12/30/08
The big news flash today (This is being written before Governor Blagojevich’s press conference; who knows what Governor Goofy will really say?) is that Blago is going to appoint Roland Burris to Barack Obama’s senate seat. The national media, showing their characteristic ignorance of Chicago politics, is opining that this is a plausible, perhaps even a brilliant move. I say “Balderdash!” It isn’t going to happen. Well, it might happen in the sense that Blago may appoint Burris (perhaps following the admonition that it never hurts to make your enemy suspect you are a little nuts, perhaps because Blago genuinely is nuts), but Roland Burris will never sit in the U.S. Senate. Why?
First, one of the arguments being employed to advance the notion that this is a brilliant political move on Blago’s part is that, by appointing the next Senator from Illinois, the Governor removes one element of pressure on the politicians in this state to remove him from office: the urgency to get him out of office before he can name the President-elect’s replacement. But what the national media don’t seem to know is that the political power structure in this state wanted to get rid of Governor Goofy long before the latest titillating revelations came to the forefront. Impeachment has been seriously discussed for at least the last year. Now the Governor’s, er, impetuousness has presented a golden opportunity to finally get rid of this silly person. Mike Madigan and his cohorts are not going to let this opportunity slip through their fingers. They want to keep the pressure on; therefore, any move to mitigate this pressure will be fiercely resisted by the people who matter in Illinois.
Second, one of the reasons, besides the obvious, that the politicians in Illinois, and especially Mike Madigan and Pat Quinn, want to dump Blago is that the deal has already been cut: Pat Quinn becomes governor, as the state’s Constitution stipulates, and he appoints Lisa Madigan to the Senate seat (perhaps pending a special election, but whether Lisa is appointed until the next scheduled election (2012) or pending a special election makes little difference. In a special election, she will be running as an incumbent with the backing of the Democratic Machine against a flaccid (okay, dead) Republican Party in Illinois. The job will be hers as long as she wants it.). This puts a reformer, but a reformer who wasn’t born yesterday, in the governor’s office, satisfies Lisa Madigan’s ambition to move up (though perhaps not to the office she wanted, but she is young and there is plenty of time for her to become governor if she still harbors that ambition after enjoying the perks of a Senate seat for a few years.), and makes House Speaker Mike Madigan happy, thus insuring that things go much more smoothly for Governor Quinn (I like the sound of that, don’t you?) than they did for Governor Blagojevich, at least in the short run. The only thing standing in the way of this deal, which is as classically Chicago as our hot dogs and Old Style, is Blago’s sticking around like Banquo’s ghost.
How do I know the aforementioned deal has been cut? I don’t know any more than I read in the papers, but I know a little about the politics of my home town from having followed it the last, oh, 45 years or so.
Third, the U.S. Senate will not seat Roland Burris or anyone whom Blago appoints. Harry Reid has already said so and, while I am not naïve, don’t think he will go back on his pledge despite his desire to get a 59th Senate seat (58th if Al Franken loses in Minnesota). First, it would look really bad at the dawn of a new Congress. Second, the seat is going to be filled by a Democrat no matter what happens; it’s just a matter of time. Third, and more importantly, anyone who thinks that Illinois Democrats do not have enormous clout in Democratic politics at the national level is incredibly naïve. For the reasons outlined above, the local guys will make their desires sufficiently clear to the national guys, and the national guys will listen.
And another thing….
At the expense of being redundant, the national press really does know nothing about Chicago politics. Why else would we be subjected to the hagiography that constitutes reporting on Mr. Burris’s background? We are told that Mr. Burris is such a stellar citizen that the Senate will have no choice but to seat him. Roland Burris? A knight in shining armor? C’mon! Roland is a nice enough guy, and his wife is a genuinely wonderful person. But he is little more than a garden variety Chicago politician. He was comptroller of the state of Illinois for three terms and Attorney General for one term (both offices he obtained with generous and fulsome Machine backing) and has been desperate to be governor (or mayor or senator, but primarily governor) ever since. His political life for at least the last twenty years has best been characterized by his frustration at never having become governor (This I do know, or at least strongly suspect, from personal experience.). It is even speculated that he was run by the Machine (probably unwittingly, on Burris’s part) in the 2002 gubernatorial primary in order to siphon Black votes away from Paul Vallas (Mr. Vallas, after a very successful stint as Chicago schools boss was extremely popular in many quarters, but especially among Black voters who were the primary beneficiaries of his largely successful efforts to turn around the Chicago public school system.) and insure the nomination of Rod Blagojevich, who enjoyed Machine support in his first run for governor largely due the patronage of his father-in-law, 33rd alderman and ward committeeman Dick Mell, and Blago’s willingness to carry Machine water in Washington as the Congressman from the Fifth District.
There’s nothing wrong with being a Chicago politician, and Roland Burris has been a mildly successful one, though it would be hard to convince Roland of the latter. But before the national media makes Burris a crusader on a white horse for all that is good and pure, perhaps they’d better do their homework regarding the inner workings of politics in the nation’s greatest city. Oh, I forgot…that would involve living here, a horrifying prospect for the New York and Washington based national media.
Tuesday, December 30, 2008
Thursday, December 18, 2008
“SIR, YOU DESERVE THIS CAR…”
12/18/08
The vestigial appendage known as the Republican Party in Illinois is currently running an ad urging its listeners to challenge the constitution of our state and urge their lawmakers to call a special election to fill Barack Obama’s U.S. Senate seat, the seat that our esteemed governor unsuccessfully attempted to peddle to a rather considerable group of interested parties.
The ad that the GOP is currently running tells us that the people of Illinois “deserve” better than they have been getting from their politicians (the currently second most prominent of whom is none other than that grand Pooh-Bah of the Illinois Republican Party, George Ryan, but somehow that is not at all implied in the ad), that they “deserve” a special election to fill Mr. Obama’s vacant seat. That seat has been pretty vacant for the last, oh, eighteen months or so, by the way, and that hasn’t seemed to bother anyone, but I digress, and this time not even parenthetically.
One can’t blame the GOP for this nakedly self-serving and partisan ad; it wants a shot at another Senate seat and, in an attempt to get it, is exploiting the perhaps two most salient characteristics of the modern American, especially the modern American of my generation: the seemingly uncontrollable habit of taking everything that occurs as yet another excuse for self-congratulation and the endless effort to achieve some sort of victimhood status. As I have said for years, “E Pluribus Unum” ought to be replaced in by “It’s Not My Fault” as the motto for modern America.
One can argue the merits of a special election to fill empty Senate seats, in Illinois or elsewhere. One could also argue for the sanctity of a constitution, but that is an argument that has fallen on increasingly deaf ears for at least the last fifty years in America. But regardless of the merits of a special Senatorial election, one really has to ask one’s self about the basis of this GOP approach. Do we in Illinois really deserve better? After all, we elected this clown of a governor. And he isn’t the first clown, or felon, that we have elected. Indeed, for generations, we have overlooked blatant corruption and voted for the most nefarious of scoundrels. Many of us have even reveled in our state’s, and especially its biggest city’s, hair shirt reputation as a city that boasts “the best politicians money can buy,” where “an honest politician is one who once bought stays bought,” and where voters are urged to “vote early and vote often.”
So where do we, even those of us who never voted for Blagojevich, get the idea that somehow we deserve better than what we are getting? As an electorate, we are getting exactly what we voted for, and, as paraphrasing one of my heroes, H.L. Mencken, we are getting it good.
The vestigial appendage known as the Republican Party in Illinois is currently running an ad urging its listeners to challenge the constitution of our state and urge their lawmakers to call a special election to fill Barack Obama’s U.S. Senate seat, the seat that our esteemed governor unsuccessfully attempted to peddle to a rather considerable group of interested parties.
The ad that the GOP is currently running tells us that the people of Illinois “deserve” better than they have been getting from their politicians (the currently second most prominent of whom is none other than that grand Pooh-Bah of the Illinois Republican Party, George Ryan, but somehow that is not at all implied in the ad), that they “deserve” a special election to fill Mr. Obama’s vacant seat. That seat has been pretty vacant for the last, oh, eighteen months or so, by the way, and that hasn’t seemed to bother anyone, but I digress, and this time not even parenthetically.
One can’t blame the GOP for this nakedly self-serving and partisan ad; it wants a shot at another Senate seat and, in an attempt to get it, is exploiting the perhaps two most salient characteristics of the modern American, especially the modern American of my generation: the seemingly uncontrollable habit of taking everything that occurs as yet another excuse for self-congratulation and the endless effort to achieve some sort of victimhood status. As I have said for years, “E Pluribus Unum” ought to be replaced in by “It’s Not My Fault” as the motto for modern America.
One can argue the merits of a special election to fill empty Senate seats, in Illinois or elsewhere. One could also argue for the sanctity of a constitution, but that is an argument that has fallen on increasingly deaf ears for at least the last fifty years in America. But regardless of the merits of a special Senatorial election, one really has to ask one’s self about the basis of this GOP approach. Do we in Illinois really deserve better? After all, we elected this clown of a governor. And he isn’t the first clown, or felon, that we have elected. Indeed, for generations, we have overlooked blatant corruption and voted for the most nefarious of scoundrels. Many of us have even reveled in our state’s, and especially its biggest city’s, hair shirt reputation as a city that boasts “the best politicians money can buy,” where “an honest politician is one who once bought stays bought,” and where voters are urged to “vote early and vote often.”
So where do we, even those of us who never voted for Blagojevich, get the idea that somehow we deserve better than what we are getting? As an electorate, we are getting exactly what we voted for, and, as paraphrasing one of my heroes, H.L. Mencken, we are getting it good.
“YOU ONLY FALL FOR LIES AND STORIES WHEN YOU REALLY WANT TO”
12/18/08
One of the hot topics on CNBC today was the Bernie Madoff Ponzi scheme that entrapped perhaps thousands of, by SEC definition, “sophisticated” investors and cost billions of dollars. (See my 12/12/08 post, BUT HE BELONGED TO BOCA RIO AND FRESH MEADOWS!) One of the experts consulted on this development was a reporter from the Financial Times whose name I didn’t catch. She was outlining the breadth and depth of this financial fiasco, mentioning the loss of faith in the markets it would engender, the many charities that would be hurt, or worse, and the fact that some of the (once) wealthy victims might be forced to (Gasp!) sell their homes due to the losses that they had incurred from trusting Bernie Madoff.
