an ego, that incorporates the primacy of ourselves and our selfish needs. It rationalizes and guides our interactions with nature, transforming the intention of our labor into a transaction that alters the conditions of the environment. It also serves as indisputable empirical evidence of the master species, elevated above all others as time marks the progress and dominion of the human race.
Our dominion has been codified into our sacred literature. Our creation stories and cosmic mission statements expressly state to exercise our dominion over nature, to propagate the species and to be fruitful and multiply. The screaming unencumbered id, left to its own devises, unchecked in the grand supermarket. We human’s have succeeded beyond our wildest expectations and the species continues to be fruitful and multiplying. 
We sojourn on, notching the ladder of history with marks of our progression through the ages. Along the way we Cro-Magnons expropriated the Neanderthals and moved into their Mediterranean digs complete with fire pits, burial chambers and the best take on modern art until Picasso came along.
I guess that’s the point. Our survival comes at the expense of other creatures and things. I’m no Malthusian, but Tom Friedman’s flat world is getting crowded.    And as we celebrate the 44th Earth Day a midst the greatest die off of species since mankind coronated himself as master and commander of all things earth; it may be time to consider how our dominion is hampering the well being of the lesser flora and fauna kingdoms and what we can do to begin the practice of a more sustainable economics.
When I look at Las Vegas, I behold a garish mecca of capitalism on steroids.  I’m overwhelmed by the banality of the the things we so highly esteem. A community venerated and propped up on the foundation of vice, hedonism and the radical pursuit of money. Unbridled development of a crystal neon city constructed in the middle of a desert, recklessly consumes water and energy resources and misdirects human capital to maintain the facade of an unsustainable economy. 
Phoenix poses the same paradox. Darling child of the credit boom, Phoenix is a city consuming itself. The rising threat of climate change, blistering heat, dwindling water supplies and raging haboobs would give any urban planner reason to pause. A bustling city of many millions of striving citizens consuming energy, water and human capital built on the unsustainable foundation of excessive consumption and an unrealistic valuation of the capital required to maintain it. 
The explosion of fracking natural gas deposits in the Marcellus Shale formation is another example of sacrificing long term sustainability for the immediacy of shareholder returns. The Marcellus Deposit has proven reserves that only last a decade. As evidenced by the hyper development occurring in North Dakota,  economies tied to resource extraction are prone to experience classic boom bust cycles. During boom times all is well. But the good times don’t last all that long and communities are left in the wake of the bust cycle to deal with the aftermath. 
The Keystone XL Pipeline and the rapid expansion of the LNG extraction industries are being touted as the foundation of American energy independence. But this energy resource extracts a high cost on the land and its natural bounty. It poses significant risk to water aquifers, air quality, wildlife and the storage of waste-water byproducts will present long term remediation challenges to communities for many decades after the last well is capped.
Our new found fortune of LNG comes with a significant opportunity cost to develop alternative energy sources as it continues to tether our economic dependence on a dwindling supply of fossil fuels. Perpetuating this dependence also requires us to expend huge sums of money on the military. The political arrhythmia in the Ukraine and the keen interest of the United States has much to do with the changing political economy of fossil fuels and the protection and accession of markets.
Sustainability requires a new approach to the emerging realities of the global political economy. Recognition that competing interests bring important capital to the table, and that all must be recognized and fully valued in the new algorithms of sustainability is the keystone and pipeline of sustainability. The practice of unfettered development is unsustainable. Regulation, arbitration and revitalization cannot be sacrificed at the altar of laissez-faire politics that only serves to widen the wealth gap at tremendous social cost. The politicization of economic policy cannot continue to be beholden to rampant monetization. Sustainability is the creation of long term value for a diverse community of stakeholders. It needs to become our guiding mantra as the global population approaches 8 billion souls. Happy Earth Day.


