By Jim Israel

June 4, 2010

E-mail: jamesisrael77@yahoo.com

It’s Time to Go…Let’s study for a moment a film [now on DVD] that Mr. Gripes has no intention of ever viewing, but for whom one brief glance at a theatre trailer told him everything he needed to know:  that is, the movie stunk. The film is ‘Extraordinary Measures,’ starring that old, leathery stegosaurus Harrison Ford. The plot? My readers, undoubtedly observers of too many bad films themselves, have certainly seen a version of this a million times: A stylish, yuppie couple is confronted with a horrific scenario: their child, angelic in mien, comes down with a debilitating illness, and no one can furnish a diagnosis as the child’s condition worsens.

Remote, despotic doctors turn them away, telling the parents they can do nothing. The desperate parents have no place to turn to. Then, a miracle happens: they fortuitously meet our humble hero, himself long shunned by the medical establishment, who initiates a fight against a ferocious bureaucracy and heartless doctors; lo-and-behold, the child’s life is saved. It’s Hollywood tear-jerking garbage, and it’s been a theme that’s been recycled for eons. In this version, Mr. Ford is the savior, exclaiming at one point in a bellow of outrage, as he sits at his desk, “No one tells me how to run my lab!” Imagine: these words emerge from the mouth of the same person who years ago fought off a gazillion slithery snakes, rescued voluptuous damsels from the clutches of swarthy, scimitar-wielding criminals, and halted runaway vehicles while hanging on to the roof by his fingernails. Now, he’s behind a desk, running a laboratory. Whoopee.

Final worldwide box-office receipts: $11 million, which was probably a fraction of the amount of cash some poor sap-producer was compelled to folk over for Mr. Ford’s services. Stick a folk in him. Harrison, you’re done.

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Saving themselves from themselves – Let’s get something straight right off the bat: Mr. Gripes, despite his often oracular, know-it-all tone, doesn’t for one minute think he’s as smart or as shrewd as most of those top-dog chief executives we hear and read about so much. Hey, to get to be king-of-the-hill of any large institution certainly takes a lot of brains, patience, tenacity and superior social skills. But, Mr. Gripes is certain of this: almost to a man, these big shots are not only totally wrong, they’re borderline hysterical about one issue: regulation.

Lately, with great impetus from the right’s almost pathological screed about free enterprise, Big Business screams constantly that profits in their particular industry will be severely diminished and their ability to run their businesses crippled if powerful regulations are put in place.

Mr. Gripes takes an entirely different tack: he thinks an intelligent, properly managed, no-loophole regulatory climate is a boon to industry. In fact, strong oversight measures may indeed save these very institutions from destroying themselves in an orgy of greed not dissimilar to the debacle we’ve witnessed over the past few years. As history has shown repeatedly, boom times plant the seeds of institutional euphoria and amnesia, which lead to self-immolation. Regulation can act as a buffer.

Look at the awful British Petroleum oil-spill in the Gulf, for example: if the oil industry had invested just $500,000 [per rig] in a shut-down safety device, instead of going all-out to defeat a proposal that would have mandated the use of the mechanism on drilling platforms [I’m not surprised it was defeated – after all, since 2002, the oil industry has spent a mind-boggling $893 million on lobbying efforts.], this whole sordid, costly mess could possibly have been avoided. By rejecting a piece of safety equipment costing a picayune half-a-million dollars, BP will end up squandering tens of billions of its hard-earned assets.

To get this regulation defeated, the oil companies very likely lied about its efficacy as well; they persuaded Congress that the safety equipment did not work, even as European countries reported this particular gizmo in their oil fields has operated successfully and without problems for years. BP is a prime example of how a company’s insistence on short-term profits over prudent long-term management of its resources eventually causes great damage to the institution.

How about the big banks and Wall Street? Institutions such as Citicorp, in their pell-mell stampede for profits, simply lost their heads, and put their very institutions at risk with their over-leveraged loans, off-the-balance-sheet obfuscations, and a host of other barely legal stratagems. And, where did it get Citicorp in the end? When the dust cleared after the apocalypse of 2008, Citicorp had given back TEN years of profit, basically falling into insolvency. Mr. Gripes will say it again: Citicorp, and essentially every other large financial institution, in the absence of firm oversight and accountability, ran off the cliff, jeopardizing their very existence. If there had been tough regulations without exceptions in place, and competent individuals to implement them, Citicorp would still be today a sound, profitable and proud institution, instead of a shell of its former self. That’s irrefutable.

But, unfortunately, these corporations never learn. The allure of huge year-end bonuses propels senior management to game the system constantly – deception and concealment are the orders of the day still. That inevitably leads to big trouble. Just the other day, Mr. Gripes read in the Wall Street Journal that, even after all the losses and all the shame, Citicorp still creates fictitious quarterly statements; Mr. Gripes is no expert on this, but the legerdemain involved offloading some assets to create a false picture of reduced liabilities and less leverage. At its essence, it’s really a blatant manipulation of the stock price, and that’s patently dishonest. Yet they’re still doing this. Companies just cannot help themselves.

My point: Regulations, done correctly, save avaricious corporations, in their insatiable and all-consuming drive for profit now, from an ultimate demise. Never underestimate, readers, the ability of businesses to run blindly over cliffs in their maniacal push for returns. Staggering, runaway profits always bring on rampant institution-wide denial. Regulations and rules would prevent these companies from injuring themselves, or even committing suicide.