Unless one has an inexhaustible well of sympathy, it is hard to expend much of it on the people who lost money investing with Bernie Madoff. Yes, some might lose their Palm Beach homes or their Manhattan townhouses, but these were, for the most part, accomplished, smart people who should have known better. A lot of people who were far less worldly, sophisticated, and wealthy than Madoff’s investors (people who, by the way, would not get a second look from Mr. Madoff because their “investable funds” were so paltry) have lost and will lose their homes, and everything else (materially), due to the financial crisis we are currently experiencing, and almost none of these people is anywhere near entirely blameless, as readers of the IP know. Madoff’s groupies were, after all, “sophisticated” investors (by SEC definition and certainly in their own minds until, of course, the bottom fell out and they started grasping for victimhood status) who would not sully their hands with such plebeian investments as dumb old index funds or CDs. Why waste their time, and mix with the common folk, when they could travel in the rarefied company of Bernie Madoff?
Okay, so not all of Bernie’s investors were heartless snobs who felt that normal investing was beneath them when they could be part of the Madoff crowd. Many, perhaps most, doubtless were good people. But all either had something on the ball (like Mr. Carl Shapiro, a 95 year old apparel entrepreneur who amassed a self-made fortune of approximately $500mm and who had been investing with Madoff for decades) or had stumbled on a fortune in the ways that are becoming more fashionable and common among Americans who like to argue that, yes, indeed, capitalism really works: they were born on third base or knew somebody who knew somebody who put them on third base and thought they hit the triple. In the case of Mr. Madoff’s investors who were really accomplished and/or smart, they should have done their homework and had the courage to ask questions, pull their money, or at least diversify. In the case of those Madoff investors who either inherited or lucked into their money…oh well.
What about the charities that have been hurt by Big Hearted Bernie? Am I so heartless that I care little about them? Of course not. The beneficiaries of these charities are the true innocent victims here. But among the true miscreants, along with Mr. Madoff, are the people who run these charities. Charities hire “experts,” who are paid very big salaries, to screen and analyze investments. And even the people in charge of these charities, the people who hire these financial “experts,” generally pay themselves handsomely to steward the funds with which they are entrusted. Nobody earns his or her salary, or the trust of the donors or beneficiaries of these charities, by hiring experts on the basis of “…his parents belong to our club” who in turn choose investments on the basis “…my brother-in-law played golf with him the other day, and he says he’ll let us invest with him if we don’t ask any questions.”
Investing is not a case of putting your money in the hands of someone who knows someone you know or who travels in the right circles. I am not naïve; I realize that much, if not most, business in this country is done on the basis of personal relationships. But an introduction should be only the beginning of the process, not the end of the process. We might (though we shouldn’t) limit our consideration to those who have been introduced to us, but, even after the introduction, there is still consideration, in the form of research, to be done. We should rely on our brains, or at least our common sense, when making investment decisions. And we shouldn’t rely on sympathy, or a government handout (You know such a bailout, or at least a full court press for it, is coming in this case.), when we don’t.
One of the hot topics on CNBC today was the Bernie Madoff Ponzi scheme that entrapped perhaps thousands of, by SEC definition, “sophisticated” investors and cost billions of dollars. (See my 12/12/08 post, BUT HE BELONGED TO BOCA RIO AND FRESH MEADOWS!) One of the experts consulted on this development was a reporter from the Financial Times whose name I didn’t catch. She was outlining the breadth and depth of this financial fiasco, mentioning the loss of faith in the markets it would engender, the many charities that would be hurt, or worse, and the fact that some of the (once) wealthy victims might be forced to (Gasp!) sell their homes due to the losses that they had incurred from trusting Bernie Madoff.
Unless one has an inexhaustible well of sympathy, it is hard to expend much of it on the people who lost money investing with Bernie Madoff. Yes, some might lose their Palm Beach homes or their Manhattan townhouses, but these were, for the most part, accomplished, smart people who should have known better. A lot of people who were far less worldly, sophisticated, and wealthy than Madoff’s investors (people who, by the way, would not get a second look from Mr. Madoff because their “investable funds” were so paltry) have lost and will lose their homes, and everything else (materially), due to the financial crisis we are currently experiencing, and almost none of these people is anywhere near entirely blameless, as readers of the IP know. Madoff’s groupies were, after all, “sophisticated” investors (by SEC definition and certainly in their own minds until, of course, the bottom fell out and they started grasping for victimhood status) who would not sully their hands with such plebeian investments as dumb old index funds or CDs. Why waste their time, and mix with the common folk, when they could travel in the rarefied company of Bernie Madoff?
Okay, so not all of Bernie’s investors were heartless snobs who felt that normal investing was beneath them when they could be part of the Madoff crowd. Many, perhaps most, doubtless were good people. But all either had something on the ball (like Mr. Carl Shapiro, a 95 year old apparel entrepreneur who amassed a self-made fortune of approximately $500mm and who had been investing with Madoff for decades) or had stumbled on a fortune in the ways that are becoming more fashionable and common among Americans who like to argue that, yes, indeed, capitalism really works: they were born on third base or knew somebody who knew somebody who put them on third base and thought they hit the triple. In the case of Mr. Madoff’s investors who were really accomplished and/or smart, they should have done their homework and had the courage to ask questions, pull their money, or at least diversify. In the case of those Madoff investors who either inherited or lucked into their money…oh well.
What about the charities that have been hurt by Big Hearted Bernie? Am I so heartless that I care little about them? Of course not. The beneficiaries of these charities are the true innocent victims here. But among the true miscreants, along with Mr. Madoff, are the people who run these charities. Charities hire “experts,” who are paid very big salaries, to screen and analyze investments. And even the people in charge of these charities, the people who hire these financial “experts,” generally pay themselves handsomely to steward the funds with which they are entrusted. Nobody earns his or her salary, or the trust of the donors or beneficiaries of these charities, by hiring experts on the basis of “…his parents belong to our club” who in turn choose investments on the basis “…my brother-in-law played golf with him the other day, and he says he’ll let us invest with him if we don’t ask any questions.”
Investing is not a case of putting your money in the hands of someone who knows someone you know or who travels in the right circles. I am not naïve; I realize that much, if not most, business in this country is done on the basis of personal relationships. But an introduction should be only the beginning of the process, not the end of the process. We might (though we shouldn’t) limit our consideration to those who have been introduced to us, but, even after the introduction, there is still consideration, in the form of research, to be done. We should rely on our brains, or at least our common sense, when making investment decisions. And we shouldn’t rely on sympathy, or a government handout (You know such a bailout, or at least a full court press for it, is coming in this case.), when we don’t.
“(FINANCIAL) JUNCTION, WHAT’S YOUR FUNCTION?”
12/18/08
All through the financial crisis we are experiencing, we have been hearing from the “experts,” and especially from the rugged, free market type “experts” looking for a government handout, that the credit markets have “ceased to function.”
Here’s a thought…
What if the credit markets are finally functioning as they should? What if their period of dysfunction, if you will, was instead that long period, from which we are finally sobering up, during which anyone could get credit? Isn’t at least one of the functions of the credit market to channel credit from lenders to creditworthy borrowers? During the long period during which the “experts” said the credit markets were working as they should, seemingly anyone, even the least creditworthy among us, could get loans. Almost by definition, then, during those halcyon days for which the “experts” yearn and to which our policymakers in Washington strive to return us, the credit markets were indeed not functioning.
The “experts” are whining that “no one can get credit” now. Perhaps they have something of a point; maybe the markets are going a bit too far to the conservative side. But would the financial equivalent of a few cups of strong black coffee be such a bad thing after a decade long binge on the financial equivalent of cheap hooch? I know that my bank is looking for borrowers; it ran a CD special through the end of November and wound up with more lendable money than it needed. My bank’s problem, it seems, is that it is an antiquated institution that is not at the forefront of modern finance and thus clings to the quaint old notion that money ought to be lent to people who can pay it back. If my bank listened to the “experts,” there is no doubt that it could find plenty of deadbeats to take its money off it hands; it could then join the Wall Street tough guy free marketeer types and go to the federal government with the financial equivalent of a tin cup because, after all, the markets aren’t functioning. But my little bank remains obstinate in its atavistic refusal to lend money to people who can’t pay it back. That is one of the reasons I keep our money in that institution.
My bank’s willingness, but inability, to lend provides only anecdotal evidence that perhaps the problem is not dysfunctional credit markets but, rather, very well functioning credit markets. These properly working markets only seem strange because an entire generation of financial “experts” has witnessed only non-discriminating markets with nary a whit of ability to distinguish between good credits and bad credits. And perhaps all the “experts’” whining about credit markets not functioning has its genesis in the lack of genuine creditworthiness of these “experts” and the institutions that grossly overpay them.
All through the financial crisis we are experiencing, we have been hearing from the “experts,” and especially from the rugged, free market type “experts” looking for a government handout, that the credit markets have “ceased to function.”
Here’s a thought…
What if the credit markets are finally functioning as they should? What if their period of dysfunction, if you will, was instead that long period, from which we are finally sobering up, during which anyone could get credit? Isn’t at least one of the functions of the credit market to channel credit from lenders to creditworthy borrowers? During the long period during which the “experts” said the credit markets were working as they should, seemingly anyone, even the least creditworthy among us, could get loans. Almost by definition, then, during those halcyon days for which the “experts” yearn and to which our policymakers in Washington strive to return us, the credit markets were indeed not functioning.
The “experts” are whining that “no one can get credit” now. Perhaps they have something of a point; maybe the markets are going a bit too far to the conservative side. But would the financial equivalent of a few cups of strong black coffee be such a bad thing after a decade long binge on the financial equivalent of cheap hooch? I know that my bank is looking for borrowers; it ran a CD special through the end of November and wound up with more lendable money than it needed. My bank’s problem, it seems, is that it is an antiquated institution that is not at the forefront of modern finance and thus clings to the quaint old notion that money ought to be lent to people who can pay it back. If my bank listened to the “experts,” there is no doubt that it could find plenty of deadbeats to take its money off it hands; it could then join the Wall Street tough guy free marketeer types and go to the federal government with the financial equivalent of a tin cup because, after all, the markets aren’t functioning. But my little bank remains obstinate in its atavistic refusal to lend money to people who can’t pay it back. That is one of the reasons I keep our money in that institution.
