Monday, February 22, 2010

“…THE CAR PAYMENT…THE HOUSE NOTE…”

2/22/10

I highly recommend reading Jon Hilsenrath’s article on page A2 of today’s (i.e., Monday, 2/22’s) Wall Street Journal entitled “Low Inflation Always Best? Some Urge a Policy Rethink.” In this article, Mr. Hilsenrath reports that some economic “thinkers” are proposing ramping up inflation (but just a tad, of course) for a number of reasons, mostly to give the Fed room to work its interest rate reducing magic when economic conditions call for monetary ease. But, as Mr. Hilsenrath reports

“There are other reasons some would welcome a little more inflation now. Governments in the U.S. and elsewhere, and many U.S. households, are sitting on mountains of debt. A little more inflation could in theory reduce the burden of servicing and paying that off…”

So, according to the financial solons who counsel more inflation, savers should have their savings inflated away in order to make it easier for politicians to blow other people’s money and spenders to live beyond their means. Senior citizens should have the nest eggs they have painstakingly accumulated over years of savings and self-denial debased in order to make it easier for younger generations to pursue lifestyles well beyond the dreams of their parents and grandparents and to do so with money they effectively borrow from their parents, grandparents, and, of course, the Chinese and other countries whose patience with our spending habits is about spent.

And people wonder why people don’t save in this country. In addition to the debasement of the national character that has been the hallmark of the last twenty or thirty years and that is reflected in extravagant, showy, and silly lifestyles, public policy is geared toward making it easier to borrow and spend and less rewarding, and more difficult, to save and invest. (See my other post of today, WHAT’S THE NOTE ON THAT?). Those of us who save are punished, those of us who spend are rewarded.

Our economy, and our society, is doomed.

WHAT’S THE NOTE ON THAT?

2/22/10

Today is the day that various credit card regulations, which passed Congress last year, go into effect. Without going into a lot of detail, the regulations block or obstruct banks and credit card companies from imposing fees, especially overcharge fees, on their customers. The regulations also require fuller disclosure, which would be a much better idea if consumers actually read their disclosure statements, and also generally make it more difficult for credit card issuers to, to use a technical term, screw their customers.

It’s awfully hard to defend the credit card issuers. There is little doubt that they have behaved immorally, or at least amorally, and reprehensibly. However, this is a classic case of it taking two to tango. Any consumer that feels taken advantage of can simply switch to another issuer, or, horrors, pay off his credit card and refrain from using it, reverting to the quaint old custom of saving money and paying cash when one wants to, to use a term the credit card companies use so elegantly and ubiquitously, “obtain” something.

What! Pay off one’s credit card! Why, that’s impossible, enlightened types might protest. However, it’s only impossible to pay off one’s credit card if one used that credit card to buy things one could not afford. And, while this might obnoxious to some, if you can’t pay cash for something, you can’t afford it, by definition, despite current wisdom that holds that you can afford something as long as you can make the payments on something.

Essentially, legislation like this, designed to rain retribution on those evil banks and credit card companies, does little more than make getting in over one’s head easier, unless, of course, the banks do what they threaten, and what would ultimately be the right thing, and pull back on credit card issuance. In all likelihood, though, banks will make unsecured lines of credit (i.e., credit cards) just as available but more expensive. And consumers will pay the fees because they simply “can’t live” without their credit cards. To a certain extent, this is true; one can’t rent a car or a hotel room, in many instances, without a credit card. But one can always pay cash, or use a debit card, for the hotel room or car that one has reserved with a credit card. Or one could simply use one’s card for convenience and reward points and, miracle of miracles, pay off one’s balance each month, thus converting a credit card to a charge card. Those who argue that such an approach to credit is impossible are wrong, of course. There are many of us who use our credit cards in just that manner. Those who defend constantly running balances, and thus exposing one to the tender mercies of the credit card companies one purports to loathe, will doubtless trot out someone who had to run up huge balances due to some medical or other emergency. There are indeed such people out there, but if all of our credit problems arose because of medical or other emergencies, we would have no credit problems; such folks make up a very small percentage of those in credit trouble. Most people who are in credit trouble are there through all the fault of their own.

It’s very popular to blame one’s credit problems on one’s creditors. But to do so is akin to blaming the train for one’s death when one lies down on the railroad tracks.

Friday, February 19, 2010

THE HALL OF OVERUSED (AND OUGHT TO BE RETIRED) WORDS (AND EXPRESSIONS)

2/19/20

In my 2/17/10 post, I stated:

“Out of the stories of Toyota’s problems with accelerators, brakes, steering, etc. come two words that have joined such tripe as “actually,” “awesome,” “whatever,” and countless others in the Hall of Overused (and Ought to Be Retired) Words, which should become a regular feature of the Pontificator.”

While I thought that it was highly likely, and advisable, that these reflections on the abuse of the language and the thought process become a regular feature of the Pontificator, I had no idea that the second edition, albeit with the addition of the modifier “(AND EXPRESSIONS), would arrive so quickly on the heels of the original suggestion. However, the President of the United States himself has given me occasion to produce the second edition of this now regular feature of the Pontificator.

Speaking in Las Vegas today, President Obama stated that “he will not rest until the nation is not only recovering but thriving.”

Oh really. So we’re supposed to believe that the president will not lie down and relax, let alone take a nap or retire for the night, until the economy is recovering. Of course we aren’t. But this “will not rest” business is one of those expressions, like the odious “never give up” (See my 2/14/10 post, ANOTHER ASININE PIECE OF MODERN “WISDOM”) that seems to have wormed its way into our speech and thought patterns simply by process of empty-headed repetition. Yes, I know it’s only an expression, but that doesn’t make it any less idiotic.

At least the President didn’t say that he “literally will not rest” until the economy is once again robust.

Wednesday, February 17, 2010

THE HALL OF OVERUSED (AND OUGHT TO BE RETIRED) WORDS

2/17/10

Out of the stories of Toyota’s problems with accelerators, brakes, steering, etc. come two words that have joined such tripe as “actually,” “awesome,” “whatever,” and countless others in the Hall of Overused (and Ought to Be Retired) Words, which should become a regular feature of the Pontificator.

