Monthly Archives: October 2020

Disloyal by Michael Cohen

Disloyal: The True Story of the Former Personal Attorney to President Donald J. TrumpDisloyal: The True Story of the Former Personal Attorney to President Donald J. Trump by Michael Cohen
My rating: 5 of 5 stars

Cohen writes surprisingly well, even entertainingly, but the five stars I give this book are for the importance of the content, not its style. The book delineates in excruciating detail what a dangerous and truly evil person Donald Trump is. I have no idea what his supporters see in him, how they can live with themselves. Cohen admitted to being fixated on him in a cult-like manner and being willing to do anything for him, no matter how illegal and unethical it was. Cohen is or at least was a slimeball himself, of course, but in my 26 years in the FBI I know all too well that it is the insiders of criminal organizations that have the most accurate information about the crimes and other criminals. Of all the books about Trump by people around him, this is the one to read. Just read the first page and you will realize that Trump was trying to get Hillary killed with his 2016 remark about “2nd Amendment people” “taking care” of her. But if you’re a Trump supporter, you will choose not to believe any of it and if you are sane, you already believe what Cohen has to say, so there is probably no point in further comment.

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Sea People by Christina Thompson

Sea People: The Puzzle of PolynesiaSea People: The Puzzle of Polynesia by Christina Thompson
My rating: 5 of 5 stars

This non-fiction history of Pacific Islanders and how we learned what we know about them is written with surprising elegance. It is also fascinating reading. I consider myself very well-read and with enough years on me that very little I read provides me with a real learning experience. It’s generally stuff I mostly know or have heard enough references to that it doesn’t surprise me when I read something getting into detail. This book is an exception. In short, I learned a great deal from this book, and that made it a delightful read.

Others may be interested in the people of the title, the Polynesians, Melanesians, and Micronesians (a distinction I didn’t even know of until I read the book). There is plenty of that sort of cultural, historical, and linguistic information in the book you will enjoy if you’re that sort. I’m not particularly concerned with the “who”, but I still found much of it interesting. What I enjoyed especially was the “how” in the book: how the sea people navigated, how radio carbon dating is done and how it’s been refined, how researchers overcame, or, more accurately, bypassed, cultural objections to DNA typing of ancestral bones. I learned about star line navigating and the importance of knowing bird species and habits at sea. This book is one of the highlights of the last several months.

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Google Ngram election news

I decided to play the Google Ngram game again. If you’re new to it, it’s played as follows. Enter a word or short phrase (no more than four words) followed by an asterisk into the Google Ngram Viewer and it will show you the words that most frequently follow what you entered in the corpus of books and articles it has scanned. Use that new word to continue the story until you make a complete (if ungrammatical) sentence, then start with a new word or phrase. Since the prediction is based solely on the last three or four words, Ngram loses track of the subject and often the verb, which can lead to some amusing results. The words I used to start these sentences are in italics. The rest is produced by Google. Note: ‘s is considered a separate word by Ngram.

Joe Biden and his wife were both naked.
Donald Trump‘s election as President of the United States of America by Oxford University Press in the UK and U.S. have been the most important thing.
Both candidates were elected to the House of Commons.
Pence‘s office and the police department budget is not a good idea.
Harris and the other man were still alive.
The election results were announced in the press that the United States was the only country in the world.

How companies shaft employees: stock options

If you’ve read my last post you know that corporate officials, i.e. “suits”, are out for their own financial benefit and not for the benefit of the company employees. Take stock options. SEC rules and various laws generally require companies to offer employee stock options equally to all employees.

So you’ve just graduated from college and get hired at Megacorp. During orientation, they tell you that you are entitled to employee stock options. What are those? They are the right to buy company stock at lower than market prices or at a fixed price. Great! you think. That’s a guaranteed profit; buy low then sell at market. Not so fast. You usually don’t get to exercise the options until they’ve “vested.” Typically that’s after you’ve been an employee for five years, although terms vary. SEC rules also prevent insiders, including you, from selling except during certain periods. Also, if the stock doesn’t do well, your option may be worthless, but it’s usually a freebie or low-risk purchase. Other rules apply and taxation varies depending on the type of options. It can be complicated and the topic in general is beyond the scope of this post.