My bank’s willingness, but inability, to lend provides only anecdotal evidence that perhaps the problem is not dysfunctional credit markets but, rather, very well functioning credit markets. These properly working markets only seem strange because an entire generation of financial “experts” has witnessed only non-discriminating markets with nary a whit of ability to distinguish between good credits and bad credits. And perhaps all the “experts’” whining about credit markets not functioning has its genesis in the lack of genuine creditworthiness of these “experts” and the institutions that grossly overpay them.
Saturday, December 13, 2008
“I TRUST THESE MEN WITH MY LIFE, SENATOR. TO ASK THEM TO LEAVE NOW WOULD BE AN INSULT.”
12/13/08
One of my old buddies and a loyal reader of the Insightful Pontificator has been corresponding with me regarding the Blagojevich scandal. (While he went to school in the Chicago area and worked here several years, my friend no longer lives here but remains interested in our ever fascinating politics.) In one of the e-mails he sent, he expressed concern at my contention that IF anyone in the Obama camp will be tainted by this (and I said that, in my opinion, it is highly unlikely that any of Obama’s people were involved, but IF someone is involved…), it would probably be Rahm Emanuel. My friend believes, as do I, that there is a lot on the President’s plate and getting side-tracked by the Blagojevich scandal would be bad for the country, and so my friend is hoping that Emanuel, and the whole Obama team, will emerge unscathed by the scandal. I agree, but it looks, as I said in the first paragraph below, as if this is getting closer to Emanuel.
But the more interesting aspect of the below redacted version of my e-mail is the second paragraph. I thought it was worth sharing, though it might come as no revelation whatsoever to those who follow the politics of my home town closely:
This does seem to be getting closer to Emanuel. He has had at least one conversation with Blago's people, specifically John Harris, the governor’s chief of staff who was indicted along with the governor and resigned yesterday. The question is whether Emanuel and Harris discussed anything illegal. I would hope that Emanuel is smart enough not to anything like that, but note my comments of last night. I hope this isn't the case, because I agree that there are a lot of really important matters to address at the moment, and I also think Emanuel is perfect for the job Obama has given him.
Also...speaking of John Harris, keep an eye on him (not for the scandal as it relates to Emanuel but in its broader scope). He worked for Daley for years, most saliently in the Aviation Department, supposedly a nest of corruption. It has been reported (but remember that all reporting in this town is suspect) that he was angry when Ron Huberman got the chief of staff's job (for Daley) over him and went to work for Blago in a foul disposition toward Daley. The important people around here are too smart to share anything with Governor Fauntleroy, but they probably felt they could trust Harris. Also, by the nature of his job, Harris was in a position to know more than Blagojevich about the goings-on at City Hall. So when the feds squeeze Harris, and you know they are probably squeezing really hard as I write this, who knows what he could spill on lots of important people around here?
One of my old buddies and a loyal reader of the Insightful Pontificator has been corresponding with me regarding the Blagojevich scandal. (While he went to school in the Chicago area and worked here several years, my friend no longer lives here but remains interested in our ever fascinating politics.) In one of the e-mails he sent, he expressed concern at my contention that IF anyone in the Obama camp will be tainted by this (and I said that, in my opinion, it is highly unlikely that any of Obama’s people were involved, but IF someone is involved…), it would probably be Rahm Emanuel. My friend believes, as do I, that there is a lot on the President’s plate and getting side-tracked by the Blagojevich scandal would be bad for the country, and so my friend is hoping that Emanuel, and the whole Obama team, will emerge unscathed by the scandal. I agree, but it looks, as I said in the first paragraph below, as if this is getting closer to Emanuel.
But the more interesting aspect of the below redacted version of my e-mail is the second paragraph. I thought it was worth sharing, though it might come as no revelation whatsoever to those who follow the politics of my home town closely:
This does seem to be getting closer to Emanuel. He has had at least one conversation with Blago's people, specifically John Harris, the governor’s chief of staff who was indicted along with the governor and resigned yesterday. The question is whether Emanuel and Harris discussed anything illegal. I would hope that Emanuel is smart enough not to anything like that, but note my comments of last night. I hope this isn't the case, because I agree that there are a lot of really important matters to address at the moment, and I also think Emanuel is perfect for the job Obama has given him.
Also...speaking of John Harris, keep an eye on him (not for the scandal as it relates to Emanuel but in its broader scope). He worked for Daley for years, most saliently in the Aviation Department, supposedly a nest of corruption. It has been reported (but remember that all reporting in this town is suspect) that he was angry when Ron Huberman got the chief of staff's job (for Daley) over him and went to work for Blago in a foul disposition toward Daley. The important people around here are too smart to share anything with Governor Fauntleroy, but they probably felt they could trust Harris. Also, by the nature of his job, Harris was in a position to know more than Blagojevich about the goings-on at City Hall. So when the feds squeeze Harris, and you know they are probably squeezing really hard as I write this, who knows what he could spill on lots of important people around here?
Friday, December 12, 2008
“I WANT YOU TO GO TO TATTAGLIA AND TELL HIM YOU’RE NOT SO HAPPY WITH OUR FAMILY…”
12/12/08
In yesterday’s comment on the travails of our esteemed governor and the naiveté of the national media concerning the politics practiced in these parts, I mentioned in passing that John Fund’s suggestion that President-elect Obama speak out against the corruption his adopted town “might not be a bad suggestion” and then I went on to make my major point. But now that I think of it, Mr. Obama’s speaking out against Chicago corruption would be a bad idea, certainly meaningless and potentially far more parlous.
If Mr. Obama were to get up on his high horse and denounce Chicago political corruption, the people who matter back in the great metropolis on the southern shores of Lake Michigan would, for public consumption, nod in agreement and piously proclaim the dawn of new, hopeful, kumbayaesque day of righteousness and rectitude in the Second City. In private, they’d be muttering, to themselves and among those whom they can trust, “Go (Blagojevich’s favorite expletive (“BFE” may now become an all purpose abbreviation in future issues of the Pontificator)) yourself, Junior. In eight years you’ll be making speeches, writing books, and pretending to save the world. We, or our kids, will still be conducting business back here at home.”
In other words, if Mr. Obama paraphrases Kay Corleone and says, in anger and exasperation, feigned or otherwise, “This ‘Chicago thing’ that has been going on for at least a century MUST ALL END,” the boys back home will smile, comment on what a nice, well meaning kid they raised, and go back to counting the cash.
So if Obama does denounce the Machine with which he cooperated (though not nearly as closely as the Right fervently hopes), such a denunciation will have zero impact at home and will hurt Obama by showing how impotent he really is, beyond sending money home, in matters of local politics in the greatest city on earth. Perhaps the latter is what the “conservative” punditocracy is hoping for when they urge such a denunciation; perhaps they are not as ingenuous about real politics as I suspect. But probably not.
In yesterday’s comment on the travails of our esteemed governor and the naiveté of the national media concerning the politics practiced in these parts, I mentioned in passing that John Fund’s suggestion that President-elect Obama speak out against the corruption his adopted town “might not be a bad suggestion” and then I went on to make my major point. But now that I think of it, Mr. Obama’s speaking out against Chicago corruption would be a bad idea, certainly meaningless and potentially far more parlous.
If Mr. Obama were to get up on his high horse and denounce Chicago political corruption, the people who matter back in the great metropolis on the southern shores of Lake Michigan would, for public consumption, nod in agreement and piously proclaim the dawn of new, hopeful, kumbayaesque day of righteousness and rectitude in the Second City. In private, they’d be muttering, to themselves and among those whom they can trust, “Go (Blagojevich’s favorite expletive (“BFE” may now become an all purpose abbreviation in future issues of the Pontificator)) yourself, Junior. In eight years you’ll be making speeches, writing books, and pretending to save the world. We, or our kids, will still be conducting business back here at home.”
In other words, if Mr. Obama paraphrases Kay Corleone and says, in anger and exasperation, feigned or otherwise, “This ‘Chicago thing’ that has been going on for at least a century MUST ALL END,” the boys back home will smile, comment on what a nice, well meaning kid they raised, and go back to counting the cash.
So if Obama does denounce the Machine with which he cooperated (though not nearly as closely as the Right fervently hopes), such a denunciation will have zero impact at home and will hurt Obama by showing how impotent he really is, beyond sending money home, in matters of local politics in the greatest city on earth. Perhaps the latter is what the “conservative” punditocracy is hoping for when they urge such a denunciation; perhaps they are not as ingenuous about real politics as I suspect. But probably not.
BUT HE BELONGED TO BOCA RIO AND FRESH MEADOWS!
12/12/08
Just a brief note on the $50 billion Bernard Madoff scandal, in which Mr. Madoff is accused of an ongoing swindle that will cost lots of people, including pension funds, funds of funds, wealthy socialites, and wealthy socialite wannabes, enormous sums of money:
Anyone who makes his or her investment decisions based on the skiing ability, the country club memberships, or the pedigree of the investment manager deserves what he gets…but only if it’s bad. If such an “investor” stumbles onto a good hedge fund or other investment vehicle because, say, “the manager rowed crew at Yale, and his father belongs to our club,” s/he ought to just be grateful, but, in most cases, will instead be braggadocious about his “investment acumen.”
Many “sophisticated investors,” even, or perhaps especially, according to the SEC’s definition, know lots of people…and very little else. They fall for slick presentations and repeatedly (not only in their investments but in their choices of cars, houses, vacation spots, etc.) mistake style for substance. They can’t even take the time, or perhaps lack the cranial capacity or the intestinal fortitude, to examine their “investments” in light of the old adage “If it seems too good to be true, it probably is.” (If you think about it, this adage should be "If it seems too good to be true, it probably isn't." Although this misuse is sui generis with the careless "I could care less," I will make this nod to convention...this time.) Apparently for years people were too timid, or too dull of mind, to even ask Mr. Madoff for the most routine information. I suppose he was so smart and knew so many wealthy people that it was gauche to bother him with such mundane requests.
I’ll bet his PowerPoint presentations, if he had any, were terrific: plenty of bright colors, cool icons, and sounds of clicking cameras. None of that boring numbers stuff. And he knew so many of the right people!
I hope these patheticoes who invested with Mr. Madoff don’t come crying to the government for some sort of bailout, but so many of the “right” people will be around the White House, and will then be replaced by other “right” people, that I wouldn’t be surprised if such requests were to find a sympathetic ear in the Paulson/Geithner Treasury Department.