The first is “crisis.” Toyota’s problems are described as a “crisis” or a series of “crises.” This word is not new to overusedom, but this is the first time I have taken the opportunity to opine in the Pontificator on its overuse. It seems that, in today’s society, anything that causes any degree of pain or discomfort, even transitory pain or discomfort, is a “crisis.” In my nearly 53 years on the planet, the world has experienced perhaps two genuine crises. One was the Cuban Missile Crisis, in which the world was nearly incinerated due to miscalculations and a need to prove one’s mettle, or testicularity, on both sides of the issue. One, maybe, was the 1973 Oil Crisis, born of the OAPEC oil embargo. Cut off from a major source of oil, the West’s energy hog (at the time) economy, or economies, nearly collapsed. But that’s about it as far as genuine crises go. That relatively minor inconveniences are now labeled “crises” says more about the increasingly pusillanimous nature of our society than it does about the language.

The second overused word highlighted by Toyota’s difficulties is “transparency.” This may or may not be a case of misuse; I am not sure if greater “transparency” is needed, though I tend to doubt that it is. Not everyone needs to know what everybody else is doing. Businesses don’t have to tell their customers, their potential customers, and Congress everything; indeed, to do so would be a disaster. Even governments don’t have to tell everyone everything they are doing, and politicians should not feel compelled to reveal every detail of their private lives to constituents, present and potential. But perhaps Toyota could benefit from a little more transparency; I truly don’t know. But “transparency,” whether rightly or wrongly used, is surely overused.

“DOIN’ WHAT COMES NATURALLY…”

“DOIN’ WHAT COMES NATURALLY…”

2/17/10

GOP Braintrust Sarah Palin is complaining about Fox TV’s “Family Guy”’s below the belt attack on her family. In an episode of this particular manifestation of the imbecility that permeates prime time television, a character meets another character with Down Syndrome. The character with Down Syndrome states that “My dad’s an accountant, and my mom is the former governor of Alaska.” Palin calls the episode “another kick in the gut.” Agreed. Palin’s daughter Bristol calls the show’s writers “heartless jerks.” Also agreed, only much more strongly. This was a kick in the gut delivered by heartless jerks to the Palin family and to all people with Down Syndrome and their families.

But, beyond the obvious, two things are salient in Palin’s reaction. First, the Facebook post in which Palin justifiably excoriated Fox was entitled “Fox Hollywood—What a Disappointment.” A “disappointment”? What was Alaska’s first quitter expecting from Fox? Opera? Ballet? An intelligent discussion of the relative merits of Keynesian and monetarist economics? How can Fox, a purveyor of pure, unadulterated porcine excrement, possibly disappoint anyone? For that matter, how can any network, all of which are purveyors of the intellectual equivalent of undigested, yet excreted, cotton candy, disappoint in its prime time fare? Just about everything on television is pure crap. To call prime time network television, and especially the slop on Fox, sophomoric is an insult to second year high school students. That Sarah Palin is “disappointed” when American broadcast television, and especially Fox, does what it does, and what the “most sophisticated, best educated generation in American history” apparently demands, says a lot more about Sarah Palin’s level of intellectual curiosity and cultural literacy than it does about Fox or about network television. In this sense, one can hardly doubt Ms. Palin’s claim that she can identify with her electorate.

Second, Sarah Palin works for Fox. She has a high paying gig in which she spouts talking points she just recently learned how to pronounce. Will her employer’s shameful treatment of her child and others like him cause this woman, who has built much of her political career on her concern for her family, to quit? Didn’t think so.

Tuesday, February 16, 2010

“(BAYH) THE BANKS OF THE WABASH…”

2/16/10

And old (and new) friend, a fellow alum of the legendary and storied St. Ignatius, asked me my opinion of Evan Bayh and his sudden decision not to run for reelection. I got a little carried away in my reply, so I thought I’d post it as a blog entry:


Evan Bayh is the son of the legendary Birch Bayh, an old fashioned, deal making moderate to conservative Dem senator (though probably more liberal than his son has been) from Indiana, but Evan has surpassed his father in political accomplishments, having been governor and senator for (I think) three terms. He’s been a good senator, a fiscal conservative, at least relative to members of his caucus and many members of the other caucus, and, for those who consider this a big issue (I consider it a big MORAL issue but not so big a POLITICAL issue, but that is another discussion.), quite pro-life for a Democrat. The Senate will miss him.

A long time ago I met Evan Bayh at a lunch at the Union League Club. He and I had a chance to talk one on one for quite a while. I was amazed not only at his level-headedness but also at his soft-spokenness, both quite unusual for a politician.

That having been said, I wonder why he dropped out so late. While it is admirable, in my estimation, to not make a career out of political office, the timing was erratic. Why so late? He may have destroyed his chances of getting on a national ticket if his ill-timed exit and the consequent scrambling for a candidate results in the GOP picking up the seat, as looks like the case. So if running full time for president was his aim, he has hurt himself, probably quite profoundly. However, it is awful tough to unseat an incumbent of your own party in the primaries (Ask Danny Hynes.), so I doubt if that was his goal. Perhaps he is being sincere. He’s a politician, though, so that would appear to be a last resort alternative when speculating on his motivations.

Of course, Bayh’s exit bodes well for those who think like me. No, not Republicans (I am NOT a Republican, though I usually take a GOP ballot.), but fans of divided government. If the government is paralyzed, the citizenry stands a chance. Note that the last time we experienced a balanced budget, or at least the last time we went from deficit to surplus (The surplus may have endured into Bush’s early years; I just don’t remember and don’t have time to look it up right now.), it was during a period of divided government. Divided government is good; probably not good enough to get me to vote for the odious Mark Kirk, but good nonetheless, and that is another issue.

I don’t make political predictions, but even if I were to be so silly as to engage in such prognostication, I would not be opining on the chances for a second Obama term this early. He’s certainly having a rough time of it of late, and I never believed he was as smart and politically attuned as advertised. He looks like a kid in WAY over his head right now (Such a trait is becoming rather characteristic of U.S. presidents of late.), but there is a lot of time between now and 2012, and you can’t beat somebody with nobody.

