Business
Shawn Amos: WATCH: 60 Seconds of Social Media
Companies that hope to remain competitive know they need to maintain a presence on social media sites. But how can they integrate customer service into the operation? We’ll take a look in this week’s “60 Seconds of Social Media.”
As companies created profiles on sites like Facebook and Twitter, customers found they could put their gripes on blast for the whole world to see, forcing an entirely new dynamic in business communication, one that many companies are still struggling to master.
In a recent study from American Express, 17% of respondents said they used social media for customer service in the last year, and 80% of them said they didn’t complete a purchase because the service was unsatisfactory. Another study from Conversocial showed some brands are taking as long as 50 hours to respond to questions asked online. That’s business they’re just giving away.
Finally, in our Social Media Shorthand segment, we’ll take a look at content curation.
Missed last week’s episode about online ads? Check it out here.
From:The Blog
Miles Mogulescu: Wall Street to Obama: Thanks for Saving Our Jobs and Bonuses, Now F*** Off
Now that President Obama’s views on gay marriage have “evolved,” it’s time for his views on Wall Street to likewise “evolve” and for Obama to forcefully campaign to break the stranglehold of Too Big To Fail banks on the economy.
For its part, Wall Street’s view of Obama has certainly “evolved” since 2008 when Wall Street bankers seemed to have fallen in love with Obama.
As New York Times reporter Nicholas Confessore recently wrote:
“By the beginning of the year, it had… become obvious to many on Wall Street that Obama’s campaign was going to take a populist turn. Some bankers believed that the administration’s strategy was to talk tough in public and play damage control in private, and they were sick of playing along… One former supporter, [hedge fund manager] Dan Loeb, compared Obama to Nero… Stephen A. Schwarzman, a founder of [private equity firm] Blackstone, said that an Obama proposal to raise taxes on “carried interest” [which taxes hedge fund and private equity managers like Schwarzman and Mitt Romney at 15% instead of 35%]… reminded him of ‘when Hitler invaded Poland in 1939.’
‘I think it’s an unfixable relationship,’ one Democrat involved in planning the March 1 [New York Obama] fundraisers told me this spring. ‘They hate him. They really, really do.’”
Having contributed more money to candidate Obama in 2008 than to John McCain or Hillary Clinton — and having been rewarded by a President Obama who largely protected their interests — Wall Street banks and hedge funds now seem determined to throw Obama under the bus and contribute the overwhelming majority of their massive campaign funds to one of their own, former Bain Capital Chairman Mitt Romney and Republican super PACS run by the likes of Karl Rove.
It’s not enough for Wall Street that President Obama appointed a pro-Wall Street economic team led by Tim Geithner and Larry Summers. It’s not enough that Geithner successfully lobbied Sen. Chris Dodd to remove a provision from the 2009 stimulus bill banning bonuses to bank executives whose financial institutions were bailed out by the Federal government. It’s not enough that the Obama administration insured that the Dodd Frank financial reform bill was relatively weak — the Obama administration lobbied Democrats in Congress to vote down amendments that would have limited the size of Too Big to Fail banks or that would have reinstituted the Glass-Steagall Act, which for half a century separated federally insured commercial banks from investment banks that could gamble trillions of dollars in the global financial casino. It’s not enough that in 2010 Obama allowed all of the Bush-era tax cuts — including those for the richest Americans — to be extended. It’s not enough that the Obama administration allowed bank lobbyist to delay the implementation, and water down the regulations, in the already weak Dodd Frank bill. It’s not enough that in the past 3 years under Obama’s presidency, the Dow is up over 60% and corporate profits have soared, increasing the wealth of the top 1% while the income of the rest of America stagnates.
No. Wall Street has already gotten what it wanted from Obama — a president who, in the wake of the financial meltdown of 2008, would deflect the pitchforks of angry Americans. Now Wall Street is treating Obama like a cheap hooker. They paid their money, got their services, and they’re ready to send him back out on the streets.
In its infinite greed, the moderate, centrist Barack Obama who saved their butts is no longer enough for most of Wall Street. It believes it can use its wealth — further unleashed by the Citizens United decision allowing unlimited contributions to super PACS — to install one of its own, private equity multi-millionaire Mitt Romney, in the White House, someone who promises to repeal even the modest regulations of Dodd Frank and to insure that millionaires and billionaires won’t pay a single dime more in taxes from their untold fortunes.
So Obama has a choice. He can continue to talk like a bit of a populist in public and send emissaries to Wall Street in private to assure the bankers and hedge fund managers that they have nothing to fear from him, in the hope that Wall Street will continue to send campaign cash his way as insurance in case he gets reelected.
