Naomi Klein & John Grishom versus Bankers, Lawyers, Milton Friedman and the Skewed Thinking of Modern Business

Have the tenets of Naomi Klein’s book, THE SHOCK DOCTRINE, affected Americans view of the world and how does her work fir in with our age and memories of America? This article begins to explore the shifting paradigms in America’s social and political education. The article looks at the works of sociologist William Cecil Headrick and the writings of John Grisham as well.

By Kevin Stoda

My older brother majored in business in the early 1980s. His professors forced his classes to watch a whole series of videos by the monetarist, Milton Friedman (and various generations of cronies from the Chicago School of Economics). My brother argued and argued with his professors about the blatant propaganda and poor economic development offered by Friedman as a core character in the theory of doing business in America.

“Friedman’s basic assertion [was] that money supply and monetary policy is (almost) all that matters for nominal output fluctuations.”

http://homepage.newschool.edu/het//essays/monetarism/friedmanchicago.htm

This popular monetarist model had already reached its pinnacle in America in the 1970s and helped lead to 20% interest rates across the land in the year before Jimmy Carter was elected president. However, the New Classicals Economic Theorists from the Chicago School, who learned from such monetarist foibles came to be in charge of American national policy in the 1980s and eventually resurfaced as both neo-liberals and neo-cons in the subsequent decades. Likewise, a subsequent turn towards neo-classical political-economic-inspired leadership soon took power globally Finally, in the last decade, all of this misguided theory and practices combined with the bottomless spending pit of a 3-front war on terrorism—and led to the greatest global economic collapse (in 2007-2010) seen in over 3/4 of a century.

MONETARISM & NEO-CLASSICAL ECONOMICS

It is important to note that to “the lay public, Milton Friedman is best known for his political views.” Ronald Reagan coopted the national drive of the monetarists of his era. “Its well-known features are captured succinctly in his [Friedman’s] words: ‘The basic long-run objectives, shared, I am sure by most economists, are political freedom, economic efficiency and substantial equality of economic power…I believe – and at this stage agreement will be far less widespread – that all three objectives can best be realized by relying, as far as possible, on a market mechanism within a ‘competitive order’ to organize the utilization of economic resources.” (M. Friedman, 1948)

One website on the philosophy of economics (from the New School) answers the question: “What are the main features of Friedman’s “Monetarism”? The central ones can be listed as follows:

http://homepage.newschool.edu/het//essays/monetarism/friedmanchicago.htm

(1) monetarist transmission mechanism: urging that agents dispose of excess money supply by purchasing goods rather than bonds.

(2) stability of money demand: belief that, in practice, the demand for money is a stable function of wealth, prices, price changes and interest.

(3) money-to-income causality: that movements in the money supply have been the primary cause of business fluctuations and that movements in aggregate demand for goods have relatively little impact.

(4) natural rate of unemployment hypothesis: belief that there exists a unique rate of unemployment that is associated with non-accelerating inflation and that, in the long run, the economy will settle at such an unemployment rate.

(5) superiority of monetary policy rules: assertion that monetary policy is much more effective than fiscal policy, recommendation that Central Banks target money aggregates rather than interest rates, and that following a steady money supply growth rule is, at least in the long run, better than a discretionary, counter-cyclical monetary policy.

According to the New School authors, “There have been effectively two distinct stages of ‘Monetarism’ – one surrounding the money-income causality debate that raged roughly within the 1960s and another stage surrounding the Phillips Curve and the acceleration hypothesis which was dominant in the 1970s. Both of them stem from two extraordinary pieces by Milton Friedman – one published in 1956, another in 1968. Although superficially distinct, both these contributions are intimately related within the research program of Monetarism.”

In addition, the New School writer notes, “At the policy level, Monetarism had its age of glory in the late 1970s and early 1980s. Two policy moves that have been traced to Monetarism were the abandonment of interest rate targets and the adoption of money supply targets by many Central Banks in the late 1970s and, most infamously, the attempted disinflations via monetary policy around the same time in the United States and the United Kingdom. The largely disastrous results of these policy experiments did much to discredit strict Monetarist doctrine among economic policy-makers, but certain aspects of it – most notably the natural rate hypothesis and the money supply-inflation link – remain standard beliefs even today.”