Sunday, February 14, 2010

ANOTHER ASININE PIECE OF MODERN “WISDOM”

2/14/10

My wife and I caught a large portion of the Olympic opening ceremonies on Friday night, after returning from our daughter’s Naperville North basketball banquet. Since we are officially a society that substitutes “gee whiz” special effects for cultural achievement and deep, or any, thought, I am sure that the opening ceremonies were deemed by most a dazzling success. Even I’ll admit, if somewhat begrudgingly so, that some of the show was quite breathtaking.

One thing that especially struck me about the opening ceremonies had nothing to do with the electronic display of computer generated wonder. After most of the techno-excitement had died down, we were subjected, as we all usually are, to speeches by a couple people who simply don’t know when to quit. Like most speeches, homilies, Masses, ceremonies, services, etc., these speeches were about 40% too long. However, one wonders if, even had the speakers shown the courtesy to cut it off at after a decent length of time, these particular speeches would have been tolerable. One thinks not. One especially idiotic comment one of the speakers made, though, was a repeat of one of those especially grating, and patently false, admonitions that seems to have become holy writ simply by means of endless, mindless repetition. This particular piece of drivel was the observation that a good Olympic athlete “never gives up.” As is always the case when that comment was made, the crowd went crazy.

Hmm…Never give up? The utter inanity of that advice can be exposed from a number of angles in a number of facets of life.

Suppose that the Japanese and the Germans, in World War II, had followed that tired old chestnut. How many people would have had to die to bring that conflict to a close? Moving backward in history, what if the South had not given up, as many, including, reportedly, Confederate President Jefferson Davis, were counseling in the final days of the war, but instead had pursued guerilla action in the hills? What would have become of our country? Fortunately, Robert E. Lee had the good sense not to follow the gormless “never give up” fluff.

In modern politics, suppose that every candidate found it a badge of pusillanimousness to give up. No one would ever drop out of the presidential nominating contests; the primaries would remain crowded with dead to the world, hopeless candidates. Those who consider it especially virtuous to “never give up” would, even in the general elections, demand endless recounts, sealing our government and political system in the amber of faux and mindless perseverance forever. (Hmm…perhaps never giving up isn’t such a bad idea after all.)

In business, products that no one wants to buy would stay on the shelves forever; after all, we are never supposed to give up, right? New Coke, Modern Coke, or whatever that marketing abomination was would still be there, sitting on the shelves, and the old, and current, formula, of Coke would be gone forever. Whenever a company came into play, none of the bidders would ever go away. The attention of the people in charge of both the pursued and the pursuers would never get to focus on running their businesses again; court fights, proxy fights, demonstrations, etc. would be the order of the day. Never give up, right?

When I was a much younger man, I was a huge fan of boxing, an enthusiasm I picked up from my dad, who was the most knowledgeable boxing observer I have ever known. What if every boxer somehow found it less than manly to give up? What would we have? A lot of dead young men. Remember, Rocky was only a movie. If it were reality, the first fight with Creed would have been stopped in the third round, or Rocky Balboa would have died in the fourth or fifth.

The reader gets my point. “Never give up” is one of those moronic expressions, like “Be optimistic” that we just accept without thinking. If one challenges such vacuous expressions, one is accused of all manner of nefarious motives and mindsets, as are most people who actually stop to think nowadays. But the reality, indeed the necessity, is that we give up when the benefits of continuing are overwhelmed by the costs of doing so. We give up when it is pointless, and hopeless, to continue. To do otherwise is thoughtless, dangerous, and potentially fatal.

Wednesday, February 10, 2010

“I AIN’T GOT TIME TO DISCUSS THE WEATHER, OR HOW LONG IT’S GONNA LAST…”

2/10/10

As I gaze out the window of my office looking at the few inches of snow (maybe six) in what “might be the world’s winter’s worst storm,” (Chicago Sun-Times, 2/10/10), I am reminded of a perpetual complaint that I, and many, have about how our media cover the weather. It seems that whenever we have more than a light dusting of snow in the forecast, we get reports that sound something like this:

Oh, my God, the worst disaster in human history is about to befall us. Snow, snow, and more snow. If you absolutely must travel, take public transportation, but only if getting to where you’re going is a life and death situation. If that is not the case, please, for the love of God, stay in your home, barricade yourself in the basement, because the big one is coming. Better yet, if you have a relatively painless way to do the job, why not just kill yourself right now and spare yourself the inevitable agony that nature is about to mete out?

Almost invariably, such alarmism is followed by a few inches of snow, easily removable with a shovel. The streets are fine, other than the idiots who, despite having lived in wintry climates their whole lives, seem to have not even the remotest idea of how to maneuver in the white stuff. Such people seem to have the notion that the best way to approach icy pavement is to hit the brake, hard, every twenty feet or so, and to be especially enthusiastic in the use of the brakes when they hit ice patches or when they see someone in a ditch who doubtless ended up in the ditch by hitting his brakes, hard, on an ice patch. Other than clueless drivers (who, mysteriously, seem to have a penchant for big, tough SUVs…hmm), everything is up and operating. Life goes on.

One would think such hysteria is a mere annoyance, or even a source of amusement as we hear the earnest, yet apparently easily excitable, announcers and writers do their best imitation of Herb Morrison, who left us with his immortal account of the Hindenburg disaster for WLS (“Oh, the humanity!”). However, there is more at stake here; based on the breathless accounts of people looking for a story, plans are canceled, business is not done (Note Southwest canceling all its flights out of Midway from 10:00 AM yesterday (Tuesday, 2/9/10) to 10:00 AM today.), and schools are closed or scheduled for late arrival, thus shortening our already short school days and/or years. Further, we have the “Boy Who Cried Wolf” syndrome. Sensible people, like yours truly, after years of being pelted with false alarms of impending doom at the hands of Old Man Winter, simply ignore the reports and go about our business. If it really does get bad one day (I can remember two storms that can be classified as “bad” in my nearly 53 years on the planet, most of which were spent in Chicago or its environs: the “Big One” in ’67 and the Bilandic/Byrne perfect storm of ’79), we will, in all likelihood, be caught flat-footed. We, assuming that the reports of imminent disaster are just so much alarmism, will end up doing things and going places that we ought not, and that could result in genuine disaster.