Or Obama can take a cue from FDR’s landslide 1936 reelection campaign, in which FDR proclaimed,
“We know now that Government by organized money is just as dangerous as Government by organized mob.
Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.”
He can then propose a program to make the big banks Small Enough to Fail, without their failure so threatening the economy that the taxpayers will again have no choice but to bail them out when the next financial bubble bursts. This includes:
• Call all his top regulators — the Treasury Secretary, the Fed Chairman, the Comptroller of the Currency, the head of the SEC, the head of the Securities Futures Trading Commission, the head of the FDIC — into the Oval Office and make it clear that he expects regulators to promptly promulgate regulations that strongly enforce the letter and spirit of the Dodd-Frank act, including the strongest possible version of the Volker Rule closing loopholes that might allow federally insured banks to engage in anything that looks or smells like proprietary trading.
• Call for the passage of a new Glass-Steagall Act which will cleanly separate federally insured commercial banks from risky investment banks. As JPMorgan Chase’s massive trading losses on recent hedges (which may not have violated the Volker Rule) shows, Wall Street banks will inevitably find loopholes in something as complex as the Volker Rule, whose proposed regulations run thousands of pages. KISS = Keep It Simple Stupid. If you want to gamble in the global financial casino, you can’t take federally insured deposits, and vice versa.
• Break up Too Big To Fail banks. Call for the passage of the Brown-Kaufman Amendment (which the Obama administration previously opposed) that would limit the size of any single bank to 10% of the total insured deposits in the banking system.
• Call for real principal relief for underwater homeowners and use all of the tools already at the disposal of the executive branch to bring this about.
• Unleash the Justice Department and SEC to civilly and criminally prosecute bankers who gamed the system and caused the 2008 financial crash.
• Place a 0.1% tax on all financial transactions. This would, as former Clinton Labor Secretary Robert Reich points, out, bring in more than $ 250 billion over 10 years while slowing speculators and reducing the wild gyrations of financial markets.
There’s nothing really radical about this kind of program. It’s in the clear tradition of the New Deal which saved capitalism from its own worst excesses. The Dallas Fed, one of the most conservative branches of the Fed, recently called for breaking up the biggest banks in order to make capitalism safer, a call which was joined this week by the President of the St. Louis Fed.
Wall Street would of course freak out and pour even more millions into Romney’s campaign and super PACS. But with Wall Street already hating him, Obama can’t win the money war with Wall Street, anyway.
What he can win is the popular war for the hearts and minds of the American people. Americans hate Wall Street and they hate the bankers who were bailed out by taxpayers and put the money in their pockets in continue multi-million dollar bonuses. Obama can make clear in his campaign that he stands with the American people and not with Wall Street who is funding Mitt “Mr 1%” Romney’s campaign to put one of their own in the White House.
Either Obama can continue to privately suck up to Wall Street behind the scenes in the hope of competing for their campaign cash, acting like a battered housewife who keeps doing her husband’s bidding in the futile hope that he’ll stop beating her. Or he can become the actual populist reformer that Wall Street fears him secretly to be. He can channel his inner FDR and welcome the hatred of organized money in the name of standing up for the American people.
From:The Blog
Jim Thomas: Who Owns Your Business-Related Social Media?
There is a time bomb in your company that you had better defuse. This is true whether you are employee or employer, because when it blows, both sides will be out lots of time and money, including plenty in attorney’s fees. Not that we attorneys don’t want your money; it’s just that some of us would rather get a little to prevent a problem, instead of a lot to clean it up.
The bomb is your failure to be clear about, or even consider, ownership of the business connections represented by social media platforms such as Facebook, Twitter and LinkedIn. A couple of ongoing lawsuits, which I discuss in my presentations on the legal issues in social media, are examples of the trouble that you can avoid with a little attention.
In both cases, former employees (one was even the former owner) thought the social media networks (one on Twitter, the other on LinkedIn) built while at their old jobs belonged to them personally. The former employers thought differently. It wasn’t the tweets, posts, pictures, etc. that mattered; rather the issue was ownership of the network, the extensive base of active business connections — fans, followers, friends, whatever — represented by the accounts.
Since the employees had a hard time understanding how their “personal” accounts could be company property, litigation ensued. Now legal fees are piling up, and valuable time that could be spent on the real work of running a business is instead being spent applying old legal principles to the new and constantly evolving world of social media. Neither case has yet reached any definite conclusions, and even if they do, they will be limited by their facts and the laws in their states.