Just a brief note on the $50 billion Bernard Madoff scandal, in which Mr. Madoff is accused of an ongoing swindle that will cost lots of people, including pension funds, funds of funds, wealthy socialites, and wealthy socialite wannabes, enormous sums of money:
Anyone who makes his or her investment decisions based on the skiing ability, the country club memberships, or the pedigree of the investment manager deserves what he gets…but only if it’s bad. If such an “investor” stumbles onto a good hedge fund or other investment vehicle because, say, “the manager rowed crew at Yale, and his father belongs to our club,” s/he ought to just be grateful, but, in most cases, will instead be braggadocious about his “investment acumen.”
Many “sophisticated investors,” even, or perhaps especially, according to the SEC’s definition, know lots of people…and very little else. They fall for slick presentations and repeatedly (not only in their investments but in their choices of cars, houses, vacation spots, etc.) mistake style for substance. They can’t even take the time, or perhaps lack the cranial capacity or the intestinal fortitude, to examine their “investments” in light of the old adage “If it seems too good to be true, it probably is.” (If you think about it, this adage should be "If it seems too good to be true, it probably isn't." Although this misuse is sui generis with the careless "I could care less," I will make this nod to convention...this time.) Apparently for years people were too timid, or too dull of mind, to even ask Mr. Madoff for the most routine information. I suppose he was so smart and knew so many wealthy people that it was gauche to bother him with such mundane requests.
I’ll bet his PowerPoint presentations, if he had any, were terrific: plenty of bright colors, cool icons, and sounds of clicking cameras. None of that boring numbers stuff. And he knew so many of the right people!
I hope these patheticoes who invested with Mr. Madoff don’t come crying to the government for some sort of bailout, but so many of the “right” people will be around the White House, and will then be replaced by other “right” people, that I wouldn’t be surprised if such requests were to find a sympathetic ear in the Paulson/Geithner Treasury Department.
Thursday, December 11, 2008
“THIS…IS…MY KIND OF TOWN”
12/11/08
Just when I’ve written a piece about national reporters’ displaying their ignorance of Chicago politics in the wake of an national attention garnering story emanating from my hometown, largely because of their eagerness to look at our politics through an ideological prism, John Fund of the Wall Street Journal provides abundant evidence supporting my argument.
In a 12/11/08 Opinion piece in the Journal, Mr. Fund, always eager to go after Mr. Obama and any other liberal Democrat, argues that President-elect Obama ought to speak out against corruption in his home town and lambastes him for being largely silent about its sordid politics. That might not be a bad suggestion, but it is the background that Mr. Fund uses that shows his typical national reporter innocence regarding the politics of the great metropolis on the southern shores of Lake Michigan.
Mr. Fund states that “House Speaker Michael Madigan drafted a memo on why Democrats should impeach Mr. Blagojevich” in the Spring of 2006. But Senate President Emil Jones, an Obama and Blagojevich ally (mentor, in a sense, especially to Mr. Obama) opposed the move, saying that it was wrong for Mr. Madigan to “promote the impeachment of a Democratic governor.” Mr. Obama, shamefully, in Mr. Fund’s estimation, kept silent on the matter rather than stand with Mr. Madigan.
So there you have Mr. Fund’s view of Chicago politics: crusading reformer Michael Madigan seeks to excise corruption from the governor’s office (and presumably Illinois politics) by impeaching Mr. Blagojevich, but the corrupt Emil Jones thwarts his every move while Barack Obama acquiesces to Mr. Jones’ evil designs by his stunning silence.
Hmm…Mike Madigan (who lives in St. Bede’s Parish on my beloved South Side, walking distance from Vito and Nick’s, perhaps the foremost purveyor of the thin crust pizza South Siders prefer to the deep dish stuff (which is by no means bad, just different) that national reporters insist on calling “Chicago style pizza”) is some sort of reformer? Mike Madigan is perhaps the smartest politician in Chicago and one of the most powerful. He runs the most efficient and effective ward organization (13th) in the city and commands the State House of Representatives with an iron fist. He has many admirable qualities, but he is, first and foremost, a Chicago Machine politician in every sense of the word. He has never been in the federal trouble that has plagued so many of his colleagues because he is clean and very smart, the former in a relative sense. Emil Jones has the same exact attributes without the superlatives and a few of the specifics. The two disagree on few things, and one of them is, or was, Mr. Blagojevich. But Mr. Madigan’s longstanding problem with Mr. Blagojevich arises not because of some kind of disgust on Mr. Madigan’s part with corruption per se, but with Mr. Blagojevich’s irresponsible style, lack of anything resembling restraint or subtlety, audacious greed, and unwillingness to play ball with the powers-that-be in the Machine. (That Mr. Madigan’s daughter, Attorney General Lisa Madigan, has long been considered a rival of Mr. Blagojevich has something to do with it, also, but not as much as most national reporters suppose.) Mr. Jones was willing to overlook these attributes of Mr. Blagojevich primarily because Mr. Blagojevich was willing to play ball with Mr. Jones, primarily in a bid to drive a wedge between white and black elements of the Machine in order to weaken Mr. Madigan and other elements of the old guard.
Again, trying to view Chicago politics in anything resembling an ideological light, which we are seeing in abundance of late, primarily from the “conservative” punditocracy, is a huge, hubristic mistake. In my home town, politics is a business, pure and simple. Words like “conservative” and “liberal,” even “Democrat” and “Republican” mean nothing.
And another thing for the national media (though not necessarily Mr. Fund): Mr. Jones, formerly my state senator, pronounces his first name “EE ml” not “u MEEL.” No self-respecting Chicago politician would trot around with a name that makes him sound like a French artist.
Just when I’ve written a piece about national reporters’ displaying their ignorance of Chicago politics in the wake of an national attention garnering story emanating from my hometown, largely because of their eagerness to look at our politics through an ideological prism, John Fund of the Wall Street Journal provides abundant evidence supporting my argument.
In a 12/11/08 Opinion piece in the Journal, Mr. Fund, always eager to go after Mr. Obama and any other liberal Democrat, argues that President-elect Obama ought to speak out against corruption in his home town and lambastes him for being largely silent about its sordid politics. That might not be a bad suggestion, but it is the background that Mr. Fund uses that shows his typical national reporter innocence regarding the politics of the great metropolis on the southern shores of Lake Michigan.
Mr. Fund states that “House Speaker Michael Madigan drafted a memo on why Democrats should impeach Mr. Blagojevich” in the Spring of 2006. But Senate President Emil Jones, an Obama and Blagojevich ally (mentor, in a sense, especially to Mr. Obama) opposed the move, saying that it was wrong for Mr. Madigan to “promote the impeachment of a Democratic governor.” Mr. Obama, shamefully, in Mr. Fund’s estimation, kept silent on the matter rather than stand with Mr. Madigan.
So there you have Mr. Fund’s view of Chicago politics: crusading reformer Michael Madigan seeks to excise corruption from the governor’s office (and presumably Illinois politics) by impeaching Mr. Blagojevich, but the corrupt Emil Jones thwarts his every move while Barack Obama acquiesces to Mr. Jones’ evil designs by his stunning silence.
Hmm…Mike Madigan (who lives in St. Bede’s Parish on my beloved South Side, walking distance from Vito and Nick’s, perhaps the foremost purveyor of the thin crust pizza South Siders prefer to the deep dish stuff (which is by no means bad, just different) that national reporters insist on calling “Chicago style pizza”) is some sort of reformer? Mike Madigan is perhaps the smartest politician in Chicago and one of the most powerful. He runs the most efficient and effective ward organization (13th) in the city and commands the State House of Representatives with an iron fist. He has many admirable qualities, but he is, first and foremost, a Chicago Machine politician in every sense of the word. He has never been in the federal trouble that has plagued so many of his colleagues because he is clean and very smart, the former in a relative sense. Emil Jones has the same exact attributes without the superlatives and a few of the specifics. The two disagree on few things, and one of them is, or was, Mr. Blagojevich. But Mr. Madigan’s longstanding problem with Mr. Blagojevich arises not because of some kind of disgust on Mr. Madigan’s part with corruption per se, but with Mr. Blagojevich’s irresponsible style, lack of anything resembling restraint or subtlety, audacious greed, and unwillingness to play ball with the powers-that-be in the Machine. (That Mr. Madigan’s daughter, Attorney General Lisa Madigan, has long been considered a rival of Mr. Blagojevich has something to do with it, also, but not as much as most national reporters suppose.) Mr. Jones was willing to overlook these attributes of Mr. Blagojevich primarily because Mr. Blagojevich was willing to play ball with Mr. Jones, primarily in a bid to drive a wedge between white and black elements of the Machine in order to weaken Mr. Madigan and other elements of the old guard.
Again, trying to view Chicago politics in anything resembling an ideological light, which we are seeing in abundance of late, primarily from the “conservative” punditocracy, is a huge, hubristic mistake. In my home town, politics is a business, pure and simple. Words like “conservative” and “liberal,” even “Democrat” and “Republican” mean nothing.
And another thing for the national media (though not necessarily Mr. Fund): Mr. Jones, formerly my state senator, pronounces his first name “EE ml” not “u MEEL.” No self-respecting Chicago politician would trot around with a name that makes him sound like a French artist.
Wednesday, December 10, 2008
“WE DON’T WANT NOBODY NOBODY SENT”
12/10/08
Even though time is very short this week and I don’t think I have much original to say on the topic, I feel compelled to comment on the self-induced travails of our esteemed governor.
First, a personal note. A long time ago when I regularly appeared on a political talk show on WLS Radio in Chicago, Blagojevich and I were once placed on the same panel. He was a Congressman at the time and, if you believe those in public life who know, or at least work with (One of the consensus opinions is that no one really knows Rod Blagojevich any more…or at least no one will admit to knowing him.) him, he was a different person at the time. At any rate, Blagojevich and I were really going at each other with a considerable degree of fury; at the time I was pretty much a down the line conservative Republican and he was a Democrat who still had something of a liberal ideological underpinning. As soon as the program was over, he looked at me, shook his head in either frustration or exhaustion, and said “You’re a provocative guy, Quinn.” I said “Thanks, Rod. I appreciate that.” So we know that our governor has, or at least had, a firm grasp of the obvious.
Second, “most” is too strong a word, so I will say that “many” of our public servants in Chicago and its environs are on the take. But the real pros ply their trade with a degree of subtlety and skill that keeps them either actually or effectively out of the reach of the federal government. And they all know sign language when they suspect that they may be under federal scrutiny. Mr. Blagojevich, on the other hand, displayed all the subtlety of a frat boy at a keg party which, come to think of it, is a better analogy than I originally intended. It was not so much the magnitude, which itself was stunning to say the least, of his offenses, but the blatantness of those alleged crimes that shocked even the most hardened observers of our local political scene. Even those of us who have no training in psychology can only conclude that our boy governor not only defines the word “popinjay,” but also seems to be suffering from some kind of psychological handicap far beyond simple narcissism. To put it technically, he is out of his (to use one of what we now know are the favorite words in the Blagojevich household) (fornicating) mind. That seems to be the only logical explanation for such wanton and careless behavior.