Note that I am not indicting the meteorological profession. Meteorology is an inexact science at best, and weather people, even the few actual meteorologists assigned to cover the weather can, and routinely do, get it wrong, but that’s understandable. No, this is not a complaint about weather forecasting; it is a complaint about weather reporting. Reporters, whether weather reporters or news reporters, always in search of readership and viewership, routinely take weather reports, even comparatively innocuous weather reports, and blow them way out of proportion, inducing completely unnecessary, indeed dangerous, panic.

The sensible among us yearn for the day when the weather report will come down to something like this:

We’re going to get some snow tomorrow, maybe lots of it. But this is Chicago after all, and it’s winter. It snows here in winter. It also sleets and gets very cold here in winter. So either get out and deal with it or move somewhere else. And, please, don’t drive like a jerk. If you still don’t know how to drive in the winter, either stay home, get someone to give you a ride, or take public transportation if you are one of the relatively few in our area with access to realistic public transportation. Please don’t assume that, because some idiotic commercial that induced you to buy your SUV or other all wheel drive vehicle shows a vehicle much like yours plowing through the snow like an Olympic skier, your vehicle can compensate for your pitiable driving skills. Please don’t go out there and make the roads more dangerous for those of us who know how to handle the weather. Thank you. Enjoy the winter weather; it is one of the joys of living here and, even if you don’t think so, it will make the Spring that much more glorious.

Note that dreaming of such straightforwardness, while it has its flaws, is infinitely more productive than heeding the advice the media dispense regarding winter weather.

INGESTING THE FINANCIAL HEMLOCK

2/10/10

Late last week and early this week, reports that Greece was in serious fiscal trouble, perhaps on the verge of default on its sovereign debt, rattled the markets. Rumors that Greece was not at all unique, that much of the southern tier of the Eurozone (at least Portugal and Spain, in addition to Greece) might be next resulted in what most of the media types and financial experts, never having seen real panic, would call panic.

The permabulls among us at first told us not to worry. Even though French banks hold $75 billion of Greek sovereign debt, German banks hold $43 billion of Greek sovereign debt, and other foreign banks hold, collectively hold another $185 billion of Greek sovereign debt, Greece is, after all, a small country that, in the great scheme of things, doesn’t matter much from a financial perspective.

Now the news has (Surprise!) suddenly changed. The same bulls who told us that Greece was no problem due to its diminutive size now report that the EU, at the behest of Germany, is leading a charge to guarantee Greek sovereign debt.

Hmm…

Greece is inconsequential from a financial standpoint, yet it is imperative that the EU intervene to prevent Greek sovereign default. One can only conclude that it’s now official: Everyone gets a bailout. It doesn’t matter if Greece is quantitatively financially inconsequential. It doesn’t matter that Greek debt in the vaults of the banks of the Old World was purchased by supposedly sophisticated (Ironically, the English word “sophisticated” comes from the Greek word “sophista,” which originally simply meant “instructor” but which eventually came to mean an instructor who, while professing to dispense wisdom and knowledge was instead dispensing specious “logic” and other intellectual tomfoolery, hence the English word “sophistry.”) investors seeking more yield in a money hungry world, people whom are sometimes called “yield pigs.” Greece gets a bailout.

And why not? Everyone else has gotten a bailout. The banker who managed to bring down his venerable institution by stuffing its portfolio with “investments” that he clearly did not understand. The homeowner who bought far too much house for his income. The entitled consumer who “just had to have it” (“It” being the latest gimcrack that represented only the latest attempt to fill the emptiness of his or her life with ephemeral material trappings of happiness and genuine wealth.) despite not having the money to pay for it. All the other governments that got in over their heads due to the inability of their “leaders” to say “no” to an electorate that equates “democracy” with a means to seize the accumulated wealth of other people. The industrial company that badly misread its market and could not say no to the outrageous demands of its workers, union or otherwise. The list goes on and on. Everyone else has gotten a bailout, why not Greece?

And we sit here and wonder why people engage in financial behavior that is ruinous to themselves and their families, to our once great nation, and to the whole world.

Two additional notes:

First, Greece’s budget deficit is expected to amount to 13% of its GDP, thus bringing it to the threshold of financial ruin. Our budget deficit should come to about 11% of GDP this fiscal year. That’s right…only 2% separates us.

Second, one of the reasons Greece is running such an immense budget deficit is that its underground economy is so huge, estimated at about 25% of GDP. People in Greece do a large measure of their business “off the books” to avoid taxation. (This phenomenon is by no means unique to Greece, but seems to be induced by something in the warm waters of the Mediterranean. Spain, Portugal, and Italy all have underground economies that comprise about 20% of their GDPs.) What is the Greek’s government’s response, then, to its fiscal problems? It is raising marginal tax rates on people making more than the princely sum of about $55,000 per year. It is eliminating “loopholes” and special rebates. It is increasing taxes on dividends and on offshore companies doing business in Greece.

Hmm…

Wouldn’t it be logical to conclude that people sensibly opt to do business off the books because tax rates are too high and the tax code too complicated? Wouldn’t it make sense, then, to reduce tax rates and simplify the tax code to the point at which it no longer paid to evade taxation? If tax rates are low enough, and the tax code simple enough, people will no longer have sufficient incentive to go through the often complicated process of evading the tax man and thus will do business that was formerly conducted in the black, or underground, economy in the above ground, if you will, economy, thus exposing that activity to taxation and generating additional revenue for the government. Wouldn’t it thus make sense for the Greek government, and a lot of other governments, to reduce tax rates if it wants to generate more revenue?

Monday, February 8, 2010

WOULD YA BE GOIN’ TO PADDY AND DANNY’S?

2/8/10

So Scott Lee Cohen has dropped out of the Lieutenant Governor’s race, as most people expected, in a news conference as fittingly bizarre as the rest of the man’s life. Before we say good riddance, we ought to thank the guy both for the few days of entertainment he has provided us and for shining the spotlight on the consequences of an ill-informed, indifferent, prime time TV addled electorate that votes on the basis of campaign commercials. No wonder these guys spend so much money on campaign ads—they work when the electorate is essentially clueless. But I digress.

