"You'll never get ahead if you don't take care of what you have." - Doris Waddell, RIP

A historic building on our U of M-Morris campus - morris mn

A historic building on our U of M-Morris campus - morris mn
The multi-ethnic building was the original home of the music department at UMM. (B.W. photo)

Tuesday, September 14, 2010

"What a tangled web we weave" indeed

Maybe we'll eventually see it: "Denny Hecker the Musical."
At some point you have to detach from the seriousness of that mess.
How many of us, in the back of our minds, see the endless headlines about the auto mogul's troubles and think about wheeler-dealers we've known. Certain people just have a talent for getting the best deal and cutting corners and stepping on toes in the process. They're unfazed. They can get by with it for years.
I suspect that many aren't even caught. As the soap opera involving Denny Hecker lingers on, I'm reminded of the "Gomer Pyle" TV episode in which Gomer (Jim Nabors) recites an old piece of folk wisdom, with conviction: "What a tangled web we weave, when we practice to deceive."
How true, and it's good to be mindful of the wisdom here, but how could lawyers make a living if it weren't for this human failing? Lawyers are an important part of our economy so we shouldn't dismiss the Hecker types as if they're totally undesirable. Lawyers absolutely salivate over a situation like Hecker's. They take to it like a bear to honey (like the bear we had in Morris, remember?).
A whole lot of people in the wake of the Hecker trainwreck get drawn in and need legal representation too. As long as any material assets are in question or at stake, lawyers will buzz around this mess like flies around cow dung.
I have offered up the observation at the Morris McDonald's restaurant with the morning crowd (of philosophers) that everyone will lose interest in Hecker when he no longer has any money. Until then, his adventures will make the front page of the Star Tribune.
It's a glaring indictment of our system that Hecker was allowed to get so big in the first place. He joins the ranks of the Enron crowd and other weasels from the go-go years of our "mirage" economy, when squealing anchors on CNBC would announce that the magical Dow had jumped upward another 200 points. Or 400. Whatever. They might as well have done a "high five" too.
I never bought it. My old boss at the Morris newspaper, Jim Morrison, will affirm that I stayed skeptical through it all. I know too much about economics history and I was impressed by some very firm and prescient words from conservative columnist George Will.
Will, in the midst of the sugar-high bull market period, reminded us of a cornerstone of economic thought. Profits, he said, are really not that easy to come by. He reminded us in a most fundamental, sober way that a profit is achieved "when you can charge more for something than what it cost you to make it."
It's doable but it doesn't routinely push profits to dizzying heights. It's laughable that Enron became a household word, even getting a baseball stadium named after it (for a while). These days CNBC is regularly re-running the movie made about the fall of Enron and the folly of Enron: "Enron, the Smartest Guys in the Room."
Ken Lay of Enron was a confidante of George W. Bush and was spoken of seriously as a candidate for Secretary of Energy. Today we look back at those guys as nothing more than clowns, a puzzling sideshow in the progression of history. Bush might put on the clown makeup too.
They say we shouldn't write off George's brother Jeb as presidential timber, because Jeb is "a lot smarter" than George W. Thanks a lot. Why couldn't we have gotten the smarter version in the first place?
A lot of the iconic figures of Wall Street's go-go years belong in a hall of infamy now. These people were setting an example for rank-and-file Americans who were pouring money into Wall Street with such things as 401K accounts. So let's restrain our laughter a little.
I remember when Forum Communications sent an HR person to encourage all of us knaves in the Forum's rank and file to sign up for a 401K. Yes, they were encouraging us, not just informing us, and toward that end the HR lady brought with her a VHS tape to play, with an entertainment sheen to it.
My goodness, the stock market "through history" has always gone up, so don't mind those little bumps in the road we come to now and then.
We were then given a form to fill out which we were supposed to return to her before she left. That gave us about ten minutes. All we had to do was check a box for what kind of investment fund we wanted to shape our retirement.
I needed more than ten minutes to write a typical newspaper article. There was a very unserious mood about it all.
"Don't worry about what box you check, you'll get rich!" is how I could have paraphrased what we were told.
I glanced at the Forum employee next to me and she checked the box for the fund with the highest historical rate of return. Naturally this was some dizzyingly high figure. How could you pass that up, what with the number right in front of your eyes? Most knaves even know that a higher rate of return equates with a greater amount of risk.
I wonder how that particular fund is doing all these years later, now that the market has cratered. The Dow reached 14,000 in the summer of 2007 but it hovers around 10,000 now. A lot of experts are predicting another serious downturn.
As I sat there as one of the Forum's knaves, pondering what box to check, I was reminded of something that Harvey Mackay once wrote. Mackay was once enlisted as a prospective investor in a new European football league. But he was put off when he attended a meeting where the approach just seemed too hard-sell.
Mackay was asked to declare in front of the group if he was interested. He instinctively rejected this psychological pressure, did a turnabout from his initial receptiveness and said "no," bluntly.
Mackay didn't like the approach.
I didn't like the approach when my then-employer approached us about 401Ks. The names of those funds were supposed to impress us so much. You can make up your own. How about "Adventure Fund?" Or "Enterpriser Fund?" Or "Sky's the Limit Fund."
And on and on. I have read that the typical 401K investment fund is actually mediocre. But how are us knaves supposed to know? We just check the box that excites us the most.
Just like we might have bought a car from Denny Hecker.
-Brian Williams - morris mn Minnesota - bwilly73@yahoo.com

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