Category Archives: Business

INTRODUCTION
The trial and conviction of Conrad Black exemplifies the complex nature of corporate crime in the white-collar world. To understand the social problem surrounding his case, this essay will do the following. First, it will examine four articles about corporate crime. Second, it will demonstrate how conflict theory can interpret this social problem. Finally, this essay will suggest some possible preventative measures for this social problem but will conclude that there is no simple means of correcting the systemic social problem that exist in capitalist societies both in corporations and, by analogy, bureaucracies.

Four Articles on Corporate Crime
(1) In the sociological article entitled Re-Imagining Crime Prevention: Controlling Corporate Crime?, Alvesalo et al (2006) argue that there is a lack of political will at the elite level needed to prevent corporate crime in North America. The authors believe that deterring corporate crime is important for society and if there is a higher likelihood of detection then prevention is possible. Alvesalo argues that the legal justice system that seems to ignore corporate crime is not an inherent barrier to gaining justice, but must be adjusted to prosecute corporate offences more effectively. The article strongly advocates surveillance of corporate executives through government monitoring and social movements aimed at detecting corporate crime.

(2) In the criminology article entitled Sanction Threats and Appeals to Morality: Testing a Rational Choice Model of Corporate Crime, Paternoster & Simpson (1996) assess the cost/benefit analysis that a corporate executive might make before committing a corporate crime. They found that sociopaths with low moral inhibitions were most likely to commit corporate crime if the opportunity arose. The article adds that corporate criminals can be deterred if they thought legal action was possible but monitoring backroom business activity is admittedly difficult. The paper argues that appeals to morality and showing the consequences of such crimes are the best means of dealing with this social problem.

(3) In the Canadian Broadcasting Corporation (CBC)’s news article The Rise and Fall of a Media Baron, the author describes Conrad Black as a lavish intellectual tycoon whose successes in the media business gave him public notoriety. Despite his prestige, Lord Black is undergoing criminal proceedings in the United States as a white-collar offender . The article outlines his criminal charges that include personally claiming money that should have been distributed to Hollinger shareholders, billing exotic personal vacations to his company’s account and also racketeering under the RICO Act . The victims are primarily company shareholders in this trial.

(4) In the Maclean’s magazine article Laying Down His Friend For His Life, Mark Steyn central objective is to discredit the testimony of Conrad Black’s former business partner David Radler who is the centre-piece of the prosecution’s case . Steyn’s decries the U.S criminal justice system that is allowing Radler’s plea-bargain agreement which will reduce his sentence and damage Black’s defence . Mark Steyn repeatedly gives a commendable portrayal of Conrad Black as a victim of both betrayal by his close friend and the U.S. legal system which has turned against a successful entrepreneur.

The Conflict Theory Perspective interpretation of Corporate Crime

Corporate crime can be interpreted by using the conflict theory perspective. Conflict theory sees corporate crime through the lens of economic inequality. Karl Marx’s radical critical-conflict approach states that social institutions further legitimize class-based society. In addition, class dictates the type of crime an individual will commit, hence corporate executives commit types of corporate crimes. Conflict theory points out that the economic inequalities within the capitalist society disproportionately incarcerate poor people while seemingly giving special status to criminals based on wealth, power and prestige. This occurs since capitalism will always favour the unscrupulous bourgeoisie who manipulate various social institutions to protect their personal wealth. According to Alvesalo, the elite members such as judges, business-people and some journalists do not see their bourgeois friends as criminals even if there is questionable activity at play. A conflict theory interpretation should also note that there is a legal grey area for corporate crime that may intentionally make prosecution, punishment and sentencing difficult.

