Death of Trust...Sex, Money and Abuse of Power (Part Two)

Last week we discussed some of the negative effects of a loss of trust, but the big question remains...what do we do?

There are a number of options:
1. Structural reforms - policies, procedures, etc.
Certainly, these are useful tools to prosecute the bad actors, but shouldn't we (and our leaders) hope to strive for a higher standard than simply the minimum required to avoid rebuke?

2. Oversight (internal and external)
*Peter Eigen believes that the best way to root out corruption is to make it known. Ted.com = Peter Eigen "How to expose the corrupt"
Again, internal and external oversight are great tools to root out the bad actors and even may carry significant incentive/disincentive value.

However, I'm not sure we can create enough external controls or even enough 3rd party incentives to materially change average behavior.

I have heard it said that "we get the government we deserve." I think there is a lot to be said for that because politicians and leaders are a part of the community that elects them, so they should represent many of the traits found in the electorate. Therefore, if we want our leaders to have integrity then integrity has to become something valuable to the electorate and each person has to work toward increasing their own standards of behavior. And this leads to #3.

3. Personal Integrity
http://www.ehow.com/how_4746291_restore-integrity-personal-work-life.html -

Integrity starts from within. If we are to have integrity in every day life, we must first master it within our minds. Each and every day, we wake up and begin the day long process of running thoughts, conversations and questions in our minds. In total, it's been estimated that we have 65,000 thoughts every day. Have you ever given thought to your thoughts? What do you think about in a given day and are most of your thoughts of a positive nature? Are they meaningful and productive? How much of your thoughts are negative? What thoughts do you act on?

Negative thoughts are often expressed as complaints. People who complain also tend to make their grumblings known to other people who have no part in a positive and productive solution. People complain about their parents to their siblings, about their bosses to their co-workers, about their husbands, wives or significant others to their friends. They even complain about strangers to other strangers. Complaints are common, often in the absence of a solution to the issue or problem that sparked the complaint. But, if negative thoughts and complaints continue with no mediation or solution, they can manifest into self-destructive or aggressive behavior. Addiction, divorce, aggression, job loss, depression, misery; these are consequences of not having the maturity, responsibility and integrity to manage negative thoughts and difficult situations properly and act on a productive solution. I've read that if you aren't living with integrity, then your priorities, goals and values become sacrificed and you begin to attract people that make you feel bad

Interestingly, people with integrity don't complain much. People with integrity have the maturity to address their issues with the right people. They take responsibility to seek and take action toward solutions to their problems. They do what they say they will do. They have the willingness to create a plan (work and/or personal) and follow it through.

People with integrity are successful because they take control over their negative thoughts and replace them with productive, positive thoughts that manifest into great and powerful actions. If you identify yourself as a complainer, but want to change, you can. It is possible to restore your integrity

Maybe the ehow.com version is the way to do it, maybe another. Either way it is essential that we try.

I know it may sound hokey, but skepticism that runs rampant because of a loss of personal honor can rob societies of their very future. Therefore, it is in each citizen's best interest (and should be our responsibility) to make sure that we are doing what is right and true, so that standard of action may become expected of everyone again.

Thanks for your time and I hope this hasn't been too preachy, but I also hope it resonates, at least a little.

Best of luck on your journey, be good.

California Secretary of State Processing Times

California Secretary of State business entity filing times have soared since the first of the year, as a result of the state budget crisis and resulting budget and staff cuts at the Secretary of State's office (which included the closing of some regional offices).

Alas, the Secretary of State also failed to notify practitioners or the general public about these changes before the fact, resulting in unexpected delays to the tune of 6-8 week turnaround for business entity (LLC, corporation, etc.) filings by mail and standard over-the-counter expedited filing times increasing to three weeks and sometimes more from an average of less than two.