Third, I am always amazed by the naiveté of those members of the national media who, whenever something like this forces them to focus on the politics of our town, imagine themselves experts on Chicago politics. No one who has not lived Chicago politics can possibly know Chicago politics. The errors of the national press corps consist not so much of dismissing our politics as unmitigatingly corrupt and then expressing either shock or humor, but, rather, in looking at our politics through an ideological prism. At times like these, conservative Republicans love to emphasize that most (but by no means all; witness George Ryan, et. al.) of the perpetrators are Democrats. The word “liberal” is, if not specifically stated, implied. When the perp is a Republican, like George Ryan, liberal quarters of the media will clearly label him as a Republican with the similarly stated or implied adjective “conservative.” When some politician in this town shows himself or herself to be an effective, even visionary leader, as Mayor Daley often does, as did his father before him, conservative members of the punditocracy love to opine that he or she is a “different kind of Democrat,” or “actually a Republican, if truth be told.”
All such characterizations are balderdash. Party labels are largely meaningless and ideology counts for less than nothing in Chicago. At its best to practitioners of our politics, ideology is a tool, best employed by feigning solidarity, for making allies in Washington who can send money Chicago’s way. At worst it is a hindrance to going about the real business of politics, which is, well, business—making money, accumulating power and prestige, and moving up the ladder by gaining the capacity to do favors that must be returned. To paraphrase one of our greatest presidents, who was not from Chicago (Good thing; he probably would have been eaten alive by the Big Bill Thompsons and the Tony Cermaks who held court in Chicago in his era.), the politics of Chicago is business, or the business of Chicago is politics. To paraphrase another corrupt governor from a faraway land in a faraway time: Ideology? What is that?
Chicago politics is not about ideas or philosophy. It is about getting things done. And those “things” are not all evil. Those instant experts on our politics would do well to spend some time here before looking for pat answers, or gazing in feigned or real bemusement, at the corrupt, but in many ways effective and certainly entertaining, politics of our city.
Even though time is very short this week and I don’t think I have much original to say on the topic, I feel compelled to comment on the self-induced travails of our esteemed governor.
First, a personal note. A long time ago when I regularly appeared on a political talk show on WLS Radio in Chicago, Blagojevich and I were once placed on the same panel. He was a Congressman at the time and, if you believe those in public life who know, or at least work with (One of the consensus opinions is that no one really knows Rod Blagojevich any more…or at least no one will admit to knowing him.) him, he was a different person at the time. At any rate, Blagojevich and I were really going at each other with a considerable degree of fury; at the time I was pretty much a down the line conservative Republican and he was a Democrat who still had something of a liberal ideological underpinning. As soon as the program was over, he looked at me, shook his head in either frustration or exhaustion, and said “You’re a provocative guy, Quinn.” I said “Thanks, Rod. I appreciate that.” So we know that our governor has, or at least had, a firm grasp of the obvious.
Second, “most” is too strong a word, so I will say that “many” of our public servants in Chicago and its environs are on the take. But the real pros ply their trade with a degree of subtlety and skill that keeps them either actually or effectively out of the reach of the federal government. And they all know sign language when they suspect that they may be under federal scrutiny. Mr. Blagojevich, on the other hand, displayed all the subtlety of a frat boy at a keg party which, come to think of it, is a better analogy than I originally intended. It was not so much the magnitude, which itself was stunning to say the least, of his offenses, but the blatantness of those alleged crimes that shocked even the most hardened observers of our local political scene. Even those of us who have no training in psychology can only conclude that our boy governor not only defines the word “popinjay,” but also seems to be suffering from some kind of psychological handicap far beyond simple narcissism. To put it technically, he is out of his (to use one of what we now know are the favorite words in the Blagojevich household) (fornicating) mind. That seems to be the only logical explanation for such wanton and careless behavior.
Third, I am always amazed by the naiveté of those members of the national media who, whenever something like this forces them to focus on the politics of our town, imagine themselves experts on Chicago politics. No one who has not lived Chicago politics can possibly know Chicago politics. The errors of the national press corps consist not so much of dismissing our politics as unmitigatingly corrupt and then expressing either shock or humor, but, rather, in looking at our politics through an ideological prism. At times like these, conservative Republicans love to emphasize that most (but by no means all; witness George Ryan, et. al.) of the perpetrators are Democrats. The word “liberal” is, if not specifically stated, implied. When the perp is a Republican, like George Ryan, liberal quarters of the media will clearly label him as a Republican with the similarly stated or implied adjective “conservative.” When some politician in this town shows himself or herself to be an effective, even visionary leader, as Mayor Daley often does, as did his father before him, conservative members of the punditocracy love to opine that he or she is a “different kind of Democrat,” or “actually a Republican, if truth be told.”
All such characterizations are balderdash. Party labels are largely meaningless and ideology counts for less than nothing in Chicago. At its best to practitioners of our politics, ideology is a tool, best employed by feigning solidarity, for making allies in Washington who can send money Chicago’s way. At worst it is a hindrance to going about the real business of politics, which is, well, business—making money, accumulating power and prestige, and moving up the ladder by gaining the capacity to do favors that must be returned. To paraphrase one of our greatest presidents, who was not from Chicago (Good thing; he probably would have been eaten alive by the Big Bill Thompsons and the Tony Cermaks who held court in Chicago in his era.), the politics of Chicago is business, or the business of Chicago is politics. To paraphrase another corrupt governor from a faraway land in a faraway time: Ideology? What is that?
Chicago politics is not about ideas or philosophy. It is about getting things done. And those “things” are not all evil. Those instant experts on our politics would do well to spend some time here before looking for pat answers, or gazing in feigned or real bemusement, at the corrupt, but in many ways effective and certainly entertaining, politics of our city.
Sunday, December 7, 2008
“LET’S SPEND IT, LEND IT, SEND IT ROLLING ALONG…”
12/7/08
In today’s (i.e., Sunday, 12/7/08’s) Chicago Tribune, we find short a letter from the Mr. Jim Poole of Chicago. Mr. Poole opines:
“I am going to spend some cash. Even though gas prices are going down, I am going go find a car that gets 30-plus miles to the gallon and buy it. I am going to take the kids shopping for clothes, and my wife and I are headed out to dinner. Bailout or not, the only way the economy is going to get going again is with all of us spending money. What good are savings that pay you 2 percent interest? We need to refill the machine and spend some cash. If we don’t, I am afraid we will be seeing 20 percent unemployment in the coming months.”
One can have two not necessarily mutually exclusive reactions to Mr. Poole’s observations. The first is that Mr. Poole is, like just about every modern American, is hopelessly addicted to spending money and so simply can’t help himself. Like a drunk who has been white knuckling it for the last few months, he is looking for half-baked theories to justify indulging his habit. Most Americans, like Mr. Poole, are more than willing to do their patriotic duty if doing so involves spending money.
The second is that Mr. Poole is merely behaving rationally, responding to the incentives the government initially put in place in a desperate attempt to avoid a (Horrors!) recession and, having characteristically failed at that quixotic crusade, continues to concoct in an effort to avoid deepening the recession. As Mr. Poole points out, savers are being taken for chumps at today’s low interest rates and have been played for even bigger fools if they’ve put their money in the stock market over the last, oh, ten years or so. So why not spend? The government, by ever loosening money, has made those responsible savers pay for the excesses of the reflexive spenders who got us into this mess in the first place. This is not a political statement; rewarding the irresponsible and punishing the responsible has long been a bi-partisan enthusiasm in Washington, and Mr. Obama shows no inclination to alter the baleful artifice that passes for economic policy in Washington.
Whether Mr. Poole is just an ingenuous exemplar of the hopeless spending addiction that, unless checked, will surely lead to the end of our long run as a world economic power or a rational economic actor responding to the antipodean palliatives emanating from Washington makes no difference. While a bout of spending may help, as Mr. Poole and economic thinkers in both New York and Washington seem to believe, such succor will be horribly short-lived. Unless we break our spending addiction, it’s curtains for the U.S. economy. .
If economic policy makers continue to punish saving and reward saving, the nescient eupeptic effects our economic problems are having on the nation’s savings rate (See my 11/26/08 post.) will rapidly reverse and we will find ourselves plunging even more quickly than most had previously supposed toward permanent economic ruin.
In my 11/21/08 post, I told readers that I had altered my outlook for the markets, but not for the economy, from outright and deeply bearish to a stance that can best be characterized as somewhere between mildly bearish and mildly bullish, which, come to think of it, sounds a lot like neutral. But given that the S&P is up 9.5% since then (after having traded higher), the almost unmitigated bad economic news that has been released since then, and the government’s seeming determination to counter any favorable economic developments with more of the counter-productive bromides that are endemic to public policy, only now in even more brobdingnagian portions, it is becoming harder to take anything but an outright, unabashed bearish stance toward the economy and the markets.
In today’s (i.e., Sunday, 12/7/08’s) Chicago Tribune, we find short a letter from the Mr. Jim Poole of Chicago. Mr. Poole opines:
“I am going to spend some cash. Even though gas prices are going down, I am going go find a car that gets 30-plus miles to the gallon and buy it. I am going to take the kids shopping for clothes, and my wife and I are headed out to dinner. Bailout or not, the only way the economy is going to get going again is with all of us spending money. What good are savings that pay you 2 percent interest? We need to refill the machine and spend some cash. If we don’t, I am afraid we will be seeing 20 percent unemployment in the coming months.”
One can have two not necessarily mutually exclusive reactions to Mr. Poole’s observations. The first is that Mr. Poole is, like just about every modern American, is hopelessly addicted to spending money and so simply can’t help himself. Like a drunk who has been white knuckling it for the last few months, he is looking for half-baked theories to justify indulging his habit. Most Americans, like Mr. Poole, are more than willing to do their patriotic duty if doing so involves spending money.