Music Selection:

Risk: fracking, political, water, air, war, opportunity cost, renewal clean energy, climate change

April 22, 2014 Posted by | cities, commodities, community, compliance, corporate social responsibility, ecological, history, politics, psychology, regulatory, sustainability | , , , , , , , , | 1 Comment

SMEs Dance to the Basel III Shuffle

cap structure sme eu.PNG
I often wonder, what if Basel II capital accords had been in place prior to the Great Recession? 
Could the devastating crisis fueled by the serial pops of credit bubbles rumbling through the dismal landscape of G20 principalities been avoided with better capital adequacy safeguards? 
Could the precious Post Cold War Peace dividend been preserved; had the fiduciaries of global solvency not toppled the dominoes of economic prosperity and political stability through extreme selfishness and irrational behavior?
Some economists assert that had the guidelines of Basel II been in place it would not have mattered. That may certainly be true, but one is still left to wonder if Systemically Important Financial Institutions (SIFI) had followed better governance frameworks the fissures emanating from the epicenter of the global economic meltdown would not have been as deep or as widespread.
The lessons learned from the crisis are being codified in the new governance frameworks of Basel III. Whereas previous Basel Accords focused on capital adequacy and loss reserves aligned to risk weighted assets and counterparty exposures, Basel III looks to strengthen capital adequacy by addressing liquidity and leverage risk in the banks capital structure. Basel III recognizes the primacy of mitigating the systemic risk concentrated in the capital structure of a SIFI and lesser designees, and the contagion threat it poses on its counterparties and the greater economy. 
To ally solvency concerns, Basel III installs a leverage ratio and bolsters its Liquidity Coverage Ratio (LCR) which will require all banking institutions to increase its regulatory capital reserves of High Quality Liquid Assets (HQLA). An increase in HQLA reserves will raise the cost of capital for all financial institutions requiring it to raise its spreads on credit products. 
SMEs will be particularly affected by Basel III initiatives. SME’s are highly dependant on bank capital and credit products and remain highly sensitive to the cyclicality of macroeconomic factors. D&B’s Small Business Health Index reports that SME business failures in the US were in excess of 140,000 per month in 2013. The OECD reported that during 2012 over 800,000 EC SME’s closed shop in 2012. 
Eurofact reported that 60% of all non-financial value add to the EC economy is attributable to SMEs. Though SMEs are generally recognized as principal economic drivers in both the developed and lesser developed economies; during the economic crisis SME’s were rationed out of the credit markets. Large capital infusions and accommodative monetary policy by the central bank authorities principally sought to bolster bank capital and inject liquidity into the faltering global banking system. 
As such much of the low cost capital provided to banks did not trickle down to SMEs. Better returns were realized by deploying capital to investment partnerships, energy resource development, the acquisition of strategic commercial enterprises and underwriting speculative trading in the global security markets. 
Little of the low cost capital found its way onto Main Street; driving the bifurcating wedge between the real and speculative economy. As a more conservative political landscape emerges from the wreckage of the economic calamity created by “elitist” financial institutions and “remote” Brussels based government bureaucrats, the cause of the SME is resonating in the rising voice of a middle class spoken with a distinct nationalist accent. 
Politicians, legislators and advocacy groups are fully invested in the cause of the SME. Stakeholders are advocating more government involvement to underwrite and guarantee sponsored loans. In an era where government involvement in markets is under severe attack, political expediency and prudent economics coalesce to fund the incubation of SMEs. Even if greater government intervention is counterintuitive to laissez faire proclivities of the politically engaged, higher taxes would be required to fund the risk of capital formation initiatives. The securitization of SME loans is also a consideration; but aversion to leverage and the risk to encourage poor lending practices raise fears of creating yet another credit bubble.
The Government of Singapore recently rose its guarantee on SME loans to cover 70% of principal in response to the increase in cost of capital banks will charge as a result of Basel III. Spreads on SME loans are estimated to increase between 50 to 80 basis points. This rise in the cost of capital will allow banks to recoup Basel III compliance expenses associated with the segregation of regulatory capital requirements to service SME loan portfolios.
The risk premia on SME loans is justified by regulators because it guarantees the availability of credit through the business cycle. The financial health of SME’s are highly correlated to the vicissitudes of the business cycle. During times of cyclical downturns risk factors for SMEs are magnified due to the prevalence of concentration risk in products, regions, markets, client and critical macroeconomic factors germane to the SME’s business. Mitigation initiatives are inhibited due to liquidity constraints, resource depletion and balance sheet limitations. The closure of credit channels exacerbates this problem and Basel III risk premia pledges to fund SMEs through a trying business cycle.
To maintain profitability of SME lending, banks will enhance quality standards and haircut collateral margins; a potentially onerous demand since asset valuations remain severely distressed from the effects of the Great Recession. Banks will avoid SMEs with enhanced risk profiles, make greater use of loan covenants, expand fee based services and hike origination fees to protect margins and instill enhanced credit risk controls to minimize default risk.
As the strictures of Basel III take root within commercial banks alternative credit channels are opening to better match an SME’s credit requirements and market situation with a financial product that best addresses their business condition. D&B has initiated a timely capital formation initiative for SMEs. Access to Capital – Money to Main Street is an event tour that is bringing together regional providers of funding for SMEs and startups. 
The economic recovery is combining with technology to energize innovations in SME funding options. Crowd-funding, micro-lending, asset financing, leasing, community bank loans, credit unions and venture capital channels are a few of the many options available for small business funding. Each channel offers distinct terms and advantages that match a funding option to the specific situation of an SME. 
SME associations and advocacy groups are surfacing in the EU that seek to harness the residual capital created by SME failures. Second Chance and Fail2Suceed are initiatives that seek to harness the intellectual capital garnered by entrepreneurs in unsuccessful enterprises. It is a clear recognition that a great failure can be the mother of greater wisdom. This may augur well for the success of Basel III as it seeks to build on the shortfalls of its forebears to better protect the global banking system as it promotes the wealth of nations by equitably funding the growth of the global SME segment.
Sum2 offers a portfolio of risk assessment applications and consultative services to businesses, governments and non-profit organizations. Our leading product Credit Redi offers SMEs tools to manage financial health and improve corporate credit rating to manage enterprise risk and attract capital to fund initiatives to achieve business goals. Credit Redi helps SMEs improve credit standing to demonstrate creditworthiness to bankers and investors. On Google Play: Get Credit|Redi
Risk: SME, Basel III, commercial lending, political stability, economic growth, USA, EU, alternative credit channels, credit risk, global banking, business failure, OECD, SIFI
This article was originally released on Daft Blogger.  