The aftermath of the powerful political, social, and economic alliances of the 1980s had left the monetary policy in shambles around the globe, especially after Reagan got away with bloating the U.S. federal budget significantly and Thatcher initially had to spend nearly a decade hollowing out much of her own economy in order to restart things by the start of the 1990s. In short, it appeared in many quarters that the later-developed, neo-classical schools of political economy had much more to say (than Friedman’s monetarist school) about how economies work at the macro level and how they can be managed and manipulated for the best electoral results.

Meanwhile, as far as academic jobs and tenure in the Western World went along in the 1980s and 1990s, it was fairly impossible in countries, like Germany and the USA to obtain stable work as an economics professor if you questioned the hunky-dory dreams and predictions of neo-classical economics.

http://homepage.newschool.edu/het//thought.htm#alternative

This doesn’t mean that neo-Keynesians and others could not coexist in some circles, but they had to first learn the language of the neo-classicalists and fight back in the propaganda wars that had been waged against the neo-Marxists, the neo-Keynesian, and other alternative theorists.

Only in the last decade, have Naomi Klein, Paul Krugman, and Joseph Stiglitz reemerged as a balance to the international dominance of the Neo-classicals. [Interestingly, Asian economists and theorists are usually missing from global recognition although they and their state-partner economic planning mandarins have been quite successful over the past 4 to 5 decades.]

http://www.adamsmithesq.com/archives/2008/10/nobel_prize_in_economics2.html

http://network.nationalpost.com/np/blogs/posted/archive/2009/10/12/nobel-prize-winner-hopes-victory-will-attract-more-women-to-economics.aspx

RESULT FOR SOCIETY

The main result in society, especially the USA, has been a greater stratification of society than has occurred for 7 or more decades.

http://www.abbeyclock.com/cecil/index.html

W. Cecil Headrick has written extensively about the issues of social stratification. It is already extensive and facts are often different than the assumptions of generations, but the news—in general—has been bad for 5 decades now.