Belatedly, the SOS issued this apologetic announcement earlier this month:

http://www.sos.ca.gov/business/pdf/processing-times.pdf [subsequently updated in 2011 to provide an update on the progress the SOS is making to work through these issues]

Death of Trust...Sex, Money and Abuse of Power (Part One)

Watergate, Monica Lewinsky, ABSCAM, Jack Abramoff, Iran Contra, Keating Five, Rod Blagojevich, Elliot Spitzer...Don Siegelman, Richard Scrushy, Bill Blount and Larry Langford.

Is there any question why many citizens have lost faith in the American political leadership? And that is only a glimpse of U.S. politics, unfortunately private industry and international leadership are even more scandalous.

So, why should we really care? Isn't this just good news foder for TMZ? Not if you ask anyone currently looking for a job or that is a victim of crime or simply anyone that tries to do things the right way for that matter. Furthermore, we should care because these are our leaders and they are supposed to exemplify the best we have to offer, not act like a common street thugs just looking for a score.

Empirically speaking, the results of this behavior leads to all manner of negative public effects, including but not limited to: higher transaction costs, undercut free market competition, hampered overall systemic efficiency, inefficient allocation of resources and a general sapping confidence in the political system which leads to higher risks and thus increases required potential returns for an enterprise to be viable.

Ok, so maybe it hampers the economy a bit...still so what? It's more than a bit, according to the University of Connecticut the economic impact of political corruption is significantly greater than that of the tax environment. So, we can cut taxes, provide incentives, etc., but it still won't overcome the negative impacts if our elected officials aren't following the rules.

And that is just the economic risk...Michael Spencer speaking at TED 2010 warned of the social and medical dangers caused by a lack of confidence in our leadership. (See: "The danger of science denial" Feb 2010)

If you are beginning to be convinced that ethics are important you may be asking how we begin to solve this issue and increase the likelihood that our public officials will act honorably.

If so, check back next week for Part 2.

Things that I think are worth reading and knowing.

Occasionally I run across things that I like or think are useful and they may or may not be related to a particular topic, but I like to share so here are a few.

1. The details behind why investors consider being an angel investor...and what entrepreneurs should know if they are going to try and become one too.
Important Things for
Entrepreneurs to Know
about Angel Investors

2. The Angel Capital Association has a research section (including the item above) with a ton of good information.

3. I think handling mail is a hassle so...Earth Class Mail , although some of the reviews give me a rather large pause, but maybe Zumbox.com is the answer. In any case, these are cool ideas and I would love one to work out.

4. Along the same lines as above, I also think paying bills is a hassle so...PayTrust (made by Intuit but 1/5 the cost of Quicken bill pay).

5. Also, while working on this post, I ran across a big list of "Top Web Apps" that has some of my favorites and I intend to try some of the others too.

Be good.

One step forward and two steps back, Senator Dodd's Reform Bill does not attract

With all due respect to Paula Abdul and Cool Cat, I am not a fan of progress by way of "one step forward and two steps back."

The last couple of years we have seen unprecedented amounts spent to try and stabilize, then invigorate the national economy. TARP added $700 billion into our financial system and the Recovery Act added another $787 billion into tax benefits; contracts, grants and loans; and entitlements.

These measures may have had varying or arguable results, but they were extraordinary measures by any standard and we have started to see signs of a recovery.

It would seem that right now would be the time to nurture our fledgling recovery and make every attempt to ensure that it takes hold. In fact, I have written about and applauded some states' attempts to continue to foster new businesses by creating angel investment tax credit bills and we all probably hear many other programs to create jobs, etc. all the time.

Unfortunately, like a weed in the garden comes Senators Dodd's bill making it even harder to start a new company and specifically taking aim at the ones best positioned to grow into big companies. Provisions such as:

1. one that would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing.
2. a second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $200,000), and
3. the third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.

And despite an outcry heard all over the nation, from both liberals and conservatives, there has as of yet been no movement on the language or provisions and only a minor acknowledgment of the criticism.

This is a big deal...and Senator Dodd needs to hear about it until it gets fixed.