April 14, 2014 Posted by | Uncategorized | , , , , , , , , , , , , , | 1 Comment

Measuring SME Credit Risk

ImageThe underlying financial health of Small Mid-Size Enterprises (SME) has always been difficult to determine, hard to identify and its never been more important.

To manage risk in the credit and capital markets it is critical for lenders and credit suppliers to understand the relative financial health of counter-parties, customers and suppliers. Effective credit extension decisions cannot be made without superior analysis generated by forward-looking, unbiased tools.

The credit crisis and recession has devastated small and mid-sized businesses. Getting a bank loan or securing capital from investors is a big challenge for small businesses. Banks have become extremely cautious in lending to small businesses. To be successful in securing credit you’ll have to demonstrate that you are a good credit risk, that your company’s prospects for growth are strong and that your business model is sound.

Why Credit Score is important?The quality of your credit rating and financial health form the basis for decisions other businesses make about you. Managing your business to improve your Credit Score will improve your company’s financial health. A strong Credit Score indicates good financial health and is used by lenders, capital providers, customers and suppliers to determine:

  •     How much business credit a supplier will extend to you
  •     What interest rates you will pay
  •     How much money lending institutions will loan you
  •     How your customers view you
  •     What your insurance premiums will be
  •     The level of potential investor interest

Sum2 utilizes Altman’s Z Score method to determine fundamental financial health ratings.  The Z Score credit rating is valid measure of financial health for any public or privately held corporation. The Z Score rating methodology is a proven credit risk indicator that is widely used by banks, investment managers, Fortune 1000 companies and small to medium sized enterprises to determine and manage risk. Sum2’s clients use the Z Score rating products to determine financial health, remain in compliance with loan covenants, and assess credit worthiness of clients and mission critical suppliers.