Ten Points on Social Status in America Today by William Cecil Headrick

1. Social stratification is relatively rigid. Your position in society tends to be determined by that of your ancestors. You learn your values, ambitions, drive, and determination to succeed, and set your goals from what you learn from your family members. Families make every effort to maintain their status and pass it on to their children. The ingredients of status are wealth, education, and manners (etiquette, refinement).
2. Everybody wants to rise, of course, but only those with exceptional drive are able to, usually through education and therefore productivity. This means that societies can facilitate mobility with the use of academic scholarships, education in the military and “free” schools (paid for with taxes). Property taxes and progressive income taxes also help to level the field. However, there are mechanisms in place to keep you in your place: ‘ . . . the open road to status for all climbers, it has been shown that if an upstart threatens to crash into the hereditary upper class, “gangs up on him,” and he relapses ignominiously “into his original [lowly] status.” ‘ [See Chapter 4, page 127.] While this quote described the Kwakiutl Indians, similar mechanisms also existed in American society [also see Chapter 4, pages 135 and 136 ("Secrecy . . . "), and the Summary on pages 155 and 156], that are still used extensively today.
3. There are strong ties between wealth and status. Money can make more money if wisely invested. The wealthy usually educate their children well, giving them the tools to be highly productive economically. As for the distribution of wealth, “Federal Reserve figures for 1989 found the wealthiest 1 percent of American households (with net worth of at least $2.3 million each) owning nearly 40 percent of the nation’s wealth, and the top 20 percent of American households (worth $180,000 or more) own more than 80 percent.” In 2001, “the top 1% of Americans now have more personal wealth than the bottom 92% combined!” (From The Future of Money, by Bernard Lietaer, Random House UK).
4. Those lacking wealth are unable to take advantage of opportunities. The American Dream (read Chapter 12) is available to those who are able to take advantage of the opportunities. Those with good education and strong motivation can rise but with difficulty if they start with little or no wealth. Those with good education, strong motivation, and some wealth can rise more easily and more quickly. The lower you start, the more difficult it is to rise, and the further you must rise to get anywhere. Better employment positions are often determined by social position as well as by qualifications: “Every vocation under our industrial organization yields an income; and only the propertied person is in a situation to seek out for himself the more lucrative positions…while the unpropertied person must be content with the inferior positions.” [Page 5] However, inferior positions are evaporating as American companies, while telling us to “Buy American,” choose not to “Hire American,” as they export American manufacturing jobs to whichever country offers the cheapest labor. Many better jobs, such as positions for computer programmers, are also disappearing. All these jobs are replaced by lower-paying positions in the service sector. “Exploitation of human labor” is one of the mechanisms mentioned on page 156. “Workers at the 20th percentile of earners made $8.31 an hour at the end of last year [2002], according to an analysis of government data by the Economic Policy Institute. The median worker [50th percentile] . . . $13.36 an hour” (New York Times). This means that fifty percent of working Americans do not earn enough to support a family of four, particularly if they must pay 30+% of their incomes for shelter, so both parents must work. Was this supposed to be the American Dream?
5. Education and motivation are essential but not enough. If you lack wealth (and therefore live in a rented apartment in the wrong zip code: this is how employers know!) and lack connections (the employer does not know who you are), you will probably start at or near the bottom, even if you are well qualified (read: educated). Starting at the bottom means the rise will be steeper, slower and longer. Education places you at an advantage over others who are less qualified, if you are willing to use your education productively. “A 1979 Carnegie study found that a child’s future to be largely determined by social status, not brains.”
6. Most employers are looking for people with qualifications who are “hungry” and willing to work hard for less pay. Economic recessions can devastate careers, both for the employed who lose their jobs and for young people ready to begin their careers. Employers almost always ask: “Are you currently employed?” In other words, how desperate are you? Your unemployment puts the potential employer in a stronger bargaining-position, and you will have a much harder time getting the employer to take you seriously. As far as the employer is concerned, the unemployed has little or no status, little or no credibility, and little or no worth.
7. Loss of social status is often caused by the consequences of war [See Chapter 5, page 171] and by chronic illness and/or premature death of the breadwinner, more common before the development of antibiotics. High medical bills can also ruin families. Substance abuse by the breadwinner, such as alcoholism, can reduce productivity and result in social descent. Divorce, so common nowadays, can result in social descent because it can ruin families financially. Credit card debt can also ruin families financially. “The oppression of debt is found in lost farms, homes, and even personal liberty.” [See Chapter 4, page 149, Soll und Haben. The poor borrow; the rich lend.] The “unpropertied” effectively work for their masters, the “propertied,” as they surrender a portion of their income as rent for the apartment (or other property) they live in, for the cars they drive, and for the money they must borrow to make ends meet (to eat and pay the rent). Our culture wants us to live now and pay later.
8. The last three points address issues concerning how people acquire their social values. Many homes in America now have two working parents, struggling to pay the rent (or mortgage), the car payment, and the credit card bills. If both working parents are too tired to raise the children, then the school system, daycare and the television are expected to raise and entertain the next generation. Playing in the neighborhood with other kids has been replaced by video games that discourage social interaction. Society is alarmed when children grow up without the social values their parents inherited from their grandparents and great-grandparents.
9. Before the modern age of cars and planes, families usually lived near their relatives. The children grew up with their cousins, uncles, aunts, and grandparents. Children learned the social values from their relatives as well as from their parents. As the parents’ jobs take them to distant locations, children lose touch with their relatives. Family values become less important.
10. Children learn social values from their religion. The Christians, Jews, Muslims, and others emphasize values and rules of conduct clearly in their religious teachings. The Bible, for example, teaches against greed and envy, borrowing and lending for profit (in other words, exploiting others in need). The Bible teaches humility, charity, and respect for others. The processes of social stratification are contrary to religious teachings. Six days of work and one day of rest have been replaced by 24-7. The dollar is king. School prayer has been abolished. Virtually everything American children experience in reality contradicts the religion of their parents and grandparents. If religion becomes increasingly irrelevant, what implications will this have for the future of our civilization?
Most Americans today are either immigrants or descended from immigrants. The objective of Cecil’s thesis was to demonstrate that there has been little social mobility in American society. Higher-class immigrants remain higher class today. Lower-class immigrants remain lower class today, regardless of nationality, religion, or race, or when they immigrated. There are, of course, individual exceptions. Cecil also compared social stratification in various societies in history, looking for social mobility within them. He stated that immigrants brought their social structures with them.