Now comes the time for the Illinois Democratic Central Committee, and its chairman, Mike Madigan, to pick a successor. The obvious choice is Art Turner, a state rep from the west side who came in second to Mr. Cohen in the primary for lieutenant governor, four percentage points behind in a crowded field. But now there is talk of asking Comptroller Dan Hynes, who unsuccessfully challenged Governor Quinn for the gubernatorial nomination but put quite a scare into the Governor, to run for lieutenant governor. I don’t make political predictions (See my 2/1/10 post ("YOU KNOW HOW THE PREMIER LIKES SURPRISES..."), so won’t say if Hynes will be made this offer or if he would accept such an offer if one is made. However, he is said to be receptive, but won’t pursue the nomination, which probably means he really wants the job but doesn’t want to, by actively pursuing the nod, eliminate any vestige of shame which remains in his makeup. I will say that running Hynes for lieutenant governor would be a very bad idea for a number of reasons.

First, how do you deny Art Turner the chance to run? He did come in second so he would seem to be the obvious choice. Further, while Toni Preckwinkle’s not just beating, but trouncing, Terry O’Brien for Cook County Board President may have shown, once and for all, that Cook County politics are, to use the current popular buzzword, “post-racial,” I doubt if we are sufficiently post-racial to render acceptable denying the nomination to a Black man who clearly deserves it in order to put another Irish guy into state constitutional office. Further, I think that Mike Madigan knows this and, given his position in the state party, doesn’t need to do anything that has the possibility of fomenting racial animosity or even controversy, especially over something as inconsequential as the LG’s office.

Second, Hynes has spent the last several months telling us that Quinn is an incompetent showboater and Quinn has spent the last several months telling us that Hynes is a self-serving lazy lout who just might be a racist. Now these two guys are supposed to run as a team? Yes, I know that’s politics, that former enemies in the primaries can be all kissy-face huggy-bear in the general, but that’s also the kind of shameless politics of which people are tired to the point of abject disgust.

Third, can any of these guys get a real job? If Hynes somehow does get offered the LG nomination and takes it, we would have to conclude that the guy is willing to take any position at the public trough in order to avoid the ignominy of actually having to go out and work in the real world of employment that does not involve running for office. This is especially appalling because, for a guy like Hynes, a “private sector” job would involve very little real work; he’d just have to sell his influence, contacts, and his small measure of star power, easy, richly remunerative work, just perfect for building up the old bank account while waiting until the next elective position opens. If Hynes is smart, he will take this very attractive opportunity his loss has presented him. If he is utterly shameless and incapable of facing the real world, he will take the LG slot on the ticket if it is offered him. I’m hoping he chooses the former, largely because I kind of like the guy and would like to see him in public office in the future, but with a measure of respect and integrity. I’m really hoping, and guessing (but not predicting, no sir), however, that the slot will not be offered to him.

Sunday, February 7, 2010

ALEXI’S LITTLE DIVIDEND

2/7/10

Making political predictions is always precarious, especially for me. (See my 2/1/10 post ("YOU KNOW HOW THE PREMIER LIKES SURPRISES..."). It is especially perilous to make predictions involving people like Democratic lieutenant gubernatorial nominee Scott Lee Cohen, who appears to have a rather tenuous grip on reality. So while it looks like Mr. Cohen will be “persuaded,” probably with generous offers of help in paying down campaign, and other, debts from the state Democratic Party, to leave the ticket, we can never be too sure.

But let’s assume that Mr. Cohen does drop out and the Dems nominate, say, Art Turner, as their candidate for lieutenant governor. That eliminates only one problem; the problem at the top of the ticket would remain. Alexi Giannoulias is going to present big difficulties for the Democrats, and most of those challenges do not involve his mistaken belief, shared by most Democrats, that Barack Obama’s election, and the installation of a Democratic congress in 2006, came about because the electorate yearns and pines for the full Democratic jacket of an always inclusive, all encompassing, Democratic womb paid for with the seizure of both their incomes and wages for distribution as Nancy Pelosi and Barbara Boxer see fit. The Dems are in control on the national level because the public was understandably and rightly repulsed by George Bush, who was, after all, only a minisculely milder version of Barack Obama, without the brains, the charisma, or the work ethic, but that is another issue. Assuming that the Dems’ victories in 2006 and 2008 were anything more than a backlash against the current leader in the “Worst President of All Time” contest is dangerous, but the Dems apparently fear no danger. But I digress.

There’s always time for one more digression, however, especially in the Insightful Pontificator. In his speech, when he was addressing HartMarx’s wanting to close one of its plants in Illinois and his (admirable) efforts to keep HartMarx here, Mr. Giannoulias used the expression “If you want to do business in Illinois….” and then listed a laundry list of political whims to which businesses must cater. What he should have said, and what he may have meant to say, was “If you want to do business with Illinois…,” especially because the pressure he, as State Treasurer, brought to bear on HartMarx involved influencing its banks through manipulation of state deposits. There is a HUGE difference between influencing people who want to do business with the state and bullying people who want to do business in the state. That young Mr. Giannoulias used “in” when he should have said “with” says a lot about Mr. Giannoulias’s view of the proper roles of government and business or of government and private economic players of any kind. And, no, I’m not picking nits...people’s choice of words means a lot, especially to those of us who spend so much time choosing words. But, again, I digress.

No, Mr. Giannoulias’s problems will arise not so much from his policy stances, which have proven to be quite flexible in any case, but, rather, from his family’s ownership of Broadway Bank and his deep involvement with the bank. Yes, there were the close and extensive relationships between the bank and Tony Rezko and the even more nefarious Michael “Jaws” Giorango, the Mob enforcer and massage parlor protector/owner turned real estate baron with the help of his friends at Broadway Bank. While those are problems, the GOP would do well to avoid dwelling too hard on things like financial double-dealing and involvement with shady characters in this one party state. The larger problem will turn out to be the $70m the Giannoulias family took in dividends from Broadway Bank in 2007 and 2008 in the wake of the death of Mr. Giannoulias’s father. Normally, one would say that the bank was the family’s bank and that the owners of the bank are entitled to take dividends from it. However, this particular bank is in serious trouble and may be on the verge of a government sponsored, and financed, takeover by a stronger financial institution, or, in other words, of a government bailout.