Altman’s Z score method examines fundamental financial data derived from a company’s balance sheet and income statements.  A credit rating is generated by the use of ratio analysis that yields valid comparative results regardless of the currency utilized. Working capital, earnings, reinvested earnings and leverage are integrated into a composite credit rating score. The components and standards are similar to those used by traditional lenders. It is an easily understood approach that provides comprehensive financial details not available with the standard agency reports.

Click here to access Sum2’s Z Score Input Template.

Click here to access zip file of sample reports. Palm Corp Z Score Report.

We recommend supplementing the analysis with trade reports from firms like the Credit Management Association (CMA) or Experian and others for their pertinent data and services.Businesses that extend credit can determine cutoff scores needed to qualify for credit as their risk tolerance and economic conditions change. Lower scores and classifications indicate higher probabilities of default.

Credit ratings must include a careful analysis of the income statement, balance sheet, changes in financial position and key metrics along with consideration of trends, economic conditions and other available data.

Credit|Redi is a set of business assessment tools that helps businesses determine credit worthiness.  It is a critical business tool SME’s need to incorporate to better manage and assess credit risk.

More information on how to manage credit risk can be found here: Credit|Redi

June 12, 2013 Posted by | Uncategorized | Leave a comment

Paterson Art Walk


It rained all week in Northern New Jersey. The entire Passaic watershed is saturated and as it drains the Great Falls roars with the swelling volume of racing water as the river makes its way to its ultimate release into the Atlantic. Its a good metaphor for the surging rebirth of Paterson as a revitalized center of commerce and culture.

Long a typical neglected northeastern industrial city in decline, Paterson is experiencing a vibrant transitioning and repurposing of it’s heritage as a manufacturing center thanks in part to The Art Factory.

The Art Factory is an incubator encouraging the formation and growth of the creative arts industry. Tourism and cultural enterprises that attract tourists are critical economic drivers necessary for the rebirth of Paterson.  The Art Factory’s offering of working space for artists and commercial enterprises is a critical initiative seeking to build on The Great Falls Historic District’s recent National Park designation that anchors the city’s hopes for a long awaited revitalization.

 The Art Factory is busy renovating the once dilapidated Dolphin Jute factory space and filling it with the creative energies of up and coming professional artists looking for commercial acceptance of their art.

Memorial Day weekend, The Art Factory’s Art Walk showcased a torrent of local artistic talent. The volume of exhibits compliments the range and scope of quality art that met and exceeded the expectations of the many patrons and enthusiasts eagerly exploring a labyrinth of cavernous exhibition rooms located throughout the century old industrial complex.

Indeed half the fun of The Art Walk is making your way through the multiple floors of exhibition space. The thrill of walking stairwells and darkened brick laden passageways opening into old shop floors flooded with art, bathed in the light of industrial windows framing cityscapes of surrounding street life, wooded hills of Garret Mountain and historic skyline of Paterson. Or descend into the bowels of the old factory’s basement storage areas carved out of granite bedrock bleeding water, showcasing multimedia sculptures divined from the subterranean strata of broken bricks, steel scrap, rubbish bins, wooden pallets, cardboard packaging, dexterous hands and fluid imagination.

One of the great pleasures of The Art Walk is experiencing how the art interacts with industrial space. A virtue of The Art Factory is its mission to repurpose dormant manufacturing space and refill it with the creative energy of artists. A great portion of the art on exhibit in The Art Walk addressed the idea of repurposing, industrial stasis and the human and ecological cost of industrialization.

The idea of repurposing industrial artifacts and disposable waste to portray the human cost of rampant consumerism was intelligently portrayed by conceptual artist Aleksandr Razin and his bold installation Jurassic Park.

Comprised of 4 extensive installations filling a large basement space; The Mosquito, (68’x 20’ x 12’); The Paterson Butterfly (51’x54’x12’), The Grasshopper (35’x45’x13’) and The Fly (54’x55’x20’); Jurassic Park was fully constructed from materials culled from the excessive waste of our throw away consumer society. Each installation appears as though its belongs in the dank basement of an industrial complex.

