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Friday, 04 December, 2020

Corporate America

Date: 15 July, 2002

By: Chief

Imageusiness gone awry.

We have all read about it over the past couple of years. The Dot coms, now the Dot bombs. The manufactured energy crisis in California. The Enron Implosion. The suicide of Global Crossing. Martha (a nominee for felony insider trading for the year 2002. I wonder how she would look in prison stripes?) Stewart. Arthur (the Homer Simpson of the accounting world) Anderson. The K- (out goes the blue light) Mart bankruptcy. The AOL-Time-Warner fiasco. Xerox Corporation. Microsoft Corporation. And introducing the newest member of the Titanic club — World Com. All these companies have one thing, well several things, in common. The most important one, however, is that they are all publicly traded companies. Indeed World Com's stock price has gone from 60 dollars per share to 6 cents per share since the minor revelation of accounting errors, to the tune of 4 billion dollars. Power corrupts. . ..

Among other common maladies these companies share, no pun intended, is the idea of shareholders first, last and always. The consumer does not matter. Building a good, reliable product - a foreign concept to be sure. Ethics? Leave 'em at the door. Just make the shareholder happy. Nothing else matters. Buffoons.

So how do you keep shareholders happy? Why a nice juicy return on investment of course. If a publicly traded company can keep its stock price in the stratosphere and keep showing growth, whether real or manipulated, said company will have no problem selling shares of its stock to gamblers, er, investors. As such, corporate funding keeps rolling in. Liars.

But how does a company manipulate its accounting process. After all 1 + 1 = 2. Not according to Wall Street, the Security and Exchange Commission (SEC) and, naturally, the Congress. 1 + 1 can equal whatever will help the company. The caveat here is that the company must not get caught cooking the books. If they do, Wall Street, the SEC and all politicians will disavow any knowledge of the company's actions and subsequently call for the company's castration. In other words, it is ok to lie and cheat, as long as you don't get caught. The corporate way, don't you know. Don't build a better mouse trap. Just lie and hope you are not caught. Scalliwags.

Accounting is quite straight forward. It is called a profit and loss (P & L) statement. Here is how it works:

Or Revenues - expenses = profit or loss.

Not exactly rocket science is it? There is no complex formula. No complexity whatsoever. If a company buys something, anything, from pencils to skyscrapers, that is an expense. Period. Whatever a company takes in through sales or services is revenue. Period. A well run company will have more revenue than expenses. Members of the Titanic club have more expenses than revenue. It is as simple as that.

As an example, when you or I deposit a check into a bank, that is a credit. Should we write a check against our account, that is a debit. Not so in the murky world of accounting. Indeed, it is the exact opposite. A deposit is a debit and a withdrawal is a credit. You tell me why. No accountant can. Thieves.

The phrase 'cooking the books' is a politically correct phrase for the word fraud and all it implies. For that is exactly what these companies, Wall Street, the SEC and Congress have been committing. Fraud.

As for investors and shareholders, aka gamblers, I do not feel sorry for them one bit. Investing money, as any reasonable person would agree, is gambling. The investor/gambler takes a risk. It may pay off for the gambler or the gambler may lose his or her shirt. It is your money to do with as you please. Just don't come crying to me after you have lost everything you once owned. You brought it on yourself. Further, at least as far as I'm concerned, a gambler or investor, the names mean the same thing, has no standing to sue a company that loses the gambler's money. After all, the gambler took the gamble. As such, the gambler has no one to blame but him or herself. It is the nature of the beast.

Now enter our federal government to the rescue. King George the Bush is calling for corporate responsibility. Calling for additional legislation, additional regulation. Punishment of executives, and on and on. Imagine that. Government, the absolute biggest spenders of the peoples' money, the biggest wasters of the peoples' money, is calling for corporate responsibility. This is very much akin to asking a fox to guard your chicken coop. What a contemptible joke. Morons.

We don't need government intervention. When has government ever fixed anything to begin with? The best thing one could do is to sell all their stocks. Burn the corporations to the ground by not buying their stocks. Shake up Wall Street in a way they shall never forget. Don't invest your hard earned money in some pie-in-the-sky stock deal. Deny what companies seek, your money. When the smoke clears and the dust settles those companies that are honest and forthright will survive. Those that live by fraud will not. Survival of the fittest. There won't be many companies left standing when it is all over.

So what if Wall Street is destroyed. Stock certificates, quite literally, are not worth the paper they are printed on. The entire concept of purchasing a piece of the company is a fraud. A stockholder has no say pertaining to business operations. The stockholder is at the mercy of the company, the SEC, Wall Street, the broker, other stockholders and other potential gamblers. The world of the stock market is nothing more than a rather large house built solely out of cards. One puff of wind and it crumbles to the ground. Let us then send a hurricane towards Wall Street.

Am I anti-business? No. Not at all. I invest by conducting business with and promoting the mom and pop stores. The local business and businessman. The successful mom and pop or family businesses thrive on providing a great product or service at a reasonable price. More importantly, the small business provides what a corporation refuses to provide in any way and that is superb customer service. In my area, the perfect example of this is Suburban Propane Company, a publicly traded company on the New York Stock Exchange (ticker symbol: sph) who is a nation wide provider of propane, at inflammatory prices and outright awful customer service versus a little family run propane company, Mountain Flame Propane. Mountain Flame provides propane at a reasonable cost while making a profit. Moreover Mountain Flame provides tremendous customer service. You need something, they are there. Not so at all with Suburban Propane. If you do not like their prices or service, too bad. What is worse is the fact that Suburban will and has committed fraud against customers who left their company and joined Mountain Flame. I can prove, in black and white, Suburban Propane committed fraud. And I shall in civil, small claims and criminal court. Like I wrote, I fully support local business.

In essence, support your local business, they will treat you right. If they don't, they won't survive. Boycott corporations, they don't care about their customers — just their shareholders.

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