Alexi Giannoulias counters that many banks are in similar trouble, so what’s the big deal? For starters, would $70mm have helped shore up the bank’s capital base? Where did the $70mm, several million of which ended up in young Alexi’s pocket, go? Since money is a fungible commodity, it is not only fair, it is absolutely right, to say that some of it went to finance Mr. Giannoulias’s campaign for senator. So, connecting the dots, the taxpayers may wind up bailing out a bank that might have remained financially solvent were it not for a huge dividend, a portion of which financed a politician’s campaign for the Senate. Therefore, it looks very much like, if Broadway Bank is bailed out with taxpayer money, the taxpayers will have ended up financing young Alexi’s latest excellent adventure. While some people profess unbridled enthusiasm for public financing of political campaigns, I don’t think this is what they had in mind.

Thursday, February 4, 2010

AND ILLINOIS AIN’T READY YET, EITHER

2/4/10

One more thing that is notable about the recently completed (Dan Hynes just conceded as I write this.) primary for the Democratic gubernatorial nod is the complete and utter transformation of Pat Quinn (no relation) from noble outsider, burr under the saddle of the political Machine, and all around man on a white horse to comfy insider, water carrier for the political Machine, and all around man on the horse pulling the plow for the guys who matter in Chicago. It’s almost to the point at which if we put a bowler on Quinn’s (no relation) head and a cigar in his mouth, he’d bear a striking resemblance to Alderman Paddy “Chicago Ain’t Ready for Reform Yet” Bauler.

We already knew, long before the primary, that Quinn (no relation) rolled over on campaign reform legislation, tailoring the legislation to the wishes primarily of Mike Madigan but also to those of John Cullerton, if such wishes were distinguishable. (Note: Your truly is no fan of campaign “reform” legislation, but find such legislation especially contemptible when it serves only to provide political cover for those who are at least as equally opposed as I am to such legislation but lack the guts to admit it.) We also, as discussed in the Pontificator this week, knew of the $250,000 in contributions to Quinn’s (no relation) campaign from Ed Burke and the $100,000 contribution from former Senate President Emil Jones, two of Paddy Bauler’s spiritual (The term used very broadly here.) heirs. We also knew that Quinn (no relation) was the slated gubernatorial candidate of the Cook County Regular Democratic Organization, the Organization he built his career railing against, and that Quinn (no relation) supported the Chairman of that Organization, Joe Berrios, in his successful run for the Democratic nomination for Cook County Assessor.

What was especially indicative of Pat Quinn’s (no relation) complete metamorphosis from irritating gadfly to one of the boys was the composition of the crowd surrounding him at his concession speech. The media and the Quinn (no relation) campaign wanted us to focus on the appearance of his 92 year old mother. This was a great touch; Mrs. Quinn appears to be a wonderful woman, and she must be, given what Pat Quinn (no relation) said his mother and father told him: “Service to others is the rent we pay for living on God’s good earth.” What a great quote and wonderful sentiment, and I mean that in all sincerity and will strive to remember it the rest of my life. Seeing the apparently very hearty and healthy Mrs. Quinn on the podium, supporting her son in the moment of his greatest victory, was an inspiration to me and should have been to all of us. But while I was genuinely moved by Mrs. Quinn’s appearance on the podium, I was more interested in the others on the platform, including:

The aforementioned Emil Jones
Secretary of State Jesse White
Lobbyist, and former State Senator, Bill Marovitz
Congressman Bobby Rush
State Representative Lou Lang
Congressman Danny Davis

The only thing that could have made the above crowd more establishment, or insider, would have been the appearance of Ed Burke, Mike Madigan, and Rich Daley on the platform.

Pat Quinn (no relation) has learned, in his short tenure as governor, who is in charge in Springfield, and it isn’t he. We have learned, in Mr. Quinn’s (no relation) short tenure as governor, that genuine reformers do not come from the ranks of career politicians, even from the ranks of career “reform” politicians.

Wednesday, February 3, 2010

“KEEP COUNTING THE VOTES UNTIL THEY COME OUT THE WAY WE WANT THEM TO COME OUT”

2/3/10

A friend asked me what I thought of the Illinois primary results. I thought I’d put up an edited copy of my response as a post:


The only thing that really surprised me about the primary was the amount by which Toni Preckwinkle buried Terry O'Brien in the Cook County Board Presidency race; I thought she'd win, and I guess I'm happy she did, but I didn't think she'd bury the guy. Apparently, and thankfully, race isn't that big an issue in Cook County any more.

I guess I'm sort of surprised that it's between Brady and Dillard in the GOP race for governor. Brady was supposed to be a rather distant fourth place finisher and now he is ahead, albeit by about 500 votes. But when it was reported that the turnout was heavier (a very relative term) downstate than around here, it seemed logical that Brady would do better than expected. I'm not surprised Ryan folded. He's a nice guy (who seemed to come off as uncharacteristically bitter in his concession speech) whose time has come and gone. I'd like to see Brady win the primary; I could never support Dillard but could vote for Brady in the general.

I would have liked to have seen Hoffman win the Democratic senatorial nomination, but expected Giannoulias to win it. Besides his “You’d better do what we say or else” approach to government, Giannoulias comes off like a punk who bought his way into the big leagues with his father's money, displaying all the malodorous traits of that particular archetype. The GOP is going to make a HUGE issue, and rightly so, of Broadway Bank and Giannoulias’s close (though perhaps only in Giannoulias’s own mind) association with Obama. Hoffman would have been a stronger candidate for the Dems. I obviously can't vote for Alexi (Besides the above, it's just hard for me to vote for a Democrat for anything, unless it's alderman in, or mayor of, Chicago, and, technically, those races are non-partisan. Besides, since I don’t live there any more, that’s a moot point.) and would NEVER vote for Kirk. Kirk spent most of his time in Washington licking George Bush’s boots, and, suffering from a horrible case of Irish amnesia in any case, I vow never to forget those who so ardently supported the disastrous and despicable Mr. Bush. Looks like I'll cast my usual Libertarian vote in the general.

It was interesting to have seen Dan Burke (Ed’s brother) win his state rep seat, beating back his first challenge in the 19 years he has held the seat. The district is on the southwest side and includes the 14th Ward, the Burke family’s historic bailiwick, the borders of which have been shifting west, like some sort of political tectonic plate, for twenty or so years. The challenge came from Rudy Lozano, whose dad was murdered after an unsuccessful run for 22nd ward alderman in 1983. Lozano was the sentimental favorite in that race and had help from Alderman Ricardo Munoz in the 22nd. But Lozano and Munoz couldn’t overcome the Burke Machine, and Dan Burke’s admirable record of service to his Hispanic constituents, even in this heavily Hispanic (65%-85%) district. Very interesting.

