What Is Sexual Harassment and What Should Herman Cain Do Now

I feel uneasy about Herman Cain right now. It has nothing to do with thinking he ought to step aside because of his past acts, because I don’t know what those acts were, or if they occurred, or whether they would have constituted sexual harassment in a US federal court in the 1990s.

What I feel uneasy about is his reactions and seeming inability to get past the story. He’s got to get out in front and tell his side, without dodging or omitting facts. If Cain doesn’t, somebody else will certainly dig them up and publish them anyway.

But, I don’t think Cain’s position can be compared to the Clarence Thomas situation, because Thomas admitted that the affair had taken place. And, most important, Thomas was not running for president. The Supreme Court is not in the same league as the presidency in handling crises, because the Court does not have crises that can be compared to those that a President has to face rather routinely.

However, the Cain situation is a lot like Clinton’s affair with Monica Lewinsky because Clinton denied, denied and denied, right up until the moment when he was trapped and had to retract his lies and tell the truth. Even then, his version seemed to be rather lightweight compared to the facts presented by Lewinsky. But don’t hold your breath till the media jumps on the Clinton story for comparisons. James Carville, the Democrat political counsel, was smug on CNN’s Anderson Cooper this week, saying, about who squealed on Cain, “…of course it was Perry. Who else had anything to do with it, especially since Cain is Romney’s stalking horse.” There’s a piece of real news, if it’s true.

Just what is sexual harassment? Well, it is probably not well understood by most of the media who are filling their programs with it right now.

Title VII of the 1964 Civil Rights Act contains broad prohibitions against sex discrimination, and originally covered employment discrimination based on race, color, national origin, religion, age, and disability. Title VII followed the Equal Pay Act of 1963, which protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination.

In 1972, Congress passed the Equal Employment Opportunity Act which created the Equal Employment Opportunity Commission (EEOC) and empowered it to enforce Title VII of the Civil Rights Act of 1964. The EEOC created regulations defining and prohibiting sexual harassment as a form of sex discrimination.

In the late 1970s courts began holding that sexual harassment is prohibited under the Act. In 1986 the Supreme Court held in Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986), that sexual harassment is sex discrimination and is prohibited by Title VII.

After being fired from her job at a Meritor Savings Bank, Mechelle Vinson sued Sidney Taylor, the Vice President of the bank. Vinson charged that Taylor had coerced her to have sexual relations with him and made demands for sexual favors while at work. Vinson stated that she had intercourse with Taylor 40 or 50 times. Additionally she testified that Taylor had touched her in public, exposed himself to her, and forcibly raped her multiple times. She argued such harassment created a hostile working environment and a form of unlawful discrimination under Title VII of the Civil Rights Act of 1964. Vinson sought injunctive relief along with compensatory and punitive damages against Taylor and the bank. The Court held that Title VII was "not limited to 'economic' or 'tangible' discrimination," finding that the intention of Congress was "'to strike at the entire spectrum of disparate treatment of men and women' in employment. . ." The Court pointed out that guidelines issued by the EEOC specified that sexual harassment leading to non-economic injury was a form of sex discrimination prohibited by Title VII. The Court recognized that plaintiffs could establish violations of the Act "by proving that discrimination based on sex has created a hostile or abusive work environment."

A review of court decisions after the Meritor case shows that the determination of what constitutes "severe or pervasive conduct" is always based on an examination of the totality of circumstances. In gauging the totality of circumstances, courts focus on some or all of four factors: 1) the level of offensiveness of the acts or words; 2) the frequency or pervasiveness of the offensive encounters; 3) the total length of time over which the encounters occurred; and 4) the context in which the harassing conduct occurred.  

Today, sexual harassment in the workplace occurs when an employer subjects an employee to unwelcome verbal, nonverbal, or physical conduct of a sexual nature that affects the employee's employment, interferes with the employee's work performance, or creates a hostile work environment. Both men and women are protected from sexual harassment in the workplace.

Two types of sexual harassment are covered by EEOC regulations. The first type is Quid Pro Quo Sexual Harassment in which an employee is hired, maintained, fired or promoted based on his or her willingness to perform sexual acts or favors. The second type is Hostile Workplace Harassment in which unwelcome verbal or physical conduct of a sexual nature unreasonably interferes with an employee's work performance or creates an intimidating, hostile or offensive working environment.