http://www.abbeyclock.com/cecil/index.html

This last statement about the inability of even immigrants to rise above their incoming caste or class in American society tells me that something is wrong with the melting pot and the problem is partially due to bad economic-social engineering by focusing only on greed to the top.

THE CRISIS OF THE SHOCK DOCTRINE & Main Street USA

First, the monetarist advocates and later the neo-classical schools had dominated business and political news publications and the framing of life and business in the market place. This helped increase stratification of wealth—as even CEO mentality has taken over our schools, especially the new charter schools.

http://eslkevin.wordpress.com/2010/09/06/one-of-the-top-educator%e2%80%99s-interview-of-the-decade/

This topic of the “Shock Doctrine as used in American Education” was discussed last week in an interview on the topic of “Educators push back on Obama’s Business Model of Education” on Democracy Now.

http://www.democracynow.org/2010/9/3/educators_push_back_against_obamas_business

The interviewer asked one of the teachers, “ But now, what’s wrong? The supporters of Arne Duncan, superintendents like Michelle Rhee in Washington, DC, Joel Klein in New York City, and others around the country, are saying, what’s wrong with having higher accountability standards for teachers? What’s wrong with encouraging experimentation and entrepreneurship, in terms of how you deliver public education to the millions of children who so far have not been served by the public education system? So what’s wrong with that?”

One of the educators retorted, “Well, the problem is that the whole idea of the business model doesn’t work in education. In the business model, you can select how you want to do something. You have an opportunity to innovate in a way that discriminates. It’s very easy to do. Whereas in a public school system, where we do not select our children—we take whoever comes to the door—what we need is actually more resources and more support for the people that are there and the work that’s being done. However, again, Arne Duncan, Michelle Rhee, Joel Klein—I don’t know about Joel Klein—none of these people are superintendents. You have to have, again, credentials for that. These are business folks. Look, the business model took this country to the brink of Armageddon in 2008. And yet, we want to follow a failed business model and imprint that on top of public education? No. And these things are not innovative. What they are is they’re terrorism. They’re “my way or the highway.” And they’re still not producing, quote-unquote, ‘results.’”

In short, in America, the teacher states,“Nobody disagrees with accountability. That’s not the issue. The issue is, what do you use? We still know that high-stakes testing basically tell us more about a student’s socioeconomic status than it does anything else. And until we’re honest about that and want to deal with the fact that we have neighborhoods in our cities and across the nation that have been under-resourced, have been devalued for decades, and for some reason or other, the schools are supposed to fix all that and change that.”

Just as bad social scientists have historically misused or poorly used statistical analysis to support bad think tank desires, schools are being forced to help keep the society stratified by using bad tests.

By the 1970s and 1980s, through the popularization of monetarism and neo-classicalism in media, in government, in schools and in universities, Keynesianism was a dirty word in political administration circles around the globe as well. All of these Chicago-style schools of research were funded by big business and wealthy estates.

At this same time, the Republican and Conservative juggernaut of policy think tanks were being established across America and quietly co-opting college students across America to side and believe in the greed-is-best mentality, i.e. which would open the door to cowboy capitalism—as not seen since the 1890s when robber barons ran the roosts in American capitalism and society.

By the way, “Robber baron is a pejorative term revived in the 19th century United States for businessmen and bankers who dominated respective industries and amassed huge personal fortunes, typically by anti-competitive or unfair business practices. The term may now relate to any businessman or banker who used questionable business practices to become powerful or wealthy.”