It looks like we’re in for an interesting few weeks, at least on the GOP side. It’s hard to see how Hynes overcomes a 7,000 vote deficit, though stranger things have happened. Things will become more clear (and interesting) when I can see the ward by ward results, which I haven’t seen yet.

Tuesday, February 2, 2010

“I’VE GOT THE WORLD ON A STRING, SITTIN’ ON A RAINBOW, GOT THAT STRING AROUND MY FINGER…”

2/2/10


A cabal of native Southsiders has been puzzling over the reported $250,000 ($225,000 of which was forked over last week) contribution from 14th Ward Alderman and Committeeman Ed Burke to Pat Quinn. One of the group opined that perhaps the contribution was made because Burke could control Quinn but couldn’t control Hynes. My thoughts are below. The first paragraph has nothing to do with the topic at hand, but is at least as succinct of my philosophy of life as is the masthead of this blog:


It’s always good to see cynicism of any kind, monopartisan, bipartisan, or multipartisan. This optimism thing is much overrated and blinds us to the truth all around us.

I like our friend’s point on Burke’s ability to control Quinn, and a quarter million tends to get one’s attention. (But see two paragraphs hence.) Being able to control Quinn would come in especially handy when one considers that Quinn, should he be elected, would be the only hope for a counterweight against Mike Madigan. So Burke could be putting up the big dough either to counter yet another rival south side Irish committeeman (This could be yet another round in the old as history game of “Who has the biggest male member here?” Oh, sorry…we are talking Irishmen, so the metaphor falls short on a number of fronts.) or he could be making this generous contribution on behalf of a friendly south side Irish committeeman, just to make sure that Governor Quinn doesn’t get the strange notion that he somehow will be boss down in Springfield. I don’t know which, because I know nothing of Burke’s relationship with Madigan, though I know nothing that would indicate it is either overtly or covertly hostile. Note, too, that a big contribution from Burke probably looks bad enough for Quinn (which also may have something to do with its timing), but a big contribution from Madigan would look awful for Quinn. If this contribution is being made on behalf of, or out of friendship for, Mike Madigan, removing Dan Hynes as an obstacle to the gubernatorial ambitions of Lisa Madigan might also have something to do with it. On balance, though, I suppose that Burke fronting for Madigan here is a stretch, especially since we are talking about $250,000. This is the kind of money Nixon used to collect in suitcases from shady characters in places like Bimini and Costa Rica.

Still, this also could be a case of a quarter million looking big to us (and to most people), but not looking all that big to Burke, especially as he realizes he is getting older and there won’t be that many elections as big as this one in his lifetime. He might figure that he has this big pile of dough and this is the biggest thing he might ever see again.

A couple more things on our friend’s point about the relative ability to handle Quinn and Hynes. While I suspect it is true that Quinn would be more easily controlled than Hynes, one would never want to bet much of anything on one’s ability to control Pat Quinn. Harold was right when he made the observation that Quinn is something of a showboater and a loose cannon, and, believe me, Harold was probably not the first or last to make that observation. While, as I said above, a quarter million gets one’s attention, Quinn is quite enamored of himself and would resist control by anyone, even by someone capable of wielding that kind of dough; it would conflict with his self- and media- image.

To the extent that Quinn might be more controllable than Hynes, such relative pliability would not be attributable so much to anything intrinsically strong or resistant in Danny Hynes but, rather, the long line of potential controllers of Hynes with which any potential additional controller would have to contend.

Bad weather today…low turnout. Maybe some of the fringe candidates (Andrezejewski, Hughes) I perennially support actually have a chance. Naw, probably not.

Monday, February 1, 2010

THE BEST SPECTATOR SPORT OUR TOWN HAS TO OFFER

2/1/10

A friend asked my opinion on why Alderman and Committeeman Ed Burke of the 14th Ward, the dean of the City Council, is being so supportive of Pat Quinn (Reportedly, Burke, through his two political committees has contributed $250,000 to Quinn, including $225,000 given right after the now famous (or infamous) “Harold ad” ran.) One would guess that Burke’s well oiled 14th Ward Regular Democratic Organization, besides trying desperately to save Ed’s brother, Dan’s, political life in his state rep race, is turning out the vote for Quinn. Given that Burke is a south side Irish committeeman, and that Hynes’s dad, Tom, was a south side Irish committeeman, Burke’s support for Quinn might seem curious on its face. But I offered three explanations, which I reproduce here in condensed form:


--As the 14th has gotten more Black and Hispanic (It’s getting to the point at which the miracle of redistricting won’t work any more; the ward has moved progressively west over the years, but now there are not enough Whites to split between the 14th, 13th, and 23rd.), Burke has had to be more responsive to the desires of his minority constituents, and has done quite a good job of doing so. Note that the big money went to Quinn after the perceived slight toward the Black community embodied in the Harold ad. Burke’s muscular support of Quinn, then, especially after the Black community was slighted, in many eyes, by the Harold ad, might be yet another attempt by Burke to be sensitive to the desires of his constituents.

I, for one, think the Harold ad was BRILLIANT, not so much for its racial overtones but simply because it was right; Harold was a bright and insightful man. Even if he wasn’t, it would have been readily apparent that Pat Quinn was, and is, a showboat.

--Hynes, and the entire 19th ward power structure, is close to the 11th Ward power structure, i.e., the Daleys. Note that a 14th/11th rivalry existed long before the current Eddy Burke and Rich Daley. In 1953, when we had the McDermott/Wagner/Nash/Duffy faction fighting against the Gill/Daley faction for control of the Central Committee, the 19th Ward (Duffy/Nash) was allied with the 14th Ward (McDermott/Wagner). But, when Daley won that war after Wagner died in a car crash in Minnesota, the 19th Ward boys, displaying the nimbleness that characterizes most successful politicians, quickly changed sides and reaped the attendant rewards. The 19th has been allied with the 11th ever since. But the uneasiness between the 14th and the 11th continued, only with Eddy Burke’s dad, having replaced McDermott and the late Clarence Wagner, controlling the 14th and Rich’s dad (obviously) controlling the 11th.