There you have, dear readers a thumbnail sketch of US sexual harassment law.

Did Herman Cain sexually harass anyone? We simply do not know because we do not have the facts needed to judge.

But, we do know several things. The women were paid rather small settlements, which could be compared to nuisance tort settlements. They are unwilling to make public statements, but want to rely on written ones read by their lawyers. This could be to preserve their privacy but it could also be to prevent the impression that the harassment was minimal, if indeed it occurred in the legal sense of the term. The last thing we know is that there were no trials, and so we cannot base our evaluation on the decision of a court that would have heard and evaluated all evidence. But, keep in mind, that the law is a changing process, and what is considered sexual harassment in 2011 may not have been sexual harassment in the mid-1990s.

This makes it all the more important for Herman Cain to tell all, and get it out of the way so he can go back to being a presidential candidate.

 

Are the Greek and Eurozone Problems Resolved, Not Likely

This has been a wild day for both politicians and financial markets. First, there was going to be a Greek referendum on the offered Eurozone bailout package, and that shook the world markets like they were in a blender.

Then, there were French President Sarkozy and German Chancellor Merkel telling the world that they had been duped by Greek Prime Minister Papandreou and weren’t going to take it lying down. So, they stopped all payments to Greece and said there would be no more money till Papandreou explained himself at the G20 meeting now going on in Cannes, France.

Then, the Greek government met and decided that maybe it would be better to form a coalition government instead of having a referendum. After all, said Papandreou, he called for a referendum because the opposition parties were blocking his attempts to get on with accepting the bailout package.

Then, Papandreou went to Cannes and met with Sarkozy, who apparently told him to get his act together or face the wrath of all of Europe, and perhaps of President Obama, who had arrived, congratulated Sarkozy on his wife’s new baby girl, and then made the startling statement that there was still a lot of work to do to save the Eurozone. Obama must have been on Mars for that past month, or he would have realized how redundant and sophomoric his remarks were.

So, as of this evening, where are we? No referendum. Interim funds will apparently be paid to Greece so it can continue to pay its bills (pensions, debt interest payments, etc) until the final bailout is in place. Sarkozy and Merkel will sheathe their swords, and Papandreou can once again sit at the G20 table.

But, what really can the world expect? Nobody is very confident about the Eurozone’s ability to last much longer in its present form because Greece still is not generating enough money to live on its own (like the kids who have summer jobs but look to Mom and Pop to pay their university costs). And, Italy still has a problem selling its bonds for less that 6.3%, and that is not sustainable over the longer haul.  

My expectations?

- Greece will default and leave the single currency Eurozone, leaving Germany and France to clean up the Eurozone and put it back into working order.

- The banks who were fleeced by lending Greece money will recapitalize by selling stock and bonds, and that will suck the money out of the Eurozone economy that is desperately needed for public and private borrowers if Europe is to begin to grow instead of sitting in stagnation.

- Italian bond yields will continue to rise and early in 2012 we will be playing the Greek game with a new main character - Italy.  

- France will lose its AAA government debt rating, making it impossible to borrow at its current low interest rates and Germany will be even more alone in shouldering the burden of keeping the Eurozone afloat.

- The European Financial Security Facility that is supposed to be put into place to make further sovereign debt failures impossible will either never happen or will not be able to raise sufficient funds to be meaningful as a backstop.  

-  Germany will finally say ‘no’ to further financial support for the less well managed Eurozone countries and pull out its old and solid Deutsche Mark, exiting the Eurozone.

- The European single currency, the Euro, dies and everyone in the world - China, America, Brazil, Britain, Europe, Russia - will fall on hard times as they bail out the world’s financial system, once pretty well managed but in tatters now.

That’s a high price to pay for a single currency that all non-Eurozone financial experts said at the outset would not and could not work.

The only other solution might be for Europe to come to its senses, toss Greece out of the Eurozone and help it get back on its feet, and then re-create the Euro single currency to eliminate countries that cannot afford it (Italy, Spain, Portugal, Ireland), and make those countries which are left toe the line by agreeing to a single financial system to go along with the single currency. But, that idea was roundly rejected when the Euro was created because no European country wants to give up its control over its own treasury, and with a lot of reason, I’d say. So, what chance does it have now? Your guess is as good as mine, but I’d say little to none.  