NOTE: Robber Baron was originally used in Germany on the Rhine River in the middle ages to describe the different toll-taking kingdoms on that river. This is one reason today that during a Rhine River cruise one can see so many castles and fortresses still scattered across the landscape on both banks—and even on islets in the middle of the Rhine.

Now, America (and the world) quite a number of banks, law firms, real estate bosses, investors, and conglomerates today who fit the term Robber Baron, don’t we? Meanwhile, many Americans are forced to work for low pay at Walmart because these Robber Barrons have hollowed out the American business and socio-economic landscapes.

If we look at humongous wealth now concentrated in hands of neo-liberal organizations, like the Bill and Melinda Gates Foundation, or in the hands of companies, e.g. Google, we see that the idea of Robber Baron’s effect on our society and culture are vast. (Did you see the latest agreements to try and create a stratified access to the internet in America? Google was supportive. Meanwhile, Bill and Melinda Gates are heavily funding the new Washington initiatives for our nation’s schools.)

It took the catastrophe of eight years of neo-con capitalism under the W. Bush administration (preceded by many years of neo-liberalism under Clinton and neo-con predecessors) to begin to wake Americans up to the evils of stratification. Now, authors like Naomi Klein, author of THE SHOCK DOCTRINE, are mainstream. This is a good mental shift in America, but the trend and awareness needs to continue.

http://www.pbs.org/moyers/journal/02082008/profile.html

Let me share a bit about the “shock doctrine” topic and its needed rise and acceptance in the American cultural and educational landscape. In recent months, I have heard various educators or teachers in America citing Klein’s model or thesis for the need to end the increasing stratification of the American society.For example, Lois Weiner, a professor of education in New Jersey who was invited to speak on the topic of the federal government and think tank project called RACE TO THE TOP, stated on Democracy Now this past week, “I think it’s important to understand that Race to the Top is not unique to the United States, and what Arne Duncan [current head of the US Department of Education, who used to head the schools of Chicago] did in Chicago is not unique to Chicago. And in fact, the contours of this program were carried out first under Pinochet in Chile. And this program was implemented by force of military dictatorships and the World Bank and the International Monetary Fund in Latin America. And the results have been verified by researchers there.”

Weiner continued, “They [Projects similar to Race for the Top or No-Child-Left-Behind] produced increased stratification. So I think what we’re seeing right now are the results of that increased stratification, a stratification, inequality of results, because if you think about it, No Child Left Behind is almost a decade old. And what are the results? The results are a growing gap between poor minority—achievement of poor minority kids and those kids who come from prosperous families who are—who live in affluent suburbs and in those suburban schools.”

Actually, the stratification started in the 1960s and 1970s as monetarist policies were in full swing in the USA.

Weiner added, “And I think it’s also very important to understand that this focus on educational reform is replacing, is a substitute for, a jobs policy. We need to understand that. Education can democratize the competition for the existing jobs, but it cannot create new jobs. And when most jobs that are being created are by companies like Wal-Mart, education cannot do anything about that. So, we need to—we really need to look critically at Race to the Top and understand the way that it fits into this new economic order of a so-called jobless recovery and that what’s really going on is a vocationalization of education, a watering down of curriculum for most kids, so that they’re going to take jobs that require only a seventh or an eighth grade education, because those are the jobs that are being created in this economy.

And so, I think that while we—while it’s important to look at the particulars of each state and each city, each school district, it’s also important to see this large picture, because almost anything that you can point to me that’s being done in Chicago or New York or San Francisco, we can find another place in the world that it was already done, and we can look at those results. And the results are not good.”

http://www.democracynow.org/2010/9/3/educators_push_back_against_obamas_business

Many other rank-and-file Americans are now in tune with what Klein has said and written. They agree that in “THE SHOCK DOCTRINE, Naomi Klein explodes the myth that the global free market triumphed democratically. Exposing the thinking, the money trail and the puppet strings behind the world-changing crises and wars of the last four decades, The Shock Doctrine is the gripping story of how America’s “free market” policies have come to dominate the world– through the exploitation of disaster-shocked people and countries.”