What is clear is that, under some circumstances, a Twitter or LinkedIn account that might appear to be personal may actually belong to the employer. That means a “personal” Facebook profile or Pinterest board, you name it, could likewise be company property. I’m not saying that result is right or wrong. I am saying that having the employee and employer agree upon ownership beforehand is infinitely better than going to court to determine it later.
Truly personal social media isn’t the concern, though companies should have policies on when such personal activities can take place while at work or using company property. Many business people (me included), however, promote their companies through their “personal” social media. Some companies, likewise, instruct their employees in coordinating “personal” social media for business purposes. In the same vein, subordinate employees often maintain the “personal” accounts of some high-profile employees.
If any of those situations sounds even vaguely familiar, or if you just want to be certain, it’s time to invest some thought and energy (and a little bit of legal fees) in the development of a policy that distinguishes the rights of the employee from those of the employer.
That process should solve at least part of the issue. Even when ownership of the account is clear, the actual use of the account could still create problems. In a future post I will tackle another potentially explosive issue: non-compete and non-solicitation agreements in a highly connected digital world.
From:The Blog
Taylor Lincoln: Don’t Get Fooled Again
Revisiting the lessons from deregulating derivatives is particularly important right now because Congress seems to have forgotten them. A report we just issued provides a road map of how derivatives wrecked the economy in 2008 and could do so again if Wall Street gets its way.
Nine bills that would roll back the derivatives reforms created in the wake of the financial crisis are moving in Congress. These proposals, most of which have already passed in committee, have been put forth in the name of furthering the competitiveness of U.S. companies and creating jobs for Main Street. These are quite brazen claims, since deregulating derivatives arguably did more to harm economic competitiveness and job creation than anything Congress has done for a very long time.
Here is the history, in brief: At the end of the Clinton administration, financial derivatives were relatively new and sat in a regulatory netherworld. In practice, they were not regulated. But they bore all the hallmarks of traditional futures, which by law must be traded on regulated exchanges.
Federal Reserve Chairman Alan Greenspan and successive Treasury Secretaries Robert Rubin and Lawrence Summers (a trio Time magazine dubbed The Committee to Save the World) argued that financial derivatives investors were too “sophisticated” to require oversight. Regulating derivatives would “cause the worst financial crisis since World War II,” Summers claimed.
In 2000, with the passage of the Commodity Futures Modernization Act, Congress established a regulation-free haven for financial derivatives. Derivatives soon became a petri dish for the growth of financial risk-taking, especially relating to the housing market.
In rough terms, derivatives dealers sold hundreds of billions of dollars worth of quasi-insurance policies (called credit default swaps) on mortgage-backed securities to holders of the securities. The illusion of protection provided by these insurance policies helped create a voracious appetite on Wall Street for mortgages to bundle into securities. This, in turn, led mortgage originators to adopt laughably low underwriting standards, causing housing prices to soar to unsustainable levels.
When reality intervened and mortgages defaults began occurring in droves, holders of defaulted mortgage-backed securities submitted claims to the providers of their credit default swap “insurance policies” (primarily American International Group, or AIG), only to learn that AIG could not make good on its promises. The absence of supervision of derivatives had permitted AIG to amass risks well in excess of its resources — and thereby put the entire economy in grave jeopardy.
AIG’s inability to pay its counterparties threatened to cause a ripple effect of institutional failures that could have thrown the economy back into the Stone Age. A $ 700 billion taxpayer-funded bailout was ordered up to prevent a total collapse of the financial system. Regular Americans were left to suffer through the deepest recession since the Great Depression.
Experts agree with the essence of the summary above. Each of the members of The Committee to Save the World, for instance, has recanted his advocacy for a laissez-faire approach to derivatives. Rubin now says he even favored regulation when critical decisions were being made in the late 1990s, but that “very strongly held views in the financial services industry in opposition to regulation were insurmountable.”
Which brings us to the present: The Dodd-Frank Wall Street Reform and Consumer Protection Act instituted a series of commonsense reforms, including requirements for derivatives trades to occur on designated exchanges. This key provision would ensure that prices are transparent and that a centralized clearing agency guarantees the credit worthiness of trading participants. This is how stocks and futures have been traded since the reforms of the 1930s. But because more money can be made trading on opaque, unsupervised markets, Wall Street objects to this reform. Once again, its leaders are attempting to subject Washington, and the country, to an insurmountable force.