One piece, The Caterpillar, is a boxed construction of corrugated cardboard enclosing an inner lighted workplace of benches, machines, tools and cabinets. One can look inside the caterpillar through windows or enter the piece from an hidden doorway. From the outside the cardboard construction looks like its about to collapse from flimsy construction materials. A caterpillar suggests transition but once inside the caterpillar I imagine a shift of workers trapped in a dangerous workplace at risk of imminent collapse. Certainly a timely observation given the recent catastrophic collapse of a Bangladesh textile factory killing over 1,000 workers manufacturing high end clothing for some of the leading western fashion brands.

The Mosquito installation was equally unsettling. Inside The Mosquito we find outdated school rooms. We can only surmise how school systems are challenged by obsolete teaching methods and institutional distress. Are schools like a mosquito, sucking the life blood out of society’s young minds? To paraphrase the artist statement, Mr. Razin asserts, the size of the installation suggest extinct dinosaurs and that out of control consumerism and toxic waste is threatening life on earth.”

Another large subterranean installation offers a complex tube structure of air blown inflated denim. A haunting soundtrack of industrial sounds echoes through the room; as sparse lighting casts long shadows of the piece and patrons onto walls of bedrock and weathered brick. The patron assumes the role of a consumer who becomes complicit enablers trapped in the denim web of global trade built on the exploitation of third world textile workers.

Jonah The Prophet and The Gates of Hell completed a trinity of subterranean social commentary installations. Jonah, a suspended wire piece portrays a figure devoured by a fish. The room’s floor was covered in broken brick. Scattered cubicle panels lined the walls. Here in the lowest level of The Art Factory we have been consumed, entrapped in the prison of industrial monotony.

 The upper floors of the show mostly featured portraiture, photography and small sculptures. An installation on Industrialism portrayed the hard edges of industrial capitalism. An oil painting, Made In China sympathetically portrays a child attached to a sewing machine.  Its a striking depiction of western consumerism complicity in enabling child labor.

With the exception of the basement installations, for the most part politics and social commentary was absent from the Art Walk. The pieces were clearly positioned for sale; and as I said earlier the quality and subject matter of paintings make this art highly marketable. Refreshments, bands and a wedding added an air of festive lightness to the day and set a consumer friendly atmosphere to The Art Walk.

And that’s how it should be. Though I couldn’t discern any major artistic breakthroughs, commercial development and the art of capitalism is the star of this show. Bravo The Art Factory and The Paterson Art Walk. The journey back from economic doldrums has begun in Paterson and The Art Factory and The Art Walk is a big first step in that journey.

Music Selection: Fats Domino, I’m Walkin

risk: urban renewal, small business, tourism, culture

May 28, 2013 Posted by | art, commerce, culture, manufacturing, Paterson, photo | , , , , , , , | Leave a comment

Bonfires of the Banalities

Sarah PalinWhen the mundane becomes revelatory, when banal pronouncements are considered startling epiphanies, when orchestrated spectacle is considered the apex of statesmanship; a society is fast approaching the finish line in its race to the bottom.

The corrupt leaders of society’s broken institutions remain busy spinning a self serving zeitgeist of denial, sowing gardens of ubiquitous ambivalence.  The liturgy of mass self delusion anoints a polity comfortably numb and safely ensconced in a political paralysis; keeping the Bozos bouncing along on the bus sans wheels, happily enthralled in the reverie of their disillusionment.

Sarah Palin, looking slim and extremely fit slugs down a mega calorie Big Gulp on the CPAC dais. Sarah’s slurp becomes an iconic moment in GOP history, as fawning star struck conservatives believe it to be the symbolism of a new Statue of Liberty.

Morning Joe stuffing handfuls of Captain Crunch into his mouth to tweak the eat healthy nose of liberal manikin Mika, cheers the American driving public for making the 6 mpg Super Duty pickup the best selling truck in the USA.  Morning Joe relishes any opportunity to confirm the resplendent truth of America’s voracious appetite for radical entitlement.