Lord Black and the Conflict Theory Perspective

From the conflict theory perspective, Conrad Black is unique because the power struggle is not between the proletariat and the bourgeois but between competing members of the bourgeoisie: the shareholders (with U.S. government support) versus Black and other executives of Hollinger International. I argue, then, that Conrad Black’s case is an example of a backlash from the capitalist elite against a member of their own class. As discussed by Alvesalo, most corporate crime is hidden behind-the-scenes. However, sometimes justice for the manipulation of shareholders becomes publicly demanded . The backlash occurs because corporate criminal charges expose the abuses of the bourgeois class thereby damaging the legitimacy of the capitalist superstructure. As perpetuators of economic inequality, there is a need to protect the capitalist corporations against threats to their legitimacy. Therefore, I believe the U.S. government is primarily protecting the capitalist system by holding a blatant abuser to account. This is in order to protect the overall bourgeoisie from the threat of a mobilized proletariat. Paternoster & Simpson would point out that Conrad Black was attempting to manipulate shareholders because he could rationally deduce that the legal consequences would be limited. The conflict perspective would argue that a high profile corporate executive such as Conrad Black is being publicly humiliated to deter others from abusing the status quo and thereby perpetuating the capitalist system.

In the power relationship, corruption arises because there is no one to hold executives accountable at the top of a corporate hierarchy. The most successful businesspeople end up running organizations by strategic exploitation and using every opportunity to advance themselves. I think that this exercise likely makes them less concerned with morality and more concerned about winning in the struggle to maximize self-interest. At the same time, executive criminality is very difficult to prosecute because executives are skilled at backroom dealing which does not produce much evidence for a criminal case, as is the issue in Conrad Black’s trial.

Problematic Media

Using the conflict perspective, some problematic issues with the Steyn article are noteworthy. The problem surrounds the fact that Conrad Black, until recently, controlled a massive media-empire. I believe that Mark Steyn’s pro-Conrad Black bias occurred in his article because his editor at Maclean’s magazine Ken Whyte is a former employee of the defendant. In addition, Conrad Black’s current wife Barbara Amiel writes for Maclean’s magazine and could not accept criticism of her husband in the same publication. These are two examples of the concentration of the media-ownership that leads to protection of vested interests of leading capitalists who have influential friends.

Conclusion: Social Policy to mitigate the negative consequences of the social problem

Some useful social policies may help to mitigate this social problem. I would suggest there be stronger regulatory agencies, more government intervention where rigorous/appropriate, transparency between corporate executive and shareholder and moral education of business leaders / vice versa. Black created many jobs , broke not just rules but circulation records so respect that this is complex, but here he failed to follow the rules, dude! And he got caught wanting more material stuff, maybe to satisfy his wife. Who knows. Admittedly, solving this social problem will not be easy and capital flight is a common threat against attempts to allow stricter monitoring of corporate activities. White-collar criminals have a special status in society and make it is difficult to prosecute corporate crime when and if it happens. Unfortunately, the negative consequences of this type of crime tend to be more widespread. This fact makes it imperative that something be done to curb the abuses of those in positions of power. More research is necessary in this field.

Work Cited
Alvesalo, A, Tombs, S, Virta, E & Whyte, D. Re-imagining crime prevention:
Controlling corporate crime? Crime, Law & Social Change Vol. 45: 1-25, (2006).
Paternoster, Raymond, Simpson, Sally. Sanction Threats and Appeal to Morality:
Testing a Rational Choice Model of Corporate Crime. Law & Society Review, Volume 30, Number 3 (1996).
Kendall, Diana et al. Social problems in a diverse society. Pearson Education Canada,
Toronto, Canada, (2007).
Steyn, Mark. Laying Down His Friend For His Life. Maclean’s: Volume 120, Number
20, May 28th, 2007.
http://www.cbc.ca/news/background/black_conrad/rise-fall.html

Business

Unprovable Partisan Opinion

December 31, 2008 Professor Nerdster Leave a comment

Unprovable Partisan Opinions or UPOs are persuasive statements that pretends as though they are absolute truths. For example, the statement:

“There is no doubt that I owe my happiness to my wife.”

Of course, you would say that because you love your wife, she’s awesome and the best thing that ever happened to you, but there are likely alternative realities where you have a different wife or you never married in which you are still happy. In the above statement, you are saying my wife caused your happiness. She makes you happy. Maybe your happiness is contingent on a whole complex set of variables for which your wife is a significant variable? Just a guess. But your statement is partisan in the sense that your family is your team. It is a statement that is emotionally charged to convince the audience and indeed yourself that you need your wife to be happy. It is not prove-able that your happiness depends on the existence of your wife. Nor is disprovable since you can’t untangle your wife from your life without a bunch of paperwork etc.

Okay try this one.