And that rivalry didn’t die with the fathers. Note that it was the current Ed Burke who thought he was going to be Mayor after Harold. Note that it was Ed Burke who ran against Daley for State’s Attorney in 1980 and lost. Burke and Daley have always been, at best, uneasy allies. When the opportunity presents itself for the 14th to take a swipe at the 11th, or vice versa, with minimal collateral damage, that opportunity is usually taken. Burke's backing Quinn over Hynes might be one way of continuing the Cold War between the 11th and 14th, since the 19th, Hynes’s home ward, is perceived as being so close to the 11th.

--The Cook County Regular Democratic Organization has slated Pat Quinn for governor, so Burke might be being a good soldier or, in his case, a good general. That hardly explains $250,000, but it should be considered.

"YOU KNOW HOW THE PREMIER LIKES SURPRISES..."

2/1/10

I try not to make political predictions, simply because I’m not very good at it. As just the latest example of my utter inability to predict the outcome of a genuinely contested election, I was floored when Scott Brown won the Kennedy seat in Massachusetts. I think the last year in which I predicted a not eminently predictable election with acute accuracy was 1975, when I predicted, to the ward and within a few percentage points of the overall vote total, Richard J. Daley’s margin of victory in the Democratic primary over Alderman Bill Singer, the reform alderman who went on to make millions from his political connections, and a smattering of others (Dick Newhouse and Ed Hanrahan, if I recall correctly, but it doesn’t matter; Singer was the real challenger, if Daley ever genuinely had one of those after 1955, but I digress) for Chicago Mayor. So I try to avoid embarrassing myself by making political predictions. It is said that predictive ability is indicative of knowledge in any particular area; if that is true, I know nothing about politics. Since the latter clearly is not true, the former is suspect, but I digress.

So while I will make no predictions about tomorrow’s primary, I will point out several things that surprise me going into the election:

--Governor Pat Quinn (no relation) and Comptroller Dan Hynes are neck and neck in the gubernatorial primary. Given how difficult it is to unseat an incumbent of one's own party in the primary, I thought even an incompetent grandstander (Harold Washington was a very smart guy, by the way.) like Pat Quinn would bury any opponent and that young Mr. Hynes would follow his father’s example and drop out of the race, albeit at a more propitious time than his father, who dropped out a few days before the mayoral election in 1987 that pitted him against the aforementioned Mayor Washington.

--Terry O'Brien, the only White candidate for President of the County Board in racially charged Cook County, is, according to polls, running third in the race, far behind frontrunner Alderman Toni Preckwinkle and placer Clerk of the Circuit Court Clerk Dorothy Brown. He is ahead of only disgraced incumbent Todd Stroger. Note that O'Brien is not some kind of fringe candidate; he is president of the Water Reclamation District.

Why is Mr. O'Brien running so poorly? It can't be backlash against political insiders, of which Mr. O'Brien is a very salient example, down to his remarkable physical resemblance to Mayor Richard M. Daley. Such an explanation holds no water in this race; all four candidates are insiders, and see the below bullet point.

There are only two possible explanations for Mr. O'Brien's third place standing. First, perhaps Cook County's racial polarization is a thing of the past, or at least is ebbing. That would be a very good thing, and certainly things have gotten much better on the race relations front over the last several decades. Second, people are lying to pollsters, unwilling to admit they are voting for the White guy, which is construed in "better" circles as somehow intrinsically evil. While I place a very high value on honesty, lying to pollsters, especially to exit pollsters (not the case in this circumstance...yet) is admirable...it makes elections far more interesting.

--The voting public and the media have been yammering on and on about how they want to “change” things, are tired of “business as usual, “don’t want to “play the same old political gangs,” are sick of the “culture of corruption,” and want to free Illinois from the grip of “political insiders.”

So who’s neck and neck in the Democratic primary for governor? Pat Quinn (no relation) who has the endorsement of the Cook County Regular Democratic Organization and who has endorsed the nominal head of the same organization, Joe Berrios, in his race for county assessor against Judge Ray Figueroa, the type of guy who passes for a reformer in Cook County, and Dan Hynes, who is the son of former 19th Ward Committeeman and Cook County Assessor Tom Hynes and who enjoys the fervent backing of both major teachers' unions, who, with the obeisance of their lapdog political lackeys in both parties have played a major role in bankrupting this state.

So who’s about even in the Republican primary for governor? Kirk Dillard, who is a veteran state senator and former chief of staff of (Saints Preserve Us!) Big Jim Thompson and Jim Edgar, Jim Ryan, who is a former Attorney General, failed candidate for whatever office was available at the time, and a political retread who was a close associate and financial beneficiary of convicted felon (on various corruption related charges) Stuart Levine, and Andy McKenna, who was head of the Illinois Republican Party from 2005 to 2009 (aka “the Alan Keyes years”), four of the most futile years in Illinois GOP history, whose family has been involved in this state’s politics since statehood, it seems, and who tries to convince us that he is an outsider. With the possible, and only possible, exception of Mr. McKenna, finding three people more representative of the Republican branch of the combine that has run this state for decades would be impossible. The only genuine outsider in the race, Adam Andrzejewski, is far behind the cabal in the lead.

So who’s leading in the Senatorial primaries? Alexi Giannoulias, current state treasurer who has used money from his family’s bank, best known for its close ties to influence buyer and peddler Tony Rezko, and several less savory characters, to buy his way into this state’s political establishment leads the Democrats. Congressman Mark Kirk, who has been a Washington insider and Bush boot licker for his entire public life leads the Republican field.

You get the picture--people talk about how they are tired of the same business as usual but are about to nominate, and ultimately elect, shining standard-bearers of business as usual. I suppose this shouldn't surprise me, or anyone, for that matter; people often say one thing and do another. There are doubtless numerous psychological explanations for their tendency to do so, but I am not a psychologist. So I can only guess that people vote for the status quo while decrying the status quo because, in political matters, people are lazy and easily malleable. Rather than do the work necessary for self government, they go about voting for the guy with the best commercial, the largest number of signs, or whose name or concocted life story appeals to them. Not surprising, but damn scary.