It is not widely known that David Koch was the Libertarian Party vice-presidential candidate in 1980. He believed that Ronald Reagan was much too liberal. Despite Mr. Koch putting a substantial sum of money into the campaign, his ticket only received 1 percent of the vote. Most Americans thought the Libertarian Party platform of 1980 was extremist and way out of touch with what the American people wanted and needed.
There has been much written recently about Herbalife and allegations about whether it is a pyramid scheme or a legitimate business. While most of the focus has been a battle between hedge fund titans, what is often overlooked is its actual impact on the low income, often minority, individuals who are lured into “the business opportunity.” However this is beginning to change. In particular, there have been many Latino leaders who have become increasingly concerned with Herbalife’s predatory business practices and how the company targets the Latino community in a methodical and calculated manner.
If Herbalife is profitable, why should anyone be concerned? What does it matter if the company is a pyramid scheme, some wonder, so long stock price keeps going up? Aside from the fact that pyramid schemes are illegal, the real problem with a pyramid scheme like Herbalife is that the company’s profits are generated by committing massive fraud against the company’s own distributors.
Herbalife’s business model is far different than every other legitimate business in America because at Herbalife, a distributor’s compensation is driven not by how much product they sell to retail consumers, but on how successful they are in recruiting other distributors into the “business opportunity”. The vast majority of income generated by the company is from the products purchased by new distributors duped into buy their way into the business.
I have spoken to many of Herbalife’s Latino distributors, both at the company’s recent “Extravaganza Latina” held in Los Angeles for thousands of their Latino distributors, as well as in the Latino neighborhoods that the company’s 550,000 U.S. distributors have saturated. And the stories they told me present a truly alarming picture.
The distributors are trained about how to tell a-rags-to-riches story such as “I used to wash dishes for minimum wage and now I sell Herbalife and make $150,000 per year, drive a luxury car, and live in a fabulous mansion.” If a distributor is not yet a success they are told that they need to “fake it, until you make it” — a favorite saying of Herbalife’s founder Mark Hughes.
According to the distributors and former distributors that I have spoken to, most lose between $1,000 and $10,000 with the average distributor losing $3,000. Some have lost much more and these figures do not count the hours they spend trying to sell the product and recruit new distributors and the expenses they incur beyond purchasing Herbalife’s product.
The scale of the scheme is breath-taking. There are 550,000 Herbalife distributors in the United States. Somewhere between 60 to 83 percent of them are Latino. 300,000 to 400,000 Latino distributors will quit this year alone only to be replaced by another 300,000 to 400,000 new Latino distributors.
“It just doesn’t seem possible that an inmate could live for a decade and a half in a completely dehumanizing environment in which violent felons were constantly on the verge of attacking or even killing him and not emerge an emotionally stable, productive member of society,” said chief warden Albert Gunderson
WOW did you see Obama’s Bracket?? This is gonna be bad