“My university is the best in the world”

What if I told you that there is an alternative reality where you went to another university and that in that parallel universe you also said “my university is the best in the world”?…How do you know this is the best university in the world if it is the only university you have ever experienced? You don’t!

Still not getting it? Okay, so in politics, UPO are used constantly.

“Trickle down economics does not work”

How can we know that the Keynesian alternative policy is better if we applied “trickle down” during the period in question? You can’t simply do a time series data analysis and say, “see, the economy went down hill during the period that we had trickle down economics.” That’s just flabby thinking. And what if the economy goes up during a period where that policy is in place? The nuance is that we can deduce that a given policy works for some but not for all. And frequently, the people who bet a policy will work for their own self-interest will be that policy’s biggest advocated. But we really aren’t serious if we shout from the roof tops that X policy doesn’t work because we disagree with the values that underpin that policy….

Try this one.

“We just needed a few more years in Vietnam and we were gonna win that war.”

First of all, 1975 is when the US left Vietnam. This quote says that staying would have led to victory. There is no way to access the reality where that policy was tested and proven correct whatever winning looks like anyway. So that’s maybe an easier way to understand UPOs.

Unprovable because we can’t access that reality.
Partisan because it is backed position of a political group to which the speaker is a part of.
Opinion because it is not rooted in data or facts that we can review.

UPOs are used in academia a lot as well. However, a good university paper has to talk through all the counter arguments. In fact, a good university paper in social sciences relies on have a UPO that you then defend…. which is why academia is considered more about teaching that doing useful things that help the world.

UPOs are a core problem with data science, too. We don’t have control groups when it comes to policy. People will screw up your experiment every-time by being unpredictable. People aren’t atoms to be pushed around….Your public policy will have unintended consequences. And yet we know you are engaging in a UPO when you insist that it was your great decision-making that led to any positive outcomes and any negative outcomes are due to the complex variables that comprise human experience.

Business

Stephen Lewis and the Race Against Time

September 19, 2008 Professor Nerdster Leave a comment

Introduction to Race Against Time

Stephen Lewis is the UN Secretary-General’s special envoy for HIV/AIDS in Africa, one of the most influential academics dealing with African politics in North America. The Race Against Time was about Lewis’ experience in Africa. Africa’s 48 countries are damaged by the departure of colonalization, the cold war etc. Stephen Lewis has been dedicated after his many trips to Africa. Nails and coffins are not just metaphors in Africa. He was told stories by survivors of dead parents. He told the story of a girl, with piercing green eyes, who could barely speak. Many of the people he met were HIV positive. These parents are most concerned about whether their children will know them. The children of Africa are becoming increasingly parentless as generations lapse into the cycle of death and renewal. Lewis has been deeply touched by the emotional impact of what he encountered on his journeys, given it’s vast differences with his Canadian lifestyle. He wants other to care about Africa as much as he does. Visiting, and working in African has been an emotionally significant experience for Lewis.

Lewis’ African Experiences

Lewis flunked out of the University of Toronto. He worked for the Socialist International in London, England in 1960. David Lewis was his father. Social Democratic past. Having visited a majority of the countries on the continent, Stephen Lewis fell in love with Africa, particularly Ghana. He taught English in Akra. Lewis fell in love with his students (platonically). Lewis believed that people there are universally friendly, loving and open….He found out years later that many of his students had been killed in the 1970s-80s. Lewis has been deeply impacted by their deaths. In the 1950s and 60s, Africa was an exciting place of new potential. But AIDS and SAP changed everything.

AIDS & HIV: West Africa is only able to contain the virus. In the South, Aids is out of control. Grandmothers have stepped in to help the ill. There were 36 orphaned children in the village where HIV was first diagnosed in 1982, according to Lewis’ visit. There are 1000s of families where the head of the household is under 15 years old. With the death of the mother, children have to fend for themselves. Who is doing anything for the orphans?

Hunger Food: all communities are hungry. Poverty used to be about having no money. Lewis notes that Mozambique to Swaziland, these people are not asking for drugs but want food. These people were desperate about food, starvation is massive. Aids treatment is very difficult without food. Combating any disease is difficult if lack of food is a factor. Entire generations of skilled labour are wiped out in the scourge of AIDS. The solution is to move towards prevention and education. BUT without food none of this is possible. Africa can be helped at its foundation: food production.

