Tuesday, October 31, 2006

Extortion: The New Business Model

Update 11/1 -- Jihndal joins the party of Tony Soprano. From the John Maginnis' column in the 11/1 times-Picayune: "If the Republicans lose, it will eliminate any chances of getting [offshore revenue sharing] done in the next Congress."
Do things our way, or we will make you suffer. Give us the money and no one gets hurt. That's the message New Orleans has gotten from corporate America, and yesterday's Times-Picayune brings us the same message from Washington.

Buried in the page A5 election story "GOP's maestro conducting 11th-hour drive to win races" we learn that the White House will channel millions of dollars in disaster aid following a winter storm in New York to the district of a struggling four-term GOP congressman, just weeks before the November election.

Why would someone as crafty as Karl Rove (the maestro of the headline) let this crass use of our taxpayer dollars to buy votes leak out into the press? Well, it ran in the T-P, didn't it? Message received: if you want your disaster assistance, you better vote for us.

You might be shocked, but I'm not. This is in perfect keeping with other developments here in Louisiana of late. Waste Management Inc.'s nasty comments this suummer that closing the Chef Menteur landfill could add years to demolition and clean up in Lakeview, Gentilly and the Ninth Ward, and the announcement that Entergy would seek higher rates with or without a federal rescue, puts me in mind of the behavior of other corporate behemoths, particularly the insurance industry in the aftermath of the Federal Flood.

Waste Management's problem: the nearest legal demolition dump is across the river, and others are across the lake. I know crossing any of the bridges in the increased commuter traffic is a bit of a hassle, but to suggest that the work of months will become the work of years because of adding a few miles to each truck trip is ridiculous. It sounds like nothing more than a chapter in the as yet unwritten Tony Soprano's Guide To Business Profits Galore!, which I expect to see the next time I have reason to open an in-flight magazine.

Entergy's position is worse. They not only want to recoup the costs of damage caused by the storm and flood, but are demanding that the lost income (and profits) of late 2005 be made up as if nothing had happened, even through there were no customers here to purchase electricity, and no network to deliver it. Still, they must be paid for this by the feds or there will be dire consequences of us.

Extortion, it seems, is the newest business model. Corporate America has just about exhausted ways to increase productivity while reducing costs short of repealing the Thirteenth Amendment and reinstituting slavery and indentured servitude. These companies are struggling to find news ways to wring more money out of consumers while delivering less, to ensure not just a steady stream of profits to their shareholders, but a steady increase in their loot-to-suit ratio year to year.

Waste Management doesn't want to have to haul demolition waste out of Orleans Parish, as this would add to their costs, so it's open our landfill or we will end the rebith of New Orleans. Entergy, after years of sucking out profits from Orleans Parish to their holding company's corporate headquarters, refuses to send back one penny to rebuild New Orleans's infrastructure. The cash vacumn is a one way pipe they tell us, by law.

The insurance comapnies? What more can I say about their efforts to shift all risk out of their business onto consumers and the government while demanding huge increases in premiums? Others have made the case better than I. It sure beats having to make an honest living in business by balancing risk and profit. And all of these companies have managed (with the help of their friends in government, nice folks like Dick Chenney who still collects a check from Halliburton for past services while steering them billions in Katrina and Iraq booty), to rig up the system so that their own version of extortion and racketeering is perfectly legal.

I want to propose a straightforware solution, a way to rein in this sort of corporate shakedown. We should adopt the good old fashioned notion of running government more like a business, adopting their best business models. I would start by requiring each named officer--CEO, President, all those silly, pointless vice-presidents--of any company seeking to do business in Louisiana (or to receive recovery funds anywhere) to post a special bond, a surety against reasonable performance.

They should be required to give us one of their children to hold hostage.

Now, I'm not saying anything bad would happen to their kids if their parent (companies) should decide, say, to stop writing insurance in Louisiana. But if you think about it, there seems to be a shortage of suitably cute and healthy children of the sort childless couples all over American would love to adopt. People spend all sorts of money flying to Asia and Europe to get the child of their dreams.

So, if one of these companies gets out of line and starts trying to cheat us, we auction the kids off to the higest bidder.

Before you get all up in arms about this, I would suggest that the bidders be carefully screened to make sure they are good people of the highest moral character. We would need to do this to keep someone from, say, Allstate or State-Farm from trying to game the system by cheating us and then just building the cost of buying back the kid into their costs. Because, frankly, I don't think the officers of these corporations would meet our high moral standards.

That's the real problem with this idea. These business leaders are the sort of people who rushed in to harvest the vastly overpriced recovery contracts offered by their political cronies, the people cheating the devestated out of their insurance settlements, the ones who aren't afraid to threaten us with dire consequences if we don't do as they say. These are not just people who would kick you while you're down, they'd hire some illegal alien (and forget to pay them) to kick you until you stopped moving to minimize the effort required to take your wallet. It's entirely possible that they wouldn't give a rat's ass about their children if there were money to be made, all of the efforts to repeal the inheritance tax nonwithstanding.

Still, I wonder what we could get on eBay for a clean, well-behaved child with good teeth? Probably not enough to compenstate all of the people who are being denied their insurance payouts, but it would be a start.

A classic, Mark. Love the bit about the korporate kid auction.
You must have missed the Bell South piece on the news a few weeks ago. They said that Neighborhood Groups were slowing the Recovery Process by not allowing Bell South to place equipment on Neutral Grounds. In my neighborhood Bell South slammed in one of those giant boxes left the old one and all the trash and wires strewn about. That was a year ago...
It is the Corporate Version of Blame the Victim
Great post Mark.
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