Losing the Leveraged Lifestyle

One needn't wonder why people with large obligations, like the taxes on six or seven figure bonuses, don't have money put away to pay those taxes, or for their private fund capital commitments. It's the myth of the leveraged lifestyle, the fantasy that we can borrow ourselves into wealth. People forget that when we apply too much leverage, sometimes the lever breaks.

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Categories: Corporate Culture | Finance | Ethics

4 comments - Posted by Paul Orfalea at 4:36 PM

Nation of Straw

A few weeks ago, LA Times columnist Joel Stein wrote about peanut allergies. He clearly stated in his article that peanut allergies are real, dangerous, and very serious for actual sufferers, but he believed over-protective parents were exaggerating the incidence of peanut allergies - claiming many more cases than doctors report. 

The Times' website was flooded with comments accusing Stein of criminal negligence for saying that peanut allergies do not exist, and demanding the Times fire him or be responsible for the deaths of children. 

My first thought was this: Aha! The problem with newspapers today is that the only people reading them are illiterate!  My second thought: No, I'm sure many people read the article correctly, saw there was nothing controversial or inaccurate about it, and went on their way. My third thought: The respondents were reflexively using the single most popular tool of debate these days: The Straw Man Argument.

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Categories: Corporate Culture | Management Skills | Leadership | Ethics

0 comments - Posted by Paul Orfalea at 8:59 AM

NEW BOOK!

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Categories: Corporate Culture | Creativity | Customer Service | Education | Nutrition | Management Skills | Disabilities | Entrepreneurialism | Finance | Economics | Ethics | Competitive Advantage | Optimism

2 comments - Posted by Paul Orfalea at 9:13 AM

When Good People Do Nothing

There's not much I can add to the enormous volume of well-deserved derision aimed at former Merrill Lynch CEO John Thain, who destroyed one of America's legendary companies while "earning" one of the highest salaries in the country.

And yet, I have to add one thing: his abuses did not occur in a vacuum. When Thain lobbied for - and won - early executive bonuses ahead of the company's takeover by Bank of America, or when Thain spent over $1 million to redecorate his office - all the while planning to cut thousands of jobs - many people knew what was going on. Subordinates, peers, regulators and even shareholders chose to look the other way.

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Categories: Corporate Culture | Leadership | Economics | Ethics

3 comments - Posted by Paul Orfalea at 9:23 AM

Ethical Elasticity

For experimental purposes, three men are locked in a basement with only half a loaf of bread and a pint of water. One man is given a copy of Adam Smith's The Wealth of Nations. Another man gets a copy of Karl Marx's Das Kapital. The third man receives a Glock 9mm semi-automatic pistol and fifteen rounds of Remington Golden Saber brass-jacketed hollow point ammunition. After two weeks, researchers enter the basement and learn everything there is to know about economics.

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Categories: Finance | Economics | Ethics

0 comments - Posted by Dean Zatkowsky at 12:42 PM