Structural Adjustment Policy: The SAP is the imposition of conditionality using macroeconomic theories implemented by the IMF. It is right wing economic thinking. They impose ill-conceived conditionality on Africa that is extremely damaging. Making aid conditional leads to deaths. You can’t adhere to an economic dialect when people are dying, according to Lewis. The cutbacks on spending in African countries are imposed by the IMF and the World Bank. There are user fees for health and user fees for school. At the heart of structural adjustment by the banks is the curtailing of the public sector and enhancing the private sector. This is at the expense of the civil society. People cannot afford healthcare. In exchange for African nations improving their governance would receive financial support from Western nations. The cerebral aristocrats at the World Bank are more interested in structural organization than the vulnerability of people. SAPs were driven to spearhead African economic recovery. Jeffrey Sachs believes terrible mistakes were made in Africa as well. But the World Banks and IMF were so smug and arrogant about the human consequences of their policy. They ignored the evidence that economies were not responding to the macroeconomic strategy. The African people were a laboratory for economic experiments.

Primary Education: Catholic schools are claiming that condoms are not successful in preventing AIDS, according to Lewis’ travels. The students wanted reliable information about condoms. Girls are being pressured into having sex. The pandemic is massive in Africa. The UN demands that all children should gain from schooling. Schooling allows better health, opportunity, and economic growth. Universal primary education is a primary source of economic growth. UniCef abdicated responsibility from the principle of universal education. Lewis believes that school fees should be abolished. Lewis sees fees as a deterrent to attendance. He doesn’t discuss the quality of teachers…Schooling has costs but those should be overcome. Lewis says that if AIDS, Food aren’t an issue, primary education is the goal. A World Bank loan was dependent on Zimbabwe’s imposition of school fees in 1997. The illumination of school fees is becoming an endless talk but no walk. When Uganda removed school fees (during an election), the number of students tripled. In theory, the UN and everyone supported universal education. Lewis takes issue with African people who are willing to compromise on education. The media does not punish world leaders for ignoring the education crisis. Western ambassadors were stubbornly opinionated about their views while they are really just angry that they were posted in Africa & never venture out of the capital city. Some kids are awarded scholarships to Secondary Education at age five before all of the students can develop.

International Aid: Lewis notes that subsidization of American and EU farmers costs 5 times the amount of foreign aid being given to African nations. This means that the EU gives their cows $2.50 USD per day where as Africans live off of less than $1.00 per day. The totalitarian regimes in Africa prevent G8 Nations from acting to aid the pandemic of AIDS in Africa, according to Lewis.

The Scourge of Debt: In 1988, the developing country ambassadors were skeptical of the economic growth through trade and a fair agreement at the Uruguay round of discussion. Other than trade, the African debt is also a massive setback. African countries are spending much on debt reduction and therefore can’t get healthcare. Because of Totalitarian regimes, African had 294 Billion dollars of debt from 1970-1992. Africa paid back 260 Billion mostly of interest. Africa is still 230 Billion dollars in debt. Africa is forever in a cycle of debt reduction. The Pentagon wrote-off 31 Billion dollars of debt in Iraq post-2003. They should be able to do the same for African nations.

Official Development Assistance: Lewis advocates the ODA. The ODA is sourced from the G8 nations. Tony Blair called for 0.7% of GDP by the G8. Lester B. Pearson set the benchmark of 0.7% of GDP for foreign aid. Few countries have come close to that number, unfortunately. Scandinavian countries are the only countries to go beyond 0.7% GDP. The US and Japan do not come close to fulfilling the basic benchmark. Italy is unreliable. UK and France promise to meet the benchmark by 2012. Japan wanted a seat on the Security Council and needed support of the African countries at the G8. SO, Japan made a promise to double its support from their previous numbers, unfortunately Japan doesn’t contribute much at all. The US only gives 3 Billion dollar per year. Bush might double that funding.

Political Short-Term Leadership: Paul Martin will only be around for a while. Bush won’t be around in 2010. Blair will be gone as well. Most G8 leaders in 2005 will be out to pasture. Martin propounds the vitues of the policy but doesn’t achieve the goal. The responsibility will be for the next set of leaders. Promises that are not kept internationally are a serious moral failure. Lewis has not faith in the political leadership.

