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For service and not for profit PDF Print E-mail
Written by Ozaukee Press   
Wednesday, 19 October 2016 18:26

The CEO of Wells Fargo Bank finally got it.

In appearances before Congress, John G. Stumpf didn’t seem to understand why senators and representatives from both parties were so mad at him.

He showed no signs of understanding that creating bogus credit card accounts and fake bank accounts in the names of millions of people, bilking them for millions of dollars in bank fees, perpetrating frauds so widespread that his company was fined $185 million by federal regulators and firing thousands of low-level bank employees for these deceitful business practices but holding no company executives, least of all himself, accountable were reasons for outrage. 

He didn’t seem to get it either when Sen. Elizabeth Warren told him, “You should resign.”

But then he got it. Or, rather, his board of directors got it, and forced Stumpf to submit his “retirement” letter last week.

The Wells Fargo scam had been going on for years, which suggests a corporate culture so corrupt that, like its CEO, it was blind and deaf to basic principles of morality, ethics and simple honesty. 

That culture is all too familiar. The worst financial crisis since the Great Depression was caused by the unethical, dishonest lending practices of giant banks. Uncountable deaths were caused by tobacco companies that hid evidence of the link between cigarettes and cancer as they hyped their product to unsuspecting smokers. More recently, lives were lost because a Japanese company continued to distribute automobile airbags that it knew could explode with fatal discharges of shrapnel and by an automaker that sold cars knowing they had an ignition defect that had caused fatalities.

The bad-behavior list could go on, but it should not be taken as a blanket indictment of business. There are many companies that give the same attention to ethics as to profits. Some of these are very large corporations, but the more likely exemplars of good corporate behavior are enterprises that are closer to their customers, small businesses such as those the people of Ozaukee County deal with every day. Many of these businesses take corporate citizenship beyond a commitment to deal fairly with their customers to supporting their communities with contributions of funding and in-kind donations of services and products for good causes.

Repellent as they are, the offenses of Wells Fargo and its ilk nonetheless should not be dismissed as aberrations, and memories of them should be kept handy as reality checks for use the next time someone asserts that government should be run like a business. That assertion is so common that it has achieved cliché status. 

Just the other day in Wisconsin, where an effort to privatize parts of the state government as business operations has been ongoing (such as the scandal-and-ineptitude-plagued move that turned the Department of Commerce into the Wisconsin Economic Development Corporation), Gov. Scott Walker offered no state help for small school districts that can’t make ends meet under reduced state education funding and local tax levy limits. Instead he instructed them to adopt business methods, saying these districts just need to function like private businesses and find new ways to be efficient.  

Governments and school districts are not private businesses. There are long lists of economic and organizational reasons government can never function like a business. But the one that matters most is that the purpose of business—its mission and objective—is to make a profit for owners and investors.

Pursued with integrity, this is an honorable enterprise. But look where it can lead when integrity is absent: Those thousands of fired Wells Fargo workers who set up fake accounts were reported to be under intense pressure to meet lofty sales goals set by supervisors who were under intense pressure to generate profits.

The purpose of government is different—it is to serve the people.

The other offensive words PDF Print E-mail
Written by Ozaukee Press   
Wednesday, 12 October 2016 18:55

The words were an affront to the standards to which American citizens hold their elected leaders.

The words were uttered by the presidential candidate Donald J. Trump. No, they were not the lewd, obscene, repulsive words describing what he does to women on a video recording that became public last weekend amid national revulsion.

These Trump words—“that would make me smart” and “of course”—were innocuous compared to his vulgar bragging about sexually assaulting women, but they said as much about his fitness to be president as his crude boasts.

In the first presidential debate, Trump said it would be “smart” to avoid paying taxes. His “of course” in the second debate Sunday night in response to a question about avoiding federal taxes confirmed that he has gone for years without paying them.

Americans don’t think it’s smart to avoid taxes. They think it’s wrong. 

Annual surveys have consistently shown that Americans believe they have a responsibility to support their federal government by paying taxes. When asked in polls whether it is “every American’s civic duty to pay their fair share of taxes,” more than 90% have answered yes year after year.

Trump’s long suspected tax avoidance was revealed when parts of his 1995 federal tax return surfaced. The documents showed he claimed a loss of $916 million in a real estate venture, allowing him to avoid paying federal taxes for as long as 18 years.

Trump and his defenders claim the use of a tax code loophole that allows some real estate losses to offset personal taxes for years after the loss occurred was legal. It may have been legal, but this should not be mistaken for a case of an unlucky entrepreneur getting a break on taxes after a business disaster. For Trump, finding ways to avoid paying taxes has been an ongoing wealth-building strategy carried out by teams of accountants and lawyers.

When those polls about tax-paying ask Americans what bothers them most about taxes, more than two-thirds say it’s wealthy people and corporations that are not paying their fair share.

