Here there are lions

January 23, 2009

Hola One and All,

For the most part, we are done with our deployment. The out-processing is pretty much done. The ceremonies are over. Many of us are “burning up our leave time” as we begin the transition back to our civilian lives. The time off is welcomed, but there are still uncertainties.

The Adjutant General of NM has asked me to stay of for a few more months to do some duties around the State for the NM Guard. KOB TV has asked me to start doing business reports again. I can do both, and likely will, as I explore options in both the world of business and politics. I am heartened by the opportunities being presented. There is always more opportunity than time. I promise all my faithful readers I will keep you apprised of my future plans.

Meanwhile, this week’s missive delves deeper into identifying the winners in the world. Last week’s missive was well received and I hope this week’s will be as well.

Also, please feel free to send the missives on to anyone you wish. They are meant to be shared.

Signed, Your Hope-He-Remembers-What-Camera-To-Look-Into Soldier,

Greg

PS Two weeks ago, I wrote about Henry Ford. Some of my well-informed readers gave me some insights about Mr. Ford that were less than flattering…including the fact that he was openly anti-Semitic. While I admire some of Mr. Ford’s business practices, many of his personal opinions and views were clearly wanting.

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Last week we began a series that identifies the traits of winners in the world.   To demonstrate the universality of “winner traits”, we linked Middle Eastern countries, terrorist groups, GTMO detainees, and Wall Street insiders with respect to their behavior and showed why they do not fall into the “winner” category. 

The first thing we posited was that winners allow for the free, open, and honest flow of information, not attempt to control information.

The second trait that winners demonstrate is that they value education.  Now, most institutions, organizations, and nations say they value education, when in fact what they really value indoctrination.

In many Middle Eastern nations, things are taught only one way depending on the tribe, clan, or ranking Imam.  That is not education.

Questioning the “authority” on the subject (be it a book or a person) is not allowed.  Education for the masses often stops for men when they are teenagers; and education for women?  Forget it. 

When higher (or a Western) education is allowed, it is only for the elite and meant to give a permanent advantage to the haves over the have-nots. 

In an era where students in China are competing with students in India and the US for jobs, this trait dooms most Middle Eastern nations to failure.  Unfortunately, this mind-set has also percolated down to the lowest levels among many Middle Eastern people as well.  I saw it first hand at GTMO.

Detainees, too, valued indoctrination over education.  Detainees organized themselves loosely in their cell blocks. They appointed prayer leaders, military leader, spokesmen, communicators, etc.  What was evident was this…straying from the “party-line” was not allowed.  Often times detainees would ask to be moved to another cell block because they were being ostracized by other detainees because they did not adhere strictly to the others’ belief system. 

Predictably, some of the detainees are close to illiterate.  Others, however, are brilliant.  Their minds are incredibly quick and agile.   Under different circumstances, they could have competed with the best in the world.  But, they would only share their knowledge with certain detainees.  Plus, they were not receptive to learning from detainees who thought differently than they did.  In short, they didn’t value education.

What a pity.

Unfortunately, Wall Street tripped down the same path. 

First, Wall Street refused to educate its clients about its exotic new investment products.  That information was “proprietary.”  Wall Street mavens acted like Imams telling investors “only what was needed to know.”  Then, among the mavens, a “group think” mentality kicked in. Every hedge fund manager and derivatives-trader started executing the same strategy…be it the yen carry trade or interest rate swaps.

Independent thought went out the window and the risk to the entire system began to swell.

When inquiring minds honestly sought to be educated about the risks, or warned that the system was built on sand, they too were ostracized and marginalized…if not outright fired. 

Today, we are now hearing confessions from those who should have known better saying they never really understood how hedge funds or derivatives worked.  They also contend they never knew the risks or how the managers were being compensated. 

And, these were the supposed “smart guys!” 

But, no one wanted to look dumb.  And, in this environment, those with the knowledge weren’t about to educate those without about the complexities, compensation, or risk. 