Newly elected Pope Francis closes his first Sunday address by advising visiting pilgrims to “have a good lunch” and the media falls all over itself with adulatory elation.

In a world understood as a branded sound bite, the affirming credo an individual adopts as holy gospel is self serving institutional propaganda that vigilantly defends the status quo.

In such a world, sound bites have become a school of famished piranhas that are devouring the body of rational understanding and the ability to peek beyond the veil of obfuscation.

The messages and symbolism signaled from our leaders and political celebrities is clear, loyal constituents are offered an absolution to remain stuck in the certitude ensuring the perpetuation of failing institutions badly in need of reform.

The CPAC crowd cheers Palin’s clownish moxie as she charges the battlements of Bloomberg’s Nanny State.  Though I wonder if Palin’s salute to Seven Eleven was more of a product placement exercise than astute Kabuki theater; Palin’s masterful pandering played well to the partisans.  She brought down the house and successfully sidestepped the issue of a commercial food chain that is progressively poisoning their customers with unhealthy food due to lax regulatory oversight, harmful food additives and corn fructose syrup infused processed food that is driving an obesity epidemic amongst the poor and minorities residing in the food deserts of America’s cities.

Palin’s showmanship appeals to the growing libertarian streak in the GOP.  Let the market decide is the mantra. The jury is out but when the toxic food chain has killed off enough of the process food industries customers, General Foods will hire a Stanford MBA as a new product manager to design and market better foods for a better world. After all that’s how responsible job creators work.

Mornings Joe’s insistence on his free market right to be a mindless consumer is codified in the divine celestial ledgers of Laissez-faire capitalism.  His fattened bank balance is the sole moral imperative to drive an inefficient gas guzzling truck that poisons the environment with carbon emissions. This is the same mind set that insists on building vacation homes on barrier islands. If a major storm destroys the dwelling so be it. FEMA and private insurance have socialized the risk to preserve the right of these homesteaders to settle on endangered land, tipping into the swelling seas, fueled by a changing climate brought on by excessive carbon emissions from Morning Joe’s Super Duty.

In the aftermath of the Newtown Massacre the yearning of citizens to strengthen gun control laws is met by the intransigent commercial interests of gun manufacturers.  In a society bleeding from gun violence the NRA got busy greasing the palms of senators with filthy lucre to encourage diligence to protect 2nd amendment right to market high powered automatic rifles and 30 round magazines that can spray instant death into a room full of 1st graders.

Wayne LaPierre, the CEO of the NRA gave an impassioned speech at the same CPAC conference pointing to “the Washington elites” and “liberal media” as the root of all evil.  States LaPierre, …gun control advocates “insult [us], they denigrate, and they call us ‘crazy’ for holding fast to [our opposition to gun control]. In their distorted view of the world, they’re smarter than we are; they’re special; they’re more worthy than we are; they know better than we do,” he said. “The liberal media can keep hating on me, but I’m still standing.”

How the CPAC attendees and the three million members of the NRA can fail to see the irony in Mr. LaPierre’s condemnation of “Washington elites” escapes me.  To be sure, like many CPAC attendees, Mr. LaPierre and the NRA are fully integrated with the elites of Washington.  In point of fact many are on the NRA payroll.  His pernicious attack on a free press belies his unquestioned fealty to the constitution.

Which brings us back to Pope Francis.  He is hailed as a much needed change in a scandal ridden Vatican.  The global prevalence of sexual abuse by clergymen and the institutional protection of predatory pedophiles continues to trouble the church.   Money laundering and other untoward financial transactions conducted by the Vatican Bank is another explosive issue that continues to fester.  The rising voices of women and LGBT communicants seeking reforms to fully enfranchise them as equal citizens in the church are liturgical and theological issues that will continue to be repressed. These questions beg an urgent response from the ossified paternal hierarchy that resists transparency and fails to transcend practices that sacrifices the faith in service to the institutional religion.

Yes the monied pilgrims that made their way to Rome will enjoy the day and most surely find a wholesome meal to eat. What will sate today’s pilgrims and sustain the future generations will be to sit at an inclusive communion table to richly feast on the bread of truth. Throw the institutional banalities into the ovens to stoke the fires capable of baking a rich wholesomeness into the glorious bread of life.