The not so shiny “outsider-come-to-Washington-to reform-it” armor of President Obama

The Daily Caller published an article by C.J. Ciaramella today. It’s about Jon Corzine, former Goldman Sachs chairman who became Democratic Governor of New Jersey and went back to Wall Street after Republican Chris Christie became New Jersey governor.

The firm Corzine headed in New York, which he wanted to turn into another Goldman Sachs, filed for bankruptcy this week, mostly because it took the considerable risk of buying heavily into Eurozone bonds (Greek, Italian, etc, which as we know are falling through the floor these days).  The losses were so great that the firm went belly up. But, Corzine seems set to pocket a $12 Million severance package.

That’s not such an unusual thing, except that Jon Corzine is a great friend and supporter of President Obama, indeed, one of Obama’s keys for tapping into Wall Street. He co-hosted an Obama fundraiser at his home in April where tickets cost $35,800. Overall, Corzine has raised more than $500,000 for Obama’s re-election campaign.

Concerning Corzine’s severance package , aka golden parachute, Ciaramella reports the president’s own words:

• “First of all, I’m going to have a lot to say about this guy, but I just want everybody to know that one of my earliest supporters, somebody who had faith and confidence in me before I was a United States senator was the man standing next to me right here — Jon Corzine,” Obama said.
• “I’m among a lot of friends and I, first of all, obviously want to thank Jon and Sharon for hosting us in this extraordinary venue,” Obama said. “These guys have been just great friends from the start. Some of you know that Jon was a big supporter of mine in my first U.S. Senate race when nobody could pronounce my name.”
• “And Jon Corzine wasn’t just the first governor to pass an economic recovery plan for his state; he was an ally in helping the federal government, my administration, develop the national recovery plan,” Obama said.

Ciaramella goes on to say that in a 2008 campaign ad, Obama attacked John McCain for his ties to campaign adviser and former Hewlett Packard CEO Carly Fiorina, who was paid a little more than $20 million in severance.

“You’ve got corporate executives who are giving themselves million dollar golden parachutes and leaving workers high and dry,” Obama said in the 2008 ad. “That’s wrong. It’s an outrage.”

After being elected, Obama promised in 2009 to take “the air out of golden parachutes” by capping at $500,000 executive pay of companies receiving federal bailout money.

So, we have just another little scratch in the shiny “outsider-come-to-Washington-to reform-it” armor of President Obama.

Will Obama demand that Corzine forego his golden parachute? Not likely. But, as is the case in politics, Corzine may find that the White House direct line has suddenly disappeared because, in addition to the MF Global bankruptcy, the firm is also being investigated by the Securities and Exchange Commission and the FBI for misplacing hundreds of millions of dollars in customer money.

That, dear readers, is my tale of the day. Do not believe anything you hear, and only half of what you read, especially when it’s coming from political animals.

 

 PS: Many thanks to the reader who sent me a comment about yesterday's blog on Greece. I wish the very best of luck to her and all those who are fighting to save freedom and liberty for all of us. To join as a follower, I believe you should click on the follower box and enter your coordinates. But, sometimes the support of Blogger.com is a little weak, so if that doesn't work, let me know and I'll try to help.

Why You Should Pay Attention to What's Going on in Greece

The French and all European media today are full of the mess that is called the Greek crisis.

You should be paying attention, no matter where you live or work or keep your savings, because what is now unfolding in the Eurozone countries will impact the world, and no one will be spared some of the pain.

Last weekend, the European Union leadership thought it had made a deal with Greece to try to save it from sovereign debt collapse - that is, the Greek government has no money, has very reduced means of obtaining it from its taxpayers who are being forced to work reduced hours, or cannot find jobs at all (about 20% of them now), and who have had their tax burden raised significantly because of the fewer Greeks able or willing to pay taxes. And no international banks or private investors are willing to lend to Greece.