The second is that Mr. Poole is merely behaving rationally, responding to the incentives the government initially put in place in a desperate attempt to avoid a (Horrors!) recession and, having characteristically failed at that quixotic crusade, continues to concoct in an effort to avoid deepening the recession. As Mr. Poole points out, savers are being taken for chumps at today’s low interest rates and have been played for even bigger fools if they’ve put their money in the stock market over the last, oh, ten years or so. So why not spend? The government, by ever loosening money, has made those responsible savers pay for the excesses of the reflexive spenders who got us into this mess in the first place. This is not a political statement; rewarding the irresponsible and punishing the responsible has long been a bi-partisan enthusiasm in Washington, and Mr. Obama shows no inclination to alter the baleful artifice that passes for economic policy in Washington.
Whether Mr. Poole is just an ingenuous exemplar of the hopeless spending addiction that, unless checked, will surely lead to the end of our long run as a world economic power or a rational economic actor responding to the antipodean palliatives emanating from Washington makes no difference. While a bout of spending may help, as Mr. Poole and economic thinkers in both New York and Washington seem to believe, such succor will be horribly short-lived. Unless we break our spending addiction, it’s curtains for the U.S. economy. .
If economic policy makers continue to punish saving and reward saving, the nescient eupeptic effects our economic problems are having on the nation’s savings rate (See my 11/26/08 post.) will rapidly reverse and we will find ourselves plunging even more quickly than most had previously supposed toward permanent economic ruin.
In my 11/21/08 post, I told readers that I had altered my outlook for the markets, but not for the economy, from outright and deeply bearish to a stance that can best be characterized as somewhere between mildly bearish and mildly bullish, which, come to think of it, sounds a lot like neutral. But given that the S&P is up 9.5% since then (after having traded higher), the almost unmitigated bad economic news that has been released since then, and the government’s seeming determination to counter any favorable economic developments with more of the counter-productive bromides that are endemic to public policy, only now in even more brobdingnagian portions, it is becoming harder to take anything but an outright, unabashed bearish stance toward the economy and the markets.
Friday, December 5, 2008
MOE, LARRY, AND SOCRATES?
12/5/08
As I have said on numerous occasions in the past, one cannot take the “Big 3” as some monolithic, homogeneous group of industrial monoliths. These are three very different companies. I pointed out some of those differences in my last post, and want to bring up a few more, especially as they relate the bailout.
First, Ford is in the best position of the Big 3. The conventional wisdom is that it is in the best shape because it has enough cash to last it well into 2009 and perhaps beyond, largely because it, wisely anticipating trouble, mortgaged everything in order to raise a cash horde to see it through what it knew would be hard times. I think that, while the conventional wisdom has it partially right, F is also in good shape because it has made more advances than its Detroit colleagues in platform sharing and leveraging its overseas resources to meet growing demand in the U.S. market for fuel efficient cars. As I am in most of my beliefs, I am probably in the minority in this contention, but, as is also not at all unusual, I am probably right.
But let us get back to the point about F mortgaging its assets to raise a cash horde. F did so at rates that, while looking absurdly low at this stage, were considered very rich (for it, the issuer) at the time and that required some sacrifice and a lot of intestinal fortitude. Neither GM nor Chrysler made such moves. Admittedly, Chrysler could not do because it was leveraged to the hilt in order to finance its “unleveraged” takeover by Cerberus, but that is another story. But if the Big 3 do indeed get bailed out, F will need only a line of credit because of its financial foresight. GM and Chrysler will need money yesterday because they were not so financially prescient. So wouldn’t a bailout be rewarding the relatively careless financial stewardship of GM and Chrysler while punishing, in a sense, F’s financial foresight if the bailout involves cheap financing? After all, had F not mortgaged itself at comparatively high rates, wouldn’t it be accessing the comparatively cheap financing that the bailout, if it takes shape, will provide to GM and Chrysler?
Second, if Chrysler does get in on the bailout cash (and it is hard to see how it won’t, though denial of Chrysler while saving the other two is one scenario being mooted), won’t the taxpayers just be dressing it up in order to allow Cerberus to cut its losses on the poorly conceived and incredibly shortsighted deal to buy Chrysler in the first place? Would the U.S. taxpayer just be helping Cerberus tee up Chrysler for a few more billion? One could think of much better uses for taxpayer money.
As I have said on numerous occasions in the past, one cannot take the “Big 3” as some monolithic, homogeneous group of industrial monoliths. These are three very different companies. I pointed out some of those differences in my last post, and want to bring up a few more, especially as they relate the bailout.
First, Ford is in the best position of the Big 3. The conventional wisdom is that it is in the best shape because it has enough cash to last it well into 2009 and perhaps beyond, largely because it, wisely anticipating trouble, mortgaged everything in order to raise a cash horde to see it through what it knew would be hard times. I think that, while the conventional wisdom has it partially right, F is also in good shape because it has made more advances than its Detroit colleagues in platform sharing and leveraging its overseas resources to meet growing demand in the U.S. market for fuel efficient cars. As I am in most of my beliefs, I am probably in the minority in this contention, but, as is also not at all unusual, I am probably right.
But let us get back to the point about F mortgaging its assets to raise a cash horde. F did so at rates that, while looking absurdly low at this stage, were considered very rich (for it, the issuer) at the time and that required some sacrifice and a lot of intestinal fortitude. Neither GM nor Chrysler made such moves. Admittedly, Chrysler could not do because it was leveraged to the hilt in order to finance its “unleveraged” takeover by Cerberus, but that is another story. But if the Big 3 do indeed get bailed out, F will need only a line of credit because of its financial foresight. GM and Chrysler will need money yesterday because they were not so financially prescient. So wouldn’t a bailout be rewarding the relatively careless financial stewardship of GM and Chrysler while punishing, in a sense, F’s financial foresight if the bailout involves cheap financing? After all, had F not mortgaged itself at comparatively high rates, wouldn’t it be accessing the comparatively cheap financing that the bailout, if it takes shape, will provide to GM and Chrysler?
Second, if Chrysler does get in on the bailout cash (and it is hard to see how it won’t, though denial of Chrysler while saving the other two is one scenario being mooted), won’t the taxpayers just be dressing it up in order to allow Cerberus to cut its losses on the poorly conceived and incredibly shortsighted deal to buy Chrysler in the first place? Would the U.S. taxpayer just be helping Cerberus tee up Chrysler for a few more billion? One could think of much better uses for taxpayer money.
“WATCH AND LEARN, BOYS, WATCH AND LEARN”
12/5/08
In its lead editorial today, the Wall Street Journal cited the importance of the choice of a new President of the New York Fed to replace Treasury Secretary nominee Tim Geithner. The Journal stated that the new Gotham Fed President must have “hard-money credentials,” must “(know) financial markets yet isn’t too close to Wall Street” and “should have the independent stature to rise above the inevitable turf battles that will break out among the giant commercial banks” that call New York home.
I couldn’t agree more with this list of qualifications for the very important New York Fed job. That is why I was surprised when the Journal didn’t mention the obvious nominee, Paul Volcker. Yes, I know Mr. Volcker has been selected by Mr. Obama to head a new appendage called the President’s Economic Recovery Advisory Board, but such councils and boards often end up becoming little more than vestigial organs that produce nothing more than paper, and one suspects that this Board may have been created as something of a gold watch for Mr. Volcker’s service to the Obama campaign. (See my 11/26/08 post.) Why not put a man of such stature and intellect into a real job whose importance is almost incalculable at this time of crisis, the New York Fed presidency, rather than what might turn out to be a useless sinecure? These times demand our best, and Mr. Volcker is certainly among our best.
In its lead editorial today, the Wall Street Journal cited the importance of the choice of a new President of the New York Fed to replace Treasury Secretary nominee Tim Geithner. The Journal stated that the new Gotham Fed President must have “hard-money credentials,” must “(know) financial markets yet isn’t too close to Wall Street” and “should have the independent stature to rise above the inevitable turf battles that will break out among the giant commercial banks” that call New York home.
I couldn’t agree more with this list of qualifications for the very important New York Fed job. That is why I was surprised when the Journal didn’t mention the obvious nominee, Paul Volcker. Yes, I know Mr. Volcker has been selected by Mr. Obama to head a new appendage called the President’s Economic Recovery Advisory Board, but such councils and boards often end up becoming little more than vestigial organs that produce nothing more than paper, and one suspects that this Board may have been created as something of a gold watch for Mr. Volcker’s service to the Obama campaign. (See my 11/26/08 post.) Why not put a man of such stature and intellect into a real job whose importance is almost incalculable at this time of crisis, the New York Fed presidency, rather than what might turn out to be a useless sinecure? These times demand our best, and Mr. Volcker is certainly among our best.
PAGING SENATOR GLASS AND REPRESENTATIVE STEAGALL
12/5/08
We learned in this morning’s Wall Street Journal (page C2, 12/5/08) that Citibank is putting the pressure on General Growth as that mall developer is seeking an extension on a $900mm secured loan for which Citi is a lead bank. It seems Citi is demanding concessions on a second, unsecured, $2.6 billion unsecured loan on which Citi is also a lead, but the details are unimportant for sake of this discussion.
We learned in the same article that Citi disclosed yesterday that it has bought 14.2 million General Growth common shares, or 5.3% of the company, in a separate transaction. Hmm…
I know that the purchase of shares is indirect, part of a swap arrangement with Pershing Square Capital Management, a hedge fund with which Citi has a lending arrangement. And I also know that Citi’s General Growth common purchase, with a total value of just over $20mm, is paltry compared to the size of its loans to general growth. That having been said, isn’t this type of arrangement what the Glass-Steagall Law, repealed in 1999, was designed to thwart, i.e., a commercial bank using its government insured deposits to protect the equity investments of its investment banking affiliate, or perhaps the equity investments of an important client? While Citi may not be doing that, the appearance here certainly has an odor rather than an aroma.
As an almost reflexive deregulator, I am not calling for the reinstatement of Glass-Steagall. Even if I were in favor of such a move, it is probably impossible at this point and, indeed, a large portion of the government’s bailout efforts of the financial industry involves having investment banks either merge with or come to look more and more like commercial banks, further blurring the distinction between the two. But, given the irresponsible behavior of some the behemoths that the repeal of Glass-Steagall made possible, maybe the new Administration and Congress might want to take a long look at Glass-Steagall and what it has wrought.
We learned in this morning’s Wall Street Journal (page C2, 12/5/08) that Citibank is putting the pressure on General Growth as that mall developer is seeking an extension on a $900mm secured loan for which Citi is a lead bank. It seems Citi is demanding concessions on a second, unsecured, $2.6 billion unsecured loan on which Citi is also a lead, but the details are unimportant for sake of this discussion.