Wall Street stopped valuing education, and unfair as it is, we all now float in a sea of their financial flotsam and jetsam.

The third trait of a winner is that winners value hard work.  This trait goes hand in hand with valuing education.  We all know individuals who value education.  They may have multiple advanced educational degrees.  They may be really smart.  But, if they won’t get off their duff and get a job or start a business, what good are they?  Education and hard work must go together to make a winner.

In many parts of the Middle East, hard work is not always valued.  Oil subsidies from the government have created a welfare mentality that diminishes the value of hard work.  Moreover, the bifurcation of rich and poor (and the poor’s inability to advance up the economic food chain) doesn’t lend itself to productive labor.

We saw this mentality inside the camps at GTMO as well.  Hard work was not seen as a way to add value and purpose to life.  Joining the jihad was.  But, it doesn’t take much effort to hide among women and children and shoot at people.  Nor is it productive. 

Productive work helps define us and those who believe they are building something better aren’t inclined to be suicide bombers.

Sadly, Wall Street stopped valuing productive, hard work. 

Instead of aiding American industry and business in building something new, Wall Street found the fees were higher and effort easier to break-up or merge companies.  Once that strategy had exhausted itself, Wall Street “geniuses” decided the easy path to wealth was trading paper…and trade they did.

Wealth was no longer achieved via allocating capital to productive industry.  Rather, wealth was achieved by “gaming the system” via leverage, swaps, derivatives, options, and a host of “black box” schemes. 

Instead of taking capital and building something solid, Wall Street attempted to create wealth by gambling with other people’s money.  Building is work.  Gambling is fun…especially if your money is not the money at risk.

This mentality affected an entire generation of MBA hot-shots who graduated from elite schools and thought million dollar bonuses were the norm.  Like the Middle East, our society was becoming bifurcated with the middle class and poor sensing the system was totally rigged against them. 

Thankfully, Americans on the whole still value hard work.  It’s not too late.  The boy-genius options trader who just got laid off from CitiGroup will have to learn that lesson the hard way.

The next thing that winners do is take responsibility for their actions.  They don’t play the blame game. 

Middle Eastern countries are famous for blaming their woes on others.  “We are poor because they are rich.”  “The West is tricking us out of our oil.”  Uh, OK, got it.

This mentality was pervasive among the detainees.  They were all innocent of their charges…just ask them.  It was always someone else’s fault that they were at GTMO.  Conversations like the one below were not uncommon.

Detainee:  “General, General, I swear this was all one big mistake.  I should not be here” 

Me:  “Then how is it we picked you up in Afghanistan and your vehicle was loaded was Rocket Propelled Grenades?”

Detainee:  “Oh General, that was because of my cousin Habib; he didn’t tell me what we were doing.  I went to Afghanistan to start a pizza business.”

Really folks, I can’t make this stuff up.

One time we showed a soccer game to the detainees and the camera panned the audience.  Some women in the audience had the skin on their arms showing.  The detainees went crazy and destroyed the TV.  They then said it was our fault that they didn’t have TV for several months. 

They rarely, if ever, took responsibility for their actions.  For many, their maturity level in this area seems to have been arrested about the age of a typical American teenager.

Wall Street is acting in this same manner.  Rather than take responsibility for their actions, Wall Street wants the taxpayers to take responsibility.  CEOs don’t resign in disgrace as their companies circle the drain.  They take multi-million dollar bonuses. 

Our politicians and regulatory officials are feeding this revolting behavior and holding no one to account. 

On the “Main Street” level, individual businesses that fail…fail.  As painful as that is, there is an honesty to it.  On the Wall Street level, the more colossal the failure the bigger the bailout…and lack of concomitant accountability and responsibility.  Ugh.

Next week, we will continue this series on winners and discuss women, tribes, and religion. 

Hmmmm, women…tribes…religion.  No controversy there. This is why no one invites me to parties anymore.