I mainly want to focus on one aspect employers, i.e. the suits, use to game the system and benefit themselves at the expense of the employees. Since options hold the potential to sell at a profit, the suits don’t want a lot of other people selling their shares at the same time, which would depress the price and lower their profits. So how do they prevent it? Through layoffs or scheduled firing of employees before their options vest. People like you work for Megacorp (or a startup – they’re probably even worse) for four and half years and suddenly you get a pink slip. You were doing a good job, you think. Well, they don’t want you and everyone in your entry “class” to exercise their options. You end up abandoning them unexercised. Some state laws may give you some rights, but in general this sort of thing happens a lot.

It’s not just about stock options, though. The related issue is salary. People expect regular salary increases as they gain experience and seniority. In many industries it’s cheaper to hire and train new people constantly and let the senior ones go. It may seem cruel and unfair, but from a business perspective, it’s a valid business reason. They will probably keep the best workers, but they will cull the crop at about that time. Big law firms typically hire new associates every year, and by year five or maybe seven a few will make partner, but most will be shown the door if they haven’t made partner by then. Employers have always cherry-picked the best people, but most used to keep the rest on in lower-paid jobs until retirement. That’s less common now. The difference between the salary culling and stock option culling is that most employees know or expect that they will hit a ceiling on salary at some point but they do not realize that the stock option promise is a false one.

How companies shaft employees: Deferred Compensation Plans

Companies, or, more specifically, the “suits” at the top, take unfair advantage of their employees in a number of ways. This is the first in what I hope will be a series of posts about how this is done. The first method I want to discuss is deferred compensation plans. For most employees, this means your 401(k) plan. There are other plans under the Internal Revenue Code (IRC) that qualify, including 401(a), 403(b) and 457 plans, but the main corporate plans are 401(k) plans.

As you may expect, tax deferral is much more beneficial to the most highly compensated employees (HCE). The official IRS term for the rest of us plebes is NHCE, with a “non” at the beginning. I’m not going to get bogged down in the technicalities of who qualifies as an HCE. When deferred comp plans were designed, the potential for abuse was recognized, so the statutes and regulations required that the benefits of the plans be equally available to all employees, not just the HCE’s. Remember, one goal of such plans is to benefit the government by ensuring that most employees save up a nest egg for their retirement years and not become a burden on the state.

One way the law does this is to require the company to allow nearly all employees in. They prohibit the company from making an employee be employed for years before being allowed to participate. They also want to give an employee an incentive to start saving early, so the plans must require the employees to join up relatively quickly once they do become eligible. This is all well and good, and doesn’t hurt the employee. The real problem comes with the “top heavy” rule.

A company plan is “top heavy” if more than 60% of the deferral benefits go to HCE and key employees, basically, the “suits.” If it’s top heavy then the plan isn’t a “qualified plan” and the suits don’t get the deferral they want. The problem for them is that the low-paid employees don’t make enough money to be able to contribute heavily to the plan. They need their entire income just to live day-to-day. Many, if not most, don’t participate at all. One possible solution would be to pay the rank and file more. But no, that would cost too much and they don’t care about the rank-and-file. They take another route. They determine which employees contribute, and how much, and start laying people off. Generally, this is done by contracting out the lowest paid positions like receptionists, janitors, and security guards. This is not only tough on those workers who no longer get the company benefits but it also deprives the other employees of the higher-quality services they get from in-house employees. I’ve been a security director and believe me when I tell you that an in-house guard is much better quality and more loyal than one working for a security contractor. Even mid-level employees doing a good job are at risk of being laid off when times get tough if they don’t contribute to the 401(k) plan. That could be the deciding factor when the final cut is made and they probably wouldn’t even know that it is.