Americans have been aware that something was wrong but few had a model to describe the Leviathan that had been crusshing upward-mobility in America and stratifying the landscape for so long.

A blurb on the official home page for the Klein’s book, THE SHOCK DOCTRINE, explains “the pattern she [Naomi Klein] exposes [which] could govern our future as well, The Shock Doctrine could turn out to be among the most important books of the decade.” In as nutshell, the pattern has been something to be called “disaster capitalism”. However, the basic analytical for model came from non-mainstream developmental models of economics and neo-Marxian theory years ago.

“Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine . . . shows how disaster capitalism – the rapid-fire corporate reengineering of societies still reeling from shock – did not begin with September 11, 2001. The book traces its origins back fifty years, to the University of Chicago under Milton Friedman, which produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today. New, surprising connections are drawn between economic policy, ‘shock and awe’ warfare and covert CIA-funded experiments in electroshock and sensory deprivation in the 1950s, research that helped write the torture manuals used today in Guantanamo Bay.”

The book, THE SHOCK DOCTRINE, was published before the Katrina Disaster but does pretty well describe Katrina’s aftermath and how the government political wonks proceeded. THE SHOCK DOCTRINE book does tell the story of “the application of these [shock doctrine] ideas through our contemporary history, showing in riveting detail how well-known events of the recent past have been deliberate, active theatres for the shock doctrine, among them: Pinochet’s coup in Chile in 1973, the Falklands War in 1982, the Tiananmen Square Massacre in 1989, the collapse of the Soviet Union in 1991, the Asian Financial crisis in 1997 and Hurricane Mitch in 1998.”

MAINSTREAM NOVELIST: John Grisham

Now, in no way do I wish to insinuate that John Grisham–possibly the most popular author of our era–is enamored with the Shock Doctrine model for its ability to describe how America and its economy function, but I have been noticing a great trend in his works that shows he is attacking the systems-as-are in America: Grisham is both directly and indirectly attacking the justice system, judges, politics, the economy, corporations, the banking system, the training system for lawyers, the federal government, and local traditions. In short, he is both an interesting writer, a great story teller, and a social critique. He also takes time to promote or preach more just, fair, humane and important priorities for individual and societal renewal.

http://www.pbs.org/moyers/journal/01252008/grishamwriting.html

In THE APPEAL, Grisham showed how conservatives, corporations and others have bought up judgeships left-and-right across America. Some things in the novel, the Appeal, are extremely similar to what we saw in the wake of the “Deep Sea Horizon” debacle of this past summer, whereby a Louisiana judge tried to turn over a temporary moratorium on new drillings in the Gulf of Mexico. Grisham shows how such judgeships have been put in position to help oil companies, etc. sometimes decades ago already.

http://www.jgrisham.com/the-appeal/

Moreover, according to Janet Maslin, who reviewed the work for the NY TIMES, “’The Appeal’ is John Grisham’s handy primer on a timely subject: how to rig an election. Blow by blow, this not-very-fictitious-sounding novel depicts the tactics by which political candidates either can be propelled or ambushed and their campaigns can be subverted. Since so much of what happens here involves legal maneuvering in Mississippi, as have many of his other books, Mr. Grisham knows just how these games are played. He has sadly little trouble making such dirty tricks sound real.”

In short, this, THE APPEAL, is a sort of modern America fiction which everyone can almost read as non-fiction. Thank you, corporate think-tanks, lobbyists, government, and courtrooms of America!

Likewise, in his book on corporate espionage, THE ASSOCIATE, Grisham shows us an economy and business world that is just plain out of synch with what America needs in this decade.

http://www.jgrisham.com/the-associate/

Interestingly, besides being about espionage and white collar crime or corporate spy operations dealing with America’s defense contracts, the novel, THE ASSOCIATE, has a lot to say about law firms and corporate clients, e.g. what they consider is normal. (What corporate America considers normal, most of us would consider a crime.)

One reviewer explains, “Grisham’s cynicism about Wall Street law firms has become even more extreme than it was 18 years ago. Partners at his fictitious Scully & Pershing think nothing of asking associates to ‘estimate’ the hours the partner might have spent working on a client’s affairs over the previous month. ‘It’s no big deal,’ the partner maintains. ‘At $800 an hour,’Grisham editorializes, ‘it was indeed a big deal.’”