Counter-Arguments to ODA: The problem is that most of the aid doesn’t get to the people who need it on the ground. 60% of ODA should be called phantom aid. Where does it go: technical aid (overpaid consultants) and administrative costs (inflated overhead). If the phantom aid was made real it would have dramatic positive effects. The G8 manipulates figures. They have betrayed Africa.

Women in Multilateralism: United Nations in 1985 didn’t have a single woman in the executive level. You need a lifetime to understand a project like communications at the UN. But few women are actually involved until 1997. Male authority is difficult to break down. Equality of man and women is a human right. Men head all IMF, UN, WORLD BANK. The imbalance is striking between women & men. The promise of women’s rights is a lie. Tony Blair created a commission where only 3 women of 17 spots were positioned. Social democrats are supposed to be sensitive to this issue but Tony Blair is not really in the same league as Lewis. Blair’s Commission for Africa was really weak on women’s topics. You cannot be serious about Africa if you are not serious about women in your own policy administration. Institutional rejection of women’s issues is widespread. African government’s don’t have watchdogs for women’s rights.

Business, Finance

TRUMP: How To Get Rich

July 16, 2008 Professor Nerdster Leave a comment

TRUMP: How to Get Rich by Donald J. Trump

Business Rule #1:

If you don’t tell others about your success, they probably won’t know about it. The Art of the Deal was a best seller, selling 3 million copies. Trump doesn’t do it all for the money, BUT money makes dreams possible. Trump is a billionaire author with a hit prime time television series called The Apprentice.

Business Rule #2:

Keep it short, fast and succinct.

Part 1: Donald J. Trump School of Business & Management

Trump has 20,000 employees and running a business is like being a general. Your employees’ lives are dependent on you and your decisions. Be careful when choosing new employees. Don’t get mediocre people. Attitude is important. Have people around you that you can trust. All of Trump’s senior officials are trusted people. Sometimes your employees need a jolt or they need to be cajouled. Cater your inspiration to the specific worker you’re dealing with.

STAY FOCUSED:

The Late 80s, Trump lacked attention to his business, he loved Fashion shows and beautiful women. The real-estate market crashed in the late 1980s almost runined Trump. A begger on the street was worth 9.2 Billion dollars more than Trump was in 1989…Forbes was very pleased with Trump’s crisis. Fortunately, Trump has allies in the banks, at 3am Trump walked to CitiBank. He phoned Japanese, Austrian banks. Trump personally guaranteed a billion dollars. Trump suggests that you never guarantee anything in life.

MAINTAIN YOUR MOMENTUM: don’t marry the wrong women, don’t retire from you business. Mr. Levitt lost his momentum. He left the world of business for 20 years. No matter how much you think you know your business, you need to be re-trainned regularly. Whatever you are managing, don’t assume you can glide by without constantly refreshing your knowledge.

GET PEOPLE YOU TRUST:

It’s good to be paranoid but not with your own team. Hire people you can trust. Hire loyal people. People who have pride in their work and save the company’s money are the employees you want. Watch out for the bottom line. Don’t expect smooth sailing. A business is an extended family. Problems should be seen as an opportunity. Your company is a living breathing organism; watch out for bad cells while allowing good cells to grow. Having a passion for what you do is crucial. If employees can see your energy.

DON’T EQUIVOCATE:

Politicians do it all the time. It’s condescending. Be blunt and fast not intellectual. Don’t be on both sides of the fence, don’t triangulate. Make sure you and employees take a stand on an issue.

Don’t back stab, if people have time to be petty, they don’t have enough work.

Don’t be pushy, be assertive:

Don’t interrupt someones tempo. If you idea sucks it may not be instep with other plans. Recognize when not to press an issue. Don’t give up, but don’t be a pest. Keep your entenna up. Your idea might not be a terrific idea. Or perhaps you should leave the company to pursue that idea on your own.

DON’T UNDERESTIMATE PEOPLE:

You need to focus on the talent instead of the title. Try to find the hidden potential that everyone has. Be a leader by recognizing it. Look for fresh possibilities in a company. Trump has turned his body-guard into a VP at Trump International.