Music Video: Fleetwood Mac, Hypnotized

Risk: political, religious, psychological, cultural

March 19, 2013 Posted by | conservatism, faith, gay rights, LGBT, Palin, psychology, religion, republicans | , , , , , , , , , , , , , , , | Leave a comment

Blog Action Day: The Power of We

 We the People, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.  Thus begins some of the opening words to the constitution of the first constitutional republic of the modern world.

Seems fair, simple and plainly spoken.  We the people ordain a constitution, a social compact, consenting to be governed in the expectant hope that domestic tranquility and the blessings of liberty for all living and future citizens will be respected and protected.  It was a revolutionary notion for its time and is still the ideal democratic republics aspire to realize and practice.  It is an idea that moves masses of people throughout the world to come together, demonstrating the collective strength of the “power of we”.  It’s very notion sets people in motion to force intractable power elites whose rule is based on custom and the vanity of tyranny to cede authority to the democratic impulses of a people’s fight for the consent to be governed.

Last years Arab Spring demonstrated that the democratic aspirations of people remain alive.  It took a massive movement of people, willingly sacrificing life and limb and the safety of loved ones to dispose of dictators and their self serving regimes.  The fall of Hosni Mubarak in Egypt and Muammar Gaddafi in Libya were startling events in the rapidity of their downfall; and as an emblematic revelation of the fragility of tyrannical rule.  It also born hope in the hearts of people living under unelected rulers that change could happen if the “power of we” was focused on the task of disposing a regime whose sole goal was self enrichment and the perpetuation of its rule.  As the conflict in Syria grinds on, the world witnesses the awful cost of the struggle against tyranny. It’s a damning condemnation of Bashar al-Assad’s vanity of power and a moving example of the price human beings are willing to pay to realize the blessings of liberty that  many citizens living in western democracies too often take for granted.

As the United States contentious presidential election comes to a close, I hope that my fellow citizens understand the dear price people are paying to have some semblance of a representative democracy.  I also hope my fellow citizens realize that the duopoly of power exercised by the ruling democratic and republican parties represent economic and political interests that run counter to the interests of the vast majority of We the People.  I hope my fellow citizens understand that the two ruling parties are a class of political elites that have governed to serve the perpetuation of their rule,  financed by an embedded plutocracy that continues to enrich itself with the complicit enabling of democratic and republican party officials.

In this election cycle, my fondest hope for America is for my fellow citizens to break the stranglehold of self serving two party rule.  We must begin to adopt the ideas of progressive third party candidates, like The Green Party.  We must elect candidates that are free from the bought shackles of favoritism and patronage. Thus remaining free to pursue a moral and ethical conscience that advocates liberty, equality of opportunity and civil rights for all citizens.  We must also prepare to engage a political movement that goes beyond the ballot box, becoming activist citizens to win a future that promotes the ecology of a balanced sustainable path of growth, peace and prosperity for all.

 risk: politics, economics, environment

 Music Selection: John Lennon, Power to the People

Blog Action Day Post: The Power of We

October 16, 2012 Posted by | Civil Rights, democracy, government, republicans, social unrest | , , , , , , , , , , | Leave a comment

Chris Christie Blows Into Tampa

As a strengthening Hurricane Isaac takes aim on The Big Easy, seven years to the day of Katrina’s catastrophic devastation, an even bigger bag of wind is set to be unleashed tonight in Tampa as NJ Governor Chris Christie takes the podium as the GOP’s Presidential Convention keynote speaker.

For the past week Chris Christie has been the topic du jour of all the news shows. Morning Joe, Good Morning America, News 12 New Jersey and the front pages of the local press have paraded and fawned over the GOP’s ascending star as if he were the second coming of Abraham Lincoln. 