We learned in the same article that Citi disclosed yesterday that it has bought 14.2 million General Growth common shares, or 5.3% of the company, in a separate transaction. Hmm…
I know that the purchase of shares is indirect, part of a swap arrangement with Pershing Square Capital Management, a hedge fund with which Citi has a lending arrangement. And I also know that Citi’s General Growth common purchase, with a total value of just over $20mm, is paltry compared to the size of its loans to general growth. That having been said, isn’t this type of arrangement what the Glass-Steagall Law, repealed in 1999, was designed to thwart, i.e., a commercial bank using its government insured deposits to protect the equity investments of its investment banking affiliate, or perhaps the equity investments of an important client? While Citi may not be doing that, the appearance here certainly has an odor rather than an aroma.
As an almost reflexive deregulator, I am not calling for the reinstatement of Glass-Steagall. Even if I were in favor of such a move, it is probably impossible at this point and, indeed, a large portion of the government’s bailout efforts of the financial industry involves having investment banks either merge with or come to look more and more like commercial banks, further blurring the distinction between the two. But, given the irresponsible behavior of some the behemoths that the repeal of Glass-Steagall made possible, maybe the new Administration and Congress might want to take a long look at Glass-Steagall and what it has wrought.
Thursday, December 4, 2008
THE LION LYING DOWN WITH THE LAMB
12/4/08
On today’s (i.e., Thursday, 12/4’s) Wall Street Journal Opinion page (A17), the Journal quotes Michael Moore complaining that his Chrysler (from his description, I am assuming it is a Chrysler 300, but could conceivable be a Crossfire) starts only sporadically.
Since when does the Journal cite Michael Moore as an authority on anything? I have to admit that I like Michael Moore. Sure, I disagree with him most of the time, though far less often of late. But his movies are entertaining and thought provoking and he gives the impression of being a sincere guy who genuinely cares about the average person. But the Wall Street Journal, the former voice of free men and free markets turned cheerleader for all things Republican, and especially for the current occupant of the White House, has never had a good thing to say about Michael Moore. I suppose that, as is typical lately with the Journal, all sense of shame and proportion goes out the window as long as we an all join hands and stick it to the Big 3 and the UAW. Why, if someone so liberal, even radical, as Michael Moore finds the Big 3 so incompetent and repugnant (He may not feel that way about the Big 3, by the way, but the Journal’s editing of his DailyBeast.com comments would lead one to believe that he does.), revulsion at the Big 3 and the people who work at them might just be the next great bipartisan cause. But, as usual, the Journal misses the point by trying to see everything through the lens of politics, which is, by the way, quite interesting for a publication that daily pledges its fidelity to small government and free enterprise.
It’s not surprising that people across the political spectrum love to pound on the Big 3. It doesn’t take a certain political philosophy to bash the Big 3; it takes only a glaring ignorance of the auto industry. While one could legitimately argue that the Big 3, taken as a whole, have not quite caught up to the Japanese manufacturers in terms of that nebulous quality called, well, quality, one would be a fool to say that the Big 3 produce junk and are far behind their Japanese competition. In fact, according to J.D. Powers IQS, the Big 3 are neck and neck with their Japanese competitors and, in most cases, far ahead of the European competition. According to the far more important longer term (3 year) quality surveys, the Big 3 are only slightly behind the Japanese nameplates and ahead of the European nameplates. The latter is not surprising given the vast improvements in quality that have taken in place among the Detroit 3 in the last few years.
It is also a mistake to consider the “Big 3” and the “Japanese nameplates” into meaningless agglutinations, as is so common that even I did it in the last paragraph. Some Big 3 makes, such as Buick, Cadillac, and Mercury, are even with or ahead of the best of the Japanese nameplates, such as Toyota, Lexus, and Infiniti, in reliability. Further, Caddy, Buick, Mercury and several other domestic marques are far ahead of Mercedes and VW in most measures of product reliability.
(Note that Chrysler nameplates are noticeably absent from the upper ranks of most quality and reliability measurements, so Mr. Moore might be onto something. But somehow one suspects that the inclusion of Mr. Moore’s quote was not inspired by a sudden desire of the Journal to single out Chrysler for criticism.)
Again, do the Big 3 deserve a bailout? On its face, no. But the “free market” argument that the Wall Street Journal is trying so hard to make goes out the window when the Journal has supported (I know…oh so reluctantly) the bailout of Wall Street. But why such Schadenfreude at the problems of the Big 3 that the opinion of a man the Journal would normally find despicable suddenly becomes “Notable and Quotable”?
On today’s (i.e., Thursday, 12/4’s) Wall Street Journal Opinion page (A17), the Journal quotes Michael Moore complaining that his Chrysler (from his description, I am assuming it is a Chrysler 300, but could conceivable be a Crossfire) starts only sporadically.
Since when does the Journal cite Michael Moore as an authority on anything? I have to admit that I like Michael Moore. Sure, I disagree with him most of the time, though far less often of late. But his movies are entertaining and thought provoking and he gives the impression of being a sincere guy who genuinely cares about the average person. But the Wall Street Journal, the former voice of free men and free markets turned cheerleader for all things Republican, and especially for the current occupant of the White House, has never had a good thing to say about Michael Moore. I suppose that, as is typical lately with the Journal, all sense of shame and proportion goes out the window as long as we an all join hands and stick it to the Big 3 and the UAW. Why, if someone so liberal, even radical, as Michael Moore finds the Big 3 so incompetent and repugnant (He may not feel that way about the Big 3, by the way, but the Journal’s editing of his DailyBeast.com comments would lead one to believe that he does.), revulsion at the Big 3 and the people who work at them might just be the next great bipartisan cause. But, as usual, the Journal misses the point by trying to see everything through the lens of politics, which is, by the way, quite interesting for a publication that daily pledges its fidelity to small government and free enterprise.
It’s not surprising that people across the political spectrum love to pound on the Big 3. It doesn’t take a certain political philosophy to bash the Big 3; it takes only a glaring ignorance of the auto industry. While one could legitimately argue that the Big 3, taken as a whole, have not quite caught up to the Japanese manufacturers in terms of that nebulous quality called, well, quality, one would be a fool to say that the Big 3 produce junk and are far behind their Japanese competition. In fact, according to J.D. Powers IQS, the Big 3 are neck and neck with their Japanese competitors and, in most cases, far ahead of the European competition. According to the far more important longer term (3 year) quality surveys, the Big 3 are only slightly behind the Japanese nameplates and ahead of the European nameplates. The latter is not surprising given the vast improvements in quality that have taken in place among the Detroit 3 in the last few years.
It is also a mistake to consider the “Big 3” and the “Japanese nameplates” into meaningless agglutinations, as is so common that even I did it in the last paragraph. Some Big 3 makes, such as Buick, Cadillac, and Mercury, are even with or ahead of the best of the Japanese nameplates, such as Toyota, Lexus, and Infiniti, in reliability. Further, Caddy, Buick, Mercury and several other domestic marques are far ahead of Mercedes and VW in most measures of product reliability.
(Note that Chrysler nameplates are noticeably absent from the upper ranks of most quality and reliability measurements, so Mr. Moore might be onto something. But somehow one suspects that the inclusion of Mr. Moore’s quote was not inspired by a sudden desire of the Journal to single out Chrysler for criticism.)
Again, do the Big 3 deserve a bailout? On its face, no. But the “free market” argument that the Wall Street Journal is trying so hard to make goes out the window when the Journal has supported (I know…oh so reluctantly) the bailout of Wall Street. But why such Schadenfreude at the problems of the Big 3 that the opinion of a man the Journal would normally find despicable suddenly becomes “Notable and Quotable”?
Wednesday, December 3, 2008
KEEP CHRIST OUT OF “CHRISTMAS”
12/3/08
Our society seems to have completely forgotten what this “holimonth” or “holiquarter” we are currently enduring was designed to celebrate. It was originally intended to celebrate the birth of a Great Man, a Man whom many of us believe was God Himself. Jesus took on the form of a man some 2,000 years ago (probably 2012 years ago, though scholarship differs on the almost completely unimportant exact year) in order to lead humankind to salvation by His voluntary death on the cross. Along the way to His death, he showed us how to live life to its fullest. Although you’d never know it by the way we celebrate His birth, he didn’t tell us that the key to a good life is acquiring all kinds of junk that we don’t need. He didn’t say that we ought to get anxious and short with one another in order to achieve some sort of self-designated “perfection” in the celebration of His birthday. He didn’t teach that excess is the way to happiness. He didn’t say that the real way to show love to each other was in the quantity, quality, or the price of the material things we gave each other. On the contrary, His is a way of peace, service, and relative indifference to the material aspects of our very short life here on earth. He tried to teach that a life well lived is a life of service, peace, contentment, and giving of one’s self and one’s time.
The way we celebrate Christmas is beyond sacrilege; it is a figurative slap in the face of the One whose birthday we supposedly celebrate. Everyone is appalled at the death of the Wal-Mart employee on Long Island on what is called “Black Friday,” a title that is telling enough of the monikers we have assigned to our various days of purported celebration of the birth of our Savior. But that death, as tragic as it is, is only a reflection of what Christmas has become: a money-grubbing, anxiety causing, stress inducing self-indulgent, my fellow man be damned debauch that smears the very name of the One whose birth we celebrate. Jesus has become at best an afterthought in the weeks (fast becoming months) long bacchanal we insist on calling Christmas.
Since we as a society have insisted on perverting the celebration of Christ’s birth to a point far beyond recognition and even caricature to the point of outright defiance of His message to and wishes for us, please don’t call this time of the year Christmas. Call it the Holidays. Call it the Winter Celebration. Call it whatever you want, as long as Christ’s name is kept out of it.
Consecrate the name of Christ for true Christmas, the living of His message of service, love, and peace, a Christmas that should not be restricted to the end of December, which, as most of you, was not the time of His birth but was chosen to counter the Roman feast of Saturnalia or winter solstice. Go to Christmas Mass or Christmas services. Sing and enjoy Christmas carols and hymns, prayers, and vespers. Take special care of those less (or even more) fortunate than yourself. Celebrate the birth of Christ and of His salvation. But go to Holiday sales and Holiday parties and sing and/or try to choke down vapid and tawdry Holiday songs like the especially odious “Have a Holly Jolly (Profanation),” “I Saw Mommy Kissing Santa Claus,” or “Jingle Bell Rock.” What on earth do these brazen and insipid “Holiday” celebrations have to do with the birth of Christ?