“How LONG had you been working here? Since they threatened to fire me!!!”

DON’T DEMORALIZE PEOPLE:

Your words are extremely powerful. Don’t force people to do things, persuade people. Lincoln said: all men can stand adversity, but to test a man give him power. Don’t forget to keep your door open.

Don’t be a know-it-all!!!

CULTIVATE A LEARNING HABIT:

Read, write and study all your life. You don’t have to be a scholar. But you do need to continue to learn. Expand your horizons, try to learn about other cultures. Americans should pay more attention to things outside the American realm. Make an effort.

Part 2: Career Advice from Donald Trump TAKE CONTROL OF THE INTERVIEW:

First impressions are deceptive. Don’t always assume that the boss will hire with a great interview. People are looking for a skilled intelligent person.

ASK FOR A RAISE AT THE RIGHT TIME:

Don’t ask the boss on the worst possible day. If everyone is down do not ever ask for more money. You should seriously consider asking for a raise on a sunny beautiful day.

BE TENACIOUS:

Trump is building Trump Place. It is an example of why tenacity is a good move. He has been trying to build this for 30 years. Trump built a golf club: Trump International golf club. Trump is extremely supportive of golf courses. People with passion will never give. It is a momentum that will make you indominable. Some people should stay out of business. If they aren’t passionate then they should move onwards to something else. Don’t do something you don’t like for a living.

Turn your passion into profit.

NEVER CONFUSE FACTS WITH FICTION.

DON’T FEAR THE BRAND NAME:

Brand names are a way of holding standards. Who is going to eat a No Name brand hamburger? Who would you sue? The name is crucial. We all know the power of brand names. It is a viable outlet for creativity. Becoming a brand name is an excellent thing. An unknown developer is not going to be successful. The problem with brand names, the media will take a shot at you. Don’t be afraid to brag a bit. Toot your own horn. Celebrate your successes.

It’s not personal, it’s business.

GO WITH YOU GUT:

Have some instincts, and follow them. You need to gain strong business instincts. Trump knew within seconds that Mark Burnett was going to make The Apprentice excellent. Our conscious minds are useful but the unconscious tendencies will be crucial for decision-making. Learn to read people’s gut reaction.

BE OPTIMISTIC BUT EXPECT PROBLEMS:

Don’t be surprised. Be prepared for problems. Always be optimistic publicly but anticipate the horrors of failure.

LOOK CLOSELY BEFORE CHANGING CAREERS:

Know all about what you are getting yourself into. You need to equivocate in politics which is the significant problem with transferring from business to politics. This is why Trump decided not to run for the Reform Party in 2004. You need to be blunt in business.

Donald Trump’s Rules for Public Speaking

GET OVER SPEAKING IN PUBLIC:

• Be prepared by reading.

• Have examples and references.

• Make anecdotes as vivid as possible.

• Don’t read a speech: it will be boring.

• You need to cover your bases mentally.

• Be a good story teller.

• Involve everyone. Tune people in.

• Story Telling is a skill.

• Learn to think on your feet be flexible.

• Be aware of the common denominator.

• Keep it all in perspective.

1. Think about your audience first

2. Get your audience involved.

3. Be prepared

4. Be a good story teller

5. Be aware of the common denominator.

6. Be an entertainer.

7. Be able to laugh at yourself

8. Think on your feet

9. Listen

10. Have a good time.

11. Study Regis Philbin

NEGATIVITY MUST BE AVOIDED:

Negativity is a form of fear. Don’t fear the problem. You need to start thinking positively or you will sabotage yourself. If you have received a lot of hard knocks. Don’t open the door to more knocks. Hard knocks are an insight into more trouble. Think about how more fortunate you already are. You can always better you best day. Engage in positive thinking and have a little blind faith.

Change your attitude and gain some altitude.

NEVER GIVE UP:

Children with handicaps seem to fight for everyday they have been given. When you’re down another day can be another chance. Keep going, keep on trucking. Feed yourself some positive thoughts. Certain people keep going because they stay positive. Lincoln had a lot of faith, he didn’t receive much encouragement. Some people are losers unfortunately, they’re attitude is so low that they are below sea-level.