So, the Eurozone, those countries using the Euro as currency, cobbled together a plan to “save” Greece. The plan involved Greece foisting yet more austerity on its already-beaten population, along with banks who had lent to Greece undergoing the haircuts we discussed last week, to the tune of 50% losses. To make sure this would not damage the banks’ ability to continue as viable institutions (i.e., not becoming a whole world full of Lehman Brothers without money to do any of the things banks do routinely), the Eurozone told its banks to “recapitalize.” What the EU want is for banks to voluntarily take a 50% loss on their Greek loans and then go out into the capital markets to borrow in order to make up for their losses, which may amount to several hundred billion Euros.

The rest of the European Union is not directly affected, but they will be slammed, too, if their banks find that their loans to Greece, because they also bought Greek government bonds, are worthless. This also applies to American and other banks which lent to Greece.

Greece, in the person of its prime minister, Georges Papandreou, agreed to it all last weekend in Brussels. But, once back in Athens, he had second thoughts. Some European commentators are suggesting that he finally woke up to the fact that : (1) the Greek citizenry will not agree and there will be more riots and protests, (2) the country will fail anyway because of the draconian austerity program foisted on it by its EU brothers and sisters, and (3) when all this occurs, he, Papandreou, will go down in history as the politician who ruined Greece, caused its people to suffer more than ever before in modern history, and perhaps become the person who brought down the Euro itself.

That is the background of Papandreou’s decision last night to let the Greek people decide for themselves if they want to undertake this latest austerity program. He called for a national referendum - a simple yes or no - on all he had agreed to.

Here are a few of the reactions today in Europe :

“The Greek referendum project is anything but a gift,” said the German Federation of Private Banks and several German ministers.

“George Papandreou carries a very heavy responsibility in calling for a referendum,” according to the Belgian prime minister.

“It is impossible to see how the decisions of the EU last weekend can be carried out if we are to have a Greek referendum,” said the large French bank BNP-Paribas.

Another large French bank agreed, saying, “this referendum opens a Pandora’s Box concerning just how much loss the banks which lent to Greece will have to take, perhaps 100%.”

Not a pretty picture, and the stock and bond markets of the world reacted almost in unison today - by falling fast and far.

Italy’s stock market is down almost 7%, Germany’s and France’s almost 5%, Britain’s and Switzerland’s 3%. Asian and American markets took similar hits in the 2% range.

The bond markets rose, because investors were looking for somewhere safe to put their money - safe from the Greek contagion, as it is more and more being called.

And, the US Dollar rose more than 1.3% against the Euro, while the Euro also lost ground to the Yen and the Pound Sterling.

This highlights the real problem. If Greece goes bankrupt, which almost everyone in the financial world now expects, it could very well bring down the Euro as a currency.

“A ‘no’ in the Greek referendum in January menaces the viability of the Eurozone with the real possibility of a Greek bankruptcy, and this could well force the collapse of the Euro,” were the words of the Fitch Ratings agency.

Why is everyone so worried about a country as small as Greece?

Because if the Greeks vote ‘no’ to the austerity program, then it is probable that international lenders (such as the IMF, the Chinese, the European Central bank), will simply turn off the spigot. No more money to allow Greece to pay its current debts - because keep in mind that without these infusions of cash, Greece would already be bankrupt. And, if Greece goes into bankruptcy, it will leave the Eurozone. And, how will that mess be resolved? Nobody knows. But, there are recurrent rumors in Europe that Germany is already printing Deutsche Marks just in case it needs to revert to its pre-Euro currency quickly.

Today, Italian 10-year bonds rose above 6% - remember that most 10-year government bonds trade at about 1.9 - 2.1%. The European Central Bank was buying Italian bonds today in an effort to stop the bleeding by lowering the cost of Italy’s borrowing to below 6%. Are we seeing the beginning of the collapse of the Italian governments’ debt system, too? Could be, and Spain is waiting in the wings. And, for these two sovereign debt problems, there is not enough available money in the world to fashion a real bailout.

Unless we want to talk about the kind of hyper-inflation that brought Germany to its knees before WWII and made it easier for Hitler to come to power. For Europeans, who have had the first half-century of peace in their entire history in the period since the Second World War, the spectre of division, war and civil collapse is far more real than it is for the rest of the world.