Of the bills seeking to punch holes in Dodd-Frank, a few are comically ridiculous — and dangerous. One, H.R. 3283, cedes regulatory authority to foreign governments for the overseas activities of U.S. firms. Ask yourself, when was the last time Congress advocated submitting to foreign control of anything? Only Wall Street’s influence could convince lawmakers to favor such a thing.
Another bill is the cleverly titled Swaps Bailout Prevention Act. It does the opposite of what its title suggests. It would repeal Dodd-Frank’s prohibition against bailing out of major derivatives participants and, thus, allow federally insured banks to remain major derivatives players.
Last week brought news that JPMorganChase, the nation’s largest bank, suffered losses of at least $ 2 billion — which may climb above $ 4 billion — on bets on credit default swaps, the same scourge that led to the 2008 crisis. More alarming, the bank’s losses came on positions that may have been as high as$ 100 billion, meaning that a slight change in conditions had potentially enormous implications. This is exactly why derivatives, which financier Warren Buffett presciently labeled financial weapons of mass destruction in 2003, require vigilant public oversight.
The JPMorgan episode may be the warning that Congress needs to return to its role of protecting the public rather than coddling the banks. But it also raises a question: How many times does a lesson have to be taught before it is learned?
Taylor Lincoln is research director for Public Citizen’s Congress Watch division. @Public_Citizen.
From:The Blog
Robert Reich: The Commencement Address That Won’t Be Given
Members of the Class of 2012,
As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.
You’re f*cked.
Well, not exactly. But you won’t have it easy.
First, you’re going to have a hell of a hard time finding a job. The job market you’re heading into is still bad. Fewer than half of the graduates from last year’s class have as yet found full-time jobs. Most are still looking.
That’s been the pattern over the last three graduating classes: It’s been taking them more than a year to land the first job. And those who still haven’t found a job will be competing with you, making your job search even harder.
Contrast this with the class of 2008, whose members were lucky enough to get out of here and into the job market before the Great Recession really hit. Almost three-quarters of them found jobs within the year.
You’re still better off than your friends who didn’t graduate. Overall, the unemployment rate among young people (21 to 24 years old) with four-year college degrees is now 6.4 percent. With just a high school degree, the rate is double that.
But even when you get a job, it’s likely to pay peanuts.
Last year’s young college graduates lucky enough to land jobs had an average hourly wage of only $ 16.81, according to a new study by the Economic Policy Institute. That’s about $ 35,000 a year — lower than the yearly earnings of young college graduates in 2007, before the Great Recession. The typical wage of young college graduates dropped 4.6 percent between 2007 and 2011, adjusted for inflation.
Presumably this means that when we come out of the gravitational pull of the recession your wages will improve. But there’s a longer-term trend that should concern you.
The decline in the earnings of college grads really began more than a decade ago. Young college grads with jobs are earnings 5.4 percent less than they did in the year 2000, adjusted for inflation.
Don’t get me wrong. A four-year college degree is still valuable. Over your lifetimes, you’ll earn about 70 percent more than people who don’t have the pieces of parchment you’re picking up today.
But this parchment isn’t as valuable as it once was. So much of what was once considered “knowledge work” — the kind that college graduates specialize in — can now be done more cheaply by software. Or by workers with college degrees in India or East Asia, linked up by Internet.
For many of you, your immediate problem is that pile of debt on your shoulders. In a few moments, when you march out of here, those of you who have taken out college loans will owe more than $ 25,000 on average. Last year, ten percent of college grads with loans owed more than $ 54,000. Your parents have also taken out loans to help you. Loans to parents for the college educations of their children have soared 75 percent since the academic year 2005-2006.
Outstanding student debt now totals over $ 1 trillion. That’s more than the nation’s total credit-card debt.
The extraordinary rise in student debt is due to two related facts: the cost of a college education continues to increase faster than inflation, and state and local spending per college student continues to drop — this year reaching a 25-year low.
But this can’t go on. If unemployment stays high for many years, if the wages of young college grads continue to fall, if the costs of college continue to rise and state and local spending per college student continues to drop, and if the college debt burden therefore continues to explode — well, you do the math.
At some point in the not-too-distant future these lines cross. College is no longer a good investment.
That’s a problem for you and for those who will follow you into these hallowed halls, but it’s also a problem for America as a whole.
You see, a college education isn’t just a private investment. It’s also a public good. This nation can’t be competitive globally, nor can we have a vibrant and responsible democracy, without a large number of well-educated people.
So it’s not just you who are burdened by these trends. If they continue, we’re all f*cked.
Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at RobertReich.org.
From:The Blog