“Imagination is more important than knowledge” Albert Einstein

READ CARL JUNG:.

People become persona’s that they forward in public. In private we are very different people, according to Jung…By not assuming an EGO, you will defeat you opponent…

HAVE AN EGO:

It is the centre of our consciousness. Get an EGO, Get a LIFE. No EGO means very little life force. Strive for wholeness. Knowledge is power. Your mind can build castles but make sure the foundation is in place first.

PART 3: Money, Money, Money

STAY WITH THE WINNERS:

Beware of instant stars in the world of finance. Trust the people who are successful consistently. Invest simply, don’t take unnecessary risks. Some people have extremely complicated explanations for market trends BUT Warren Buffet knows how to break it down simply. Invest with companies you understand.

Donald and Ivana Trump (Photo by Bob Sacha/Corbis via Getty Images)

GET A PRENUPTIAL AGREEMENT:

People have a right to protect their assets. Don’t let a women trick you into not signing a prenuptial. Ivana’s lawyers were extremely vicious but we signed a prenuptial agreement. There is nothing wrong with common sense.

DO IT YOURSELF:

You need to be direct with people and meet them directly. Lawyers will try to get rich by churning billable hours. Go right to the top and get something done. Whenever possible settle, it saves a lot of time.

MAKE SURE YOU UNDERSTAND THE VALUE OF MONEY:

Money is extremely serious. The sooner you understand the value of money, the better. Don’t be careless with money. Children learn from what they see. If you enjoy gambling, your kids will like gambling too. Don’t have goof-off kids. You cannot enter the financial world without understanding money.

PART 4: The Secrets of Negotiation

“If you have them by the balls, their hearts and minds will follow.”

BASIC PHILOSOPHY:

It’s all about persuasion, not power. Just because you are successful doesn’t mean you have to act like a bulldozer. You don’t need to coerce people into following you. Power is not just about calling the shots. It’s about ability. No one will take notice if you call bad shots. Know what you’re doing: convincing others. Study the art of persuasion. Don’t expect people to believe your bullshit. Give people analogies, if you go to far over their heads they will be upset. Use humour and you will be successful. We all need to have a healthy dose of confidence. Don’t bulldoze. There is a fine line between acceptance and resignation. Don’t brow beat them into believing you. Let them think they are in control. He Who has the Gold Makes the Rules: let the others talk and observe your body language. Most negotiations should be calm. The best negotiators are chameleons. Learn the value of saying “NO”. Know what they want from you.

CONSIDER WHAT THE OTHER SIDE WANTS:

The Kinson group, that Trump was doing business with, had no idea about renovations in 1995. Kinson was failing at renovating 40 Wall Street. Trump wanted a restructure ground lease. The Kinson family wanted out fast and Trump knew it. 40 Wall Street was bought by Trump. If you want the truth, you should try to get direct contact with the decision makers. Trump made a deal where that the lease would need quality tenants + no fees during the renovations. In the mid-1990s, Trump was able to make a great deal from 40 Wall Street. Trump knew what the other side was thinking. Afterwards, the market started working in his favour in 1995. Trump won big.

BE REASONABLE & FLEXIBLE:

40 Wall Street had tenancy and a vacant building. Trump was asked to pay the broker 60 G per month as a retainer because the broker had no faith in Trumps abilities to make the property viable again. The broker was inflexible and Trump fired him. A new broker came in and made millions.

TRUST YOUR INSTINCTS:

The depressed market for office tenants made it suggestable to rent out to a residential conversion of 40 Wall Street. Trump believed it would be a private office building location. They decided to have the building turned into 3 sectors. They turned the top 700,000 Square feet into boutiques who wanted a high view. The middle 300,000 would be office buildings. Today, the building is worth hundreds of times it’s value in 1994.

KNOW EXACTLY WHAT YOU WANT & KEEP IT TO YOURSELF:

Be careful about what you reveal, you will know about the contours of the deal. Trump had crucial information during negotiations. He led the people he was dealing with to believe that he was only interested in the air-rights for a Trump Tower when he wanted to buy the lease. He gained leverage by controlling knowledge and expectations.