Keep Christ in Christmas, but keep Him far away from “The Holidays.”
Our society seems to have completely forgotten what this “holimonth” or “holiquarter” we are currently enduring was designed to celebrate. It was originally intended to celebrate the birth of a Great Man, a Man whom many of us believe was God Himself. Jesus took on the form of a man some 2,000 years ago (probably 2012 years ago, though scholarship differs on the almost completely unimportant exact year) in order to lead humankind to salvation by His voluntary death on the cross. Along the way to His death, he showed us how to live life to its fullest. Although you’d never know it by the way we celebrate His birth, he didn’t tell us that the key to a good life is acquiring all kinds of junk that we don’t need. He didn’t say that we ought to get anxious and short with one another in order to achieve some sort of self-designated “perfection” in the celebration of His birthday. He didn’t teach that excess is the way to happiness. He didn’t say that the real way to show love to each other was in the quantity, quality, or the price of the material things we gave each other. On the contrary, His is a way of peace, service, and relative indifference to the material aspects of our very short life here on earth. He tried to teach that a life well lived is a life of service, peace, contentment, and giving of one’s self and one’s time.
The way we celebrate Christmas is beyond sacrilege; it is a figurative slap in the face of the One whose birthday we supposedly celebrate. Everyone is appalled at the death of the Wal-Mart employee on Long Island on what is called “Black Friday,” a title that is telling enough of the monikers we have assigned to our various days of purported celebration of the birth of our Savior. But that death, as tragic as it is, is only a reflection of what Christmas has become: a money-grubbing, anxiety causing, stress inducing self-indulgent, my fellow man be damned debauch that smears the very name of the One whose birth we celebrate. Jesus has become at best an afterthought in the weeks (fast becoming months) long bacchanal we insist on calling Christmas.
Since we as a society have insisted on perverting the celebration of Christ’s birth to a point far beyond recognition and even caricature to the point of outright defiance of His message to and wishes for us, please don’t call this time of the year Christmas. Call it the Holidays. Call it the Winter Celebration. Call it whatever you want, as long as Christ’s name is kept out of it.
Consecrate the name of Christ for true Christmas, the living of His message of service, love, and peace, a Christmas that should not be restricted to the end of December, which, as most of you, was not the time of His birth but was chosen to counter the Roman feast of Saturnalia or winter solstice. Go to Christmas Mass or Christmas services. Sing and enjoy Christmas carols and hymns, prayers, and vespers. Take special care of those less (or even more) fortunate than yourself. Celebrate the birth of Christ and of His salvation. But go to Holiday sales and Holiday parties and sing and/or try to choke down vapid and tawdry Holiday songs like the especially odious “Have a Holly Jolly (Profanation),” “I Saw Mommy Kissing Santa Claus,” or “Jingle Bell Rock.” What on earth do these brazen and insipid “Holiday” celebrations have to do with the birth of Christ?
Keep Christ in Christmas, but keep Him far away from “The Holidays.”
Tuesday, December 2, 2008
“WELCOME TO THE WORLD OF GENTLEMEN, GENTLEMEN”
12/2/08
As I write this, the CEOs of the Big 3 automakers are reappearing before Congress asking for a taxpayer bailout. As those who follow the news will recall, these three first appeared a few weeks ago and were sent home with a homework assignment, i.e., concoct a plan for saving these American industrial bulwarks and leading them once again to prosperity. The plans from the various companies will probably include cuts in executive pay packages, elimination of brands, importing of fuel efficient vehicles, or vehicle designs, from foreign operations, improving the fuel efficiency and/or eco-friendliness of the fleet, further concessions from the UAW, etc. These plans should be interesting, as, of course, should be the outcome of the meeting. But that is not the point of this particular post.
While the Big 3 grovel and debase themselves before the self-styled doyens of all public endeavor who occupy Capitol Hill, Wall Street already has its oversized share of the public dole, all of which was garnered without so much as a hint of a “plan” to emerge from its self-inflicted near death experience. Wall Street has only had to complain of the financial equivalent of a bad case of the flu and our public servants, whose “campaign funds” have been generously larded with largesse from the free marketeers on Wall Street, have hopped to attention, shoveling your dollars into these poorly managed enigmae at a pace that reminds one of nothing so much as Flash Gordon and Dr. Zarkov shoveling coal into the furnaces that provided the energy to the beam that supported the city of the Hawkmen after our heroes were captured by the evil Prince Vultan.
So, courtesy of you, the taxpayer, the good times will continue to roll on Wall Street. Oh, they won’t roll for the shareholders of these Wall Street icons, or for the “ordinary” employees of these financial Hoover devices. However, for the actual “producers,” those financial savants who devised the schemes, and who sold and traded the progeny thereof, that brought these once venerable financial institutions, and the world financial system, to the foyer of Hades, will continue to receive pay packages which, though perhaps not at the completely inconceivable and unconscionable levels that once characterized the most overpaid industry in the long history of our planet, will still be at a level that the average person can only begin to imagine in the most ecstatic and fleeting of his dreams.
And so I have a modest proposal…
With the Big 3 looking for a bailout after Wall Street has already received what I suspect will only prove to be the first installment of its bailout, why not require those who have been saved on Wall Street to purchase their next round of toys from the Big 3?
For example, rather than let the CDS salesperson round out his West Coast fleet of Ferraris with another 430 Scuderia, require him to buy a new Corvette or Viper. Rather than let that denizen of Wall Street outfit her second Hamptons home with, say, a Lexus RX, require her to purchase, say, a Caddy SRX. Instead of letting the wunderkind CDO trader trade in his tired old 2008 S-Class on a 2009 S-Class, he ought to be made to purchase, say, a Caddy STS or Lincoln MKS. Make the new Wall Street CEO, fresh from his most recent gig in Washington, forgo the Bentley Arnage for the equally tasteful Chrysler 300C, or perhaps Cerberus can dust off those plans for a new Imperial to serve this newfound demand for mindless ostentation. And when the big time partner wants to give his daughter, say, a 335i for her 16th birthday, perhaps he should be required to purchase her a CTS. With all the money this new welfare class spends on motor vehicles, such a program should fix up the problems in Detroit in a proverbial jiffy.
Oh, yes, this will require sacrifice on the parts of those blameless Wall Street victims who clearly deserve a bailout after having had so many unfortunate, thoroughly unforeseen and, completely, of course, out of their control, events render them helpless victims of the worldwide financial crisis. But if those lazy, overpaid layabouts who work in the car factories that dot the Midwest are going to have to take massive pay cuts (Doubtless, given enough time and federal money, the mavens of the Street could probably prove that it is these blue collar no-accounts who got us into this trouble in the first place, but I digress. At least I do so parenthetically.), Wall Street must be made to make similarly painful sacrifices. It’s only fair.
As I write this, the CEOs of the Big 3 automakers are reappearing before Congress asking for a taxpayer bailout. As those who follow the news will recall, these three first appeared a few weeks ago and were sent home with a homework assignment, i.e., concoct a plan for saving these American industrial bulwarks and leading them once again to prosperity. The plans from the various companies will probably include cuts in executive pay packages, elimination of brands, importing of fuel efficient vehicles, or vehicle designs, from foreign operations, improving the fuel efficiency and/or eco-friendliness of the fleet, further concessions from the UAW, etc. These plans should be interesting, as, of course, should be the outcome of the meeting. But that is not the point of this particular post.
While the Big 3 grovel and debase themselves before the self-styled doyens of all public endeavor who occupy Capitol Hill, Wall Street already has its oversized share of the public dole, all of which was garnered without so much as a hint of a “plan” to emerge from its self-inflicted near death experience. Wall Street has only had to complain of the financial equivalent of a bad case of the flu and our public servants, whose “campaign funds” have been generously larded with largesse from the free marketeers on Wall Street, have hopped to attention, shoveling your dollars into these poorly managed enigmae at a pace that reminds one of nothing so much as Flash Gordon and Dr. Zarkov shoveling coal into the furnaces that provided the energy to the beam that supported the city of the Hawkmen after our heroes were captured by the evil Prince Vultan.
So, courtesy of you, the taxpayer, the good times will continue to roll on Wall Street. Oh, they won’t roll for the shareholders of these Wall Street icons, or for the “ordinary” employees of these financial Hoover devices. However, for the actual “producers,” those financial savants who devised the schemes, and who sold and traded the progeny thereof, that brought these once venerable financial institutions, and the world financial system, to the foyer of Hades, will continue to receive pay packages which, though perhaps not at the completely inconceivable and unconscionable levels that once characterized the most overpaid industry in the long history of our planet, will still be at a level that the average person can only begin to imagine in the most ecstatic and fleeting of his dreams.
And so I have a modest proposal…
With the Big 3 looking for a bailout after Wall Street has already received what I suspect will only prove to be the first installment of its bailout, why not require those who have been saved on Wall Street to purchase their next round of toys from the Big 3?
For example, rather than let the CDS salesperson round out his West Coast fleet of Ferraris with another 430 Scuderia, require him to buy a new Corvette or Viper. Rather than let that denizen of Wall Street outfit her second Hamptons home with, say, a Lexus RX, require her to purchase, say, a Caddy SRX. Instead of letting the wunderkind CDO trader trade in his tired old 2008 S-Class on a 2009 S-Class, he ought to be made to purchase, say, a Caddy STS or Lincoln MKS. Make the new Wall Street CEO, fresh from his most recent gig in Washington, forgo the Bentley Arnage for the equally tasteful Chrysler 300C, or perhaps Cerberus can dust off those plans for a new Imperial to serve this newfound demand for mindless ostentation. And when the big time partner wants to give his daughter, say, a 335i for her 16th birthday, perhaps he should be required to purchase her a CTS. With all the money this new welfare class spends on motor vehicles, such a program should fix up the problems in Detroit in a proverbial jiffy.
Oh, yes, this will require sacrifice on the parts of those blameless Wall Street victims who clearly deserve a bailout after having had so many unfortunate, thoroughly unforeseen and, completely, of course, out of their control, events render them helpless victims of the worldwide financial crisis. But if those lazy, overpaid layabouts who work in the car factories that dot the Midwest are going to have to take massive pay cuts (Doubtless, given enough time and federal money, the mavens of the Street could probably prove that it is these blue collar no-accounts who got us into this trouble in the first place, but I digress. At least I do so parenthetically.), Wall Street must be made to make similarly painful sacrifices. It’s only fair.
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