In short, as the reviewer for THE GUARDIAN, Joshua Rozenberg notes, Grisham is not afraid of editorializing about the status-quo in the USA. Rozenberg goes on to ask, “How much of this was going on, even a couple of years ago? [i.e. prior to the booms of the late-1990s and mid-2000s?] The law firms stoutly deny it, but Grisham’s great rival Scott Turow, who still practices as a lawyer, has attacked the hourly billing system in an essay published by the American Bar Association journal. ‘Who among us,’ he asked, ‘can say he has never accused the lawyer on the other side of ‘running the meter’ – of doing unnecessary discovery, filing frivolous motions or foot-dragging before engaging in meaningful settlement talks – all to pad the fee?’”

However, Grisham does not just attack the status-quo for big law firms in America in terms of billings, he attacks the budgeting department at humongous corporations and how they think about using, counting or allocating their budgets. In THE ASSOCIATE, Grisham goes after one of North America’s biggest and powerful (fictional?) banks: Ontario Bank.

Prior to this dialogue, the main character, named Kyle, has just passed his bar exam for the State of New York and is meeting with his supervisor, named Doug, at lunch. There, the news secrets on client-billing (and how clients, like major banks, think) are shared with the neophyte lawyer, Kyle. The conversation goes like this:

Doug says: And since we are now talking about Ontario Bank…bill ‘em for this lunch.”[i.e. at 800 dollars an hour for him and 400 dollars an hour for Kyle]



Kyle replies: “I was planning on getting the check.”



Doug responds: “Of course not. I’ll put it on a credit card and bill the bank. I’m talking about our time. Two hours for you, now at four hundred

and two for me. The bank had record earnings last year.”

Next, Doug notes: “[Y]ou are entitled to use the black cars and bill clients for dinner. The rule goes like this: If you work until eight o’clock at night, then call a car. I’ll give you the number and code, and be sure the client gets billed for the car. And if you choose, you can go to a restaurant, spend no more than a hundred bucks on yourself, and also bill the client.”

Kyle, who lives in walking distance from the office, replies: “You gotta be kidding….[b]ecause if somebody else is buying dinner, then I’ll be damned sure I stay until eight.”

Doug nods: “Attaboy.”

A few moments later, Doug explains to Kyle how modern budgeting works at banks (and companies with billions of dollars0 these days.

Doug states unequivocally: “Kyle, my boy, look at it this way. Our biggest client is BXL, the seventh-largest company in the world, sales last year of $200 billion. Very smart businessmen who have a budget for everything. They live by budgets. They are fanatics about budgets. Last year their budget for legal fees was one percent of their total sales, or about $2 billion. We didn’t get all of that, because they use twenty different law firms around the world, but we got our share. Guess what happens if they don’t spend the amount they budget, if their legal fees fall short? Tehir in-house lawyers monitor our billings, and if our numbers are low, they call up and raise hell. What are we, the lawyers doing wrong? Aren’t we properly protecting them? The point is, they expect to spend the money. If we don’t take it, then it screws up their budgets, they get worried, and maybe they start looking for another firm, one that will work harder at billing them. You follow?”

Kyle nods: “Yes.”



In concluding, I will note that some years ago, Amy Goodman of Democracy Now, indicated in one of her articles that the unveiling of the Pentagon Papers in the 1960s sounded like a John Grisham novel. I think this reveals that many parts of John Grisham’s book read like modern American non-fiction.

http://www.seattlepi.com/opinion/321502_amy28.html

Daniel Ellsburg has stated this in most of his speeches all over the United States over recent decades: “The equivalent of the Pentagon Papers exist in safes all over Washington, not only in the Pentagon, but in the CIA, the State Department and elsewhere. My message is to them: Take the risk, reveal the truth under the lies of your own bosses and your superiors, obey your oath to the Constitution, which every one of those officials took, not to the commander in chief, but to the Constitution of the United States.”