WHAT WE THINK WE WANT MIGHT NOT BE CORRECT:

You might learn that what you wanted was not really what you wanted. Trump assimilates new information quickly as negotiations proceed. Trump loves negotiating. There is a duality with negotiation. Before you begin negotiating, write down your objectives and their objectives. Know what you want and reveal it at the appropriate time.

MAKE SURE BOTH SIDES COME OUT WINNING:

In purchasing the Atlantic City Casino’s, the battle over the property helped his negotiating opponent’s popularity. In a good negotiation, all sides win.

LET YOUR GUARD DOWN:

See what the reaction is to a planted comment. This will help you, study the person’s history. Let your guard down to learn something about your opponent.

BEING STUBBORN IS AN ASSET:

Trump wanted to transform the Commadore in New York into a viable property. His plan was:
1) buy the land from the landlord,
2) induce the railroad to pay the back taxes with the purchasing power gained from Trump’s purchase,
3) convince the city to accept a deed to the land to end all existing leases,
4) fixed rental and share of the profits in lieu of taxes,
5) have hotel operators to join the project since Trump had no hotel experience,
6) convince a bank to loan Trump 80 Million dollars.
This was a difficult deal. His lawyer thought this would have been crazy. BUT it worked out. It is now called the Grand Hyatt of New York City.

BE PATIENT:

Know when to be patient. One good way to make the deal accelerate is by not looking to eager for a deal. Trump would delay a deal until his opponents were getting itchy enough to settle for a lower bid. These folks waited the time to give Trump what he wanted to get. Distract the other side. In gambling, if you have no bankroll, then others will target you for obviously having much more to lose in a deal. Trump was having trouble with an impatient opponent so he threw out his false concern about the building’s history, thus delaying negotiations so that he could get his bearings.

BE STRATEGICALLY DRAMATIC:

Kofi Annan tried to stop Trump’s construction near the UN. Trump didn’t say anything critical about the UN. Trump knew that some ambassadors might want to live in Trump’s building. NY City Lawyers tried to tax the hell out of Trump’s project. Trump sued the City of New York. Trump reached a deal where he would take 17%. Trump had to support Bronx’s housing.

SOMETIMES YOU STILL HAVE TO SCREW THEM:

Go after someone who has attacked you as viciously as possible. Live by your principles. Like it says in the Bible, an eye for an eye.

BE PARANOID:

It’s a jungle out there. We are worse than lion’s. Getting retribution and paranoia can be a waste of time, however. If you can dismiss a negative you should do so. Save time and focus on bettering yourself and your family. But again, sometimes you have to screw people back.

Some people deserve to be screwed back:

For example, Trump gave money to two restaurant entrepreneurs. A year later, the owners hadn’t given him a single dollar even if these owners were making a great deal of money. Trump felt that these people had screwed him out of money for his investment. Suing them would have cost a lot of time and wasted effort given how much he gave those dudes. They knew they could get away with it. But now, Trump won’t even recognize these entrepreneurs in public.

Also, Mario Cuomo was given a lot of funding from Trump during his run as governor. Then, after Cuomo was removed from office (for hiking real estate taxes) Trump wanted some help with a simple above-board request from Cuomo. Cuomo said “NO”. Trump screamed at Cuomo for being disloyal for a proper simple request.

In addition, Pete Dockings had a charmed life. Rhodes Scholar etc. Dockings wanted a Vietnam monument in New York. Trump provided over a million dollars. Trump used the best unions he could find to help build the monument. Trump did a lot of work to make the project a success. BUT Dockings took all the credit for the creation. Later, Trump wanted some help but Dockings didn’t want to help Trump for some unknown reason.

Sometimes you have to hold a grudge.

LEARN THE POWER OF SAYING “NO”:

Trump disagreed with CBS’s partnership with The Miss Universe Pagent. Trump bought the CBS out of the project. Trump had to say “NO” to CBS’s tactics which were not working. Trump took control and made sure they got back to focusing on beautiful women. Trump made a new partnership with NBC. The ratings were higher than ever and Trump created a great opportunity elsewhere with NBC.

DON’T KNOCK EVERYONE:

If you attack everyone, you will lose a lot of friends. Don’t attack everyone; that is foolish. You can knock some people but never everyone.