Journalists ask Christie if he intends to unleash his “fire and brimstone” Jersey hubris during his keynote speech. His tough talking, take no prisoners’ attitude seems to be all the rage in Republican Party circles these days. When GMA host George Stephanopoulos asked Christie if he represented the GOP mainstream Christie answered, “I’ve been to over thirty states since my election as Governor and everyone has welcomed me with open arms. With me you know who you’re buying.” Indeed Christie’s value as a political celebrity is rising. In his brief tenure as Governor he spends a lot of time jetting about the country, politicking for himself and the GOP. He’s been out raising funds for his reelection campaign and his coffers are overflowing with out of state money from his well heeled big time 1% contributors. Mr. Christie’s discerning buyers know what they are purchasing.  His hubris is a nice word for his arrogance and opacity that are the hallmark of the political deals he’s cutting for his out of state friends when he arrives back home in the Garden State.

Christie’s supporters love his tough talking style but his tough talk is nothing more than the arrogance of power, the political and economic elites employ to cover their back room deals. Christie’s tough talk is nothing more than a front to deflect. When a reporter asked Christie about failing water delivery infrastructure and its impact on public health, the tough talking Governor answered “Did I say on topic? Are you stupid? On topic, on topic. Next question,” Christie said to the reporter. “Thank you all very much and I’m sorry for the idiot over there.” Christie also scored big with anti-union and privatization of education supporters by calling public school teachers, “drug mules”.  Its a denigration unworthy of a governor and a damaging characterization of professionals working within a systemically challenged public school system.

Yeah Christie’s a real bad ass tough guy. When a Navy veteran asked for more details from Christie about the proposed merger between Rutgers Camden and Rowan University, he called the gentleman an idiot and used the power of his pulpit to brow beat and insult the man; who had every right as a citizen and taxpayer to receive a respectful reply to his question. This week Christie is crowing that he finally closed the Rutgers/Rowan deal with the bipartisan help of his lap dog democrat friends; as details concerning the financing and costs of the project remain obscure. It will be left to vigilant citizens to follow the money and see where and how state funds will flow into which private hands.

Yes Christie and his GOP supporters may love his tough talking but I suspect they pay a premium for the Christie brand because he knows when to keep his fat mouth shut. Sure their thankful when Christie refuses to shed any light on his business dealings and political moves. Christie’s less then transparent appointments of commissioners to the NJ Highland Commission allowed the governor to pack the oversight board with pro-development interests. The NJ Highlands is a sensitive watershed region for millions of state citizens. In a densely populated state like New Jersey, protection of water resources and environmental conservation should be priorities but out of state El Paso Corp has eminent domain to dramatically expand its pipeline through the ecologically sensitive area to deliver natural gas extracted from the Marcellus Shale deposit. Is this the fruit of Mr. Christie’s cross country road show to interested buyers?  Christie’s short term profit is New Jersey’s long term problem.

In another strange case of the bloviating governor going mute is his refusal to provide insights into his interests and practices in a privately run prison halfway house business that regularly receives state funded taxpayer money. Governor Christie, “the entrepreneur” catches a bad case of laryngitis when asked to provide insights into his cashing in on the privatization of the prison system and the rent seeking practice of his company using government funds to provide substandard service.

Yeah they’ll be a big wind blowing through Tampa tonight that will rival anything Isaac can throw at New Orleans. Christie will crow about the New Jersey miracle since his governorship began but statistics show that the state is lagging its Mid-Atlantic rivals. Facts and politicians seem to be two mutually exclusive matters so it shouldn’t present an obstacle for Christie to say or claim anything the tough talking Jersey Dough-boy claims as truth.

This is particularly true of a fact based, reality challenged Republican Party that believes there is no science to support climate change, the idea that public schools are a liberal conceit, the notion that women rape victims can’t get pregnant, progressives are enemies of the state and to preserve the constitution we must withhold the rights of some citizens. If you think that this is an unfair shot at the GOP mindset, did you see the GOP California poster of Chris Christie riding a surfboard? Talk about a problem with the concept of reality.

Music Selection: Beach Boys, Surfin Safari

Risk: truth, transparency, civil discourse, consensus

August 28, 2012 Posted by | democrats, elections, labor, labor unions, republicans | , , , , , , , , , , , , , , , , , | Leave a comment