Even though the tax-avoidance cat is out of the bag, Trump still refuses to make his current tax returns public. It is reasonable to assume this is because they would provide more evidence of his shirking the civic duty of paying taxes.

The hypocrisy of a presidential candidate who does not pay federal taxes calling for billions of dollars in increased military spending and billions more to be spent on political campaign bullet points ranging from airports to border walls while at the same time reducing the national debt is breathtaking. 

Those burdens would be carried by Americans who are not “smart” enough to avoid paying taxes. That describes most Americans. The United States has one of the highest rates of tax compliance in the world, with 83% of the country’s total tax liability paid on time.

Many of those who pay taxes as a duty to their country are men and women who are working hard to stretch their incomes to support a decent life for their families. Stretching his income has not been a problem for the candidate who pays no federal taxes, except perhaps when, as the New York Times reported, banks took control of failing Trump casinos and as a condition for additional loans required him to live on a monthly allowance of $450,000 “for personal and household spending.”

One of the riddles of this presidential election is how a candidate who protects enormous wealth by avoiding taxes can retain the allegiance of the white men angry over their economic state who are said to be his core supporters. Does it bother them at all that the candidate whose one-month spending allowance was more than the the balances in most Americans’ 401(k) or pension accounts pays no federal taxes?

Vanessa Williamson, author of the book “Read My Lips: Why Americans Are Proud to Pay Taxes,” summarized the data about Americans’ views on the civic responsibility to pay taxes like this: “When the wealthy avoid paying taxes, it does not impress average people, it offends them.”

No help for the rough-road-weary PDF Print E-mail
Written by Ozaukee Press   
Wednesday, 05 October 2016 18:11

In the Town of Saukville, it’s principle over potholes. 

At its Oct. 20 meeting, the Saukville Town Board refused to endorse a Wisconsin Towns Association resolution urging state officials to increase funding to maintain rural roads.

This probably struck some Town of  Saukville residents as strange, considering that their town is one of the neediest in the state when comes to fixing roads. Town drivers know all too well that many miles of those roads have deteriorated to the point where they do not meet basic standards for safe, minimally comfortable travel.

Town Chairman Don Hamm and Supr. Mike Denizen (the only board members at the meeting) declined to sign on with the appeal for increased road funding because the resolution includes  a reference to “a responsible level of bonding,” in other words borrowing, as part of a road financing solution. 

That’s an oddly narrow justification for withholding support for an effort that calls for more generous state road aid for Wisconsin towns. On the other hand, it’s not surprising that borrowing for road work has a bad name in Wisconsin.

Gov. Scott Walker’s insistence that increasing the state’s highway debt load beyond what many consider a responsible level of bonding is the only acceptable way to catch up with deferred road maintenance and construction has stopped progress toward sustainable transportation funding as surely as a lane-closing crash brings a stretch of I-94 in Milwaukee to a standstill.

Increasing borrowing instead of finding ways to raise revenue for highway spending is so unpopular that there is a battle brewing over it within the governor’s own Republican party. A number of legislators have signalled that the logical funding alternative of increasing the gas tax would be a better alternative than further borrowing.

Walker should look eastward for enlightenment on this issue. The governor of New Jersey last week agreed to a 23-cent per gallon gas tax increase. That governor happens to be Chris Christie, who famously sings from the same all-taxes-are-evil songbook as Walker and had adamantly refused for years to consider a gas tax increase. He was forced to change his tune when New Jersey’s debt-laden transportation trust fund ran dry trying to keep up with deteriorating transportation infrastructure.

Here in Wisconsin, where the transportation fund is also severely stressed, a small gas tax increase, say a nickel or even less a gallon, would get transportation funding on the road to sustainability with an impact on residents that would be far from a hardship.

In justifying the refusal to back the Towns Association campaign for increased funding for rural roads, Hamm mentioned that Town of Saukville residents “don’t support the idea of borrowing to fix our roads.” He apparently was referring to a vote by a majority of residents at a town meeting against borrowing for road work. But that was about borrowing by the Town of Saukville, not the state. It’s a long stretch to say that means town residents don’t want more money from the state if one of its sources is borrowing.                    

    In fact, there is much for town residents to like in the association’s resolution, which supports the broad-based Wisconsin road funding campaign called “Just Fix It.” Taken in its entirety, the resolution is a well-reasoned appeal for a balanced approach to road funding that, rather than supporting irresponsible borrowing, criticizes it while advocating for increased gas tax and registration fees. 

“Wisconsin’s over-reliance on borrowing eats away at the state’s segregated funding sources—the state gas tax and vehicle registration fees—which increasingly pay debt service rather than fund transportation needs,” the resolution states with perfect accuracy.

The resolution also points out that state funding for local roads is now less per capita than it was in 1986.

The Saukville board’s rejection of the Towns Association resolution won’t have much effect on its chances of success, but a vote of support for an effort to achieve sustainable highway funding and get a fair share of it for rural roads would likely have been seen as a welcome gesture of concern for rough-road-weary town residents.

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