5/28/10
While I probably cannot add anything especially insightful or fresh to the commentary on yesterday’s news that Ford decided to discontinue its Mercury division, perhaps adding a personal perspective can illuminate, or at least reinforce, some of the observations being made.
The execution of Mercury, which had survived even the unfortuitous timing of its founding (1939), was surprising only because it took so long. How Mercury survived this long, especially after Alan Mulally has cast aside so much other vestigial tradition to make decisions that were both obvious and necessary, is a mystery. It has been obvious for at least the last twenty years that just about every Mercury product was a gussied-up and, for the last ten years, not even all that gussied up, version of a Ford. Equipment, sticker prices, even looks were almost indistinguishable from their Ford counterparts. Just to clarify here, I am NOT saying that Mercuries are not good cars; they have been, like their Ford twins, outstanding products, usually at least one cut above those of their domestic rivals, and are getting better to the point at which they are about the equal of most of their “foreign” competitors. The problem is not that Mercuries are bad cars; the problem is that they are redundant cars.
My first car was a Mercury, a 1982 Lynx, grey with a red vinyl/cloth interior, five speed manual, an AM radio, and air conditioning. It was a great car for its time, but it was a clone of the Ford Escort. I really would have rather had the Ford Escort for two reasons: It was available in a shade of blue that was not available in a Lynx and I really liked the Ford emblem affixed to the back of the Escort. (That these were the points of distinction between the two cars for something of a car buff says a lot about Mercury’s demise.) I wound up buying the Lynx, however, because my buddy Paul Kuhn worked at his family Mercury dealership (Park Lincoln-Mercury, 18100 Woodward Avenue, Detroit), appreciated the business, and made me a good deal. Paul threw great parties, which were a very high priority for me in those days, and it was worth the very marginal sacrifice involved in choosing a Mercury over a Ford both to retain our friendship and continue being invited to his parties.
One of my favorite cars was also a Mercury, a 1998 Mystique, fully loaded with a five speed manual transmission. It was a terrific car and I often wonder why I ever got rid of it, but, at the time, I was in the habit of changing cars with the frequency most people change pants. Our daughter Emily was three when we bought the car and probably five when I traded it in. For the next several years, she demanded that we “get the Mercury back.” When I told her I’d consider buying a new Mercury, she would say “no, Daddy, not a Mercury…the Mercury.” She loved that car, maybe because of all the fun we had when she was in it with Daddy when he was testing its limits on the way to White Castle. But I digress. When I bought the car, I would have rather had the car from which it was cloned, the Ford Contour. But my grade school (and to this day) buddy Paul Napleton sells Mercuries from the very store that his father established back in the ‘70s in Blue Island, Illinois, just across 127th Street from Eisenhower High School. Like Paul Kuhn, Paul Napleton appreciated the business and made me a great deal. And there was another rub: to get a fully loaded Contour/Mystique with a stick, ordering from the factory was a necessity, and I felt much more comfortable ordering from Paul than from a dealer I didn’t know as well; I knew Paul wouldn’t bollix up the order.
In both cases, had I not had friends who sold Mercuries, I would have bought the virtually identical Ford and been just as happy. I only had serious interest in one other Mercury, the Marauder, which was only produced for a few years at the beginning of the first decade of this millennium. I decided not to buy it because gas mileage, tossability, and a manual transmission were more important than all-out muscle, but, even if I had decided to seriously pursue this fire breather, I could have accomplished the same thing, albeit not quite the same look, by buying a Ford Crown Vic with the bigger V8 and a police package.
And that has been the story of Mercury for the last twenty or so years: rebadged Fords chosen over their Ford clones because of the deal or the relationship with the dealer. The division should have been killed years ago. The question becomes what happens to the Paul Kuhns and Paul Napletons of the world, and all the other Lincoln/Mercury dealers, when Mercury makes its exit. (Probably not good examples; I haven’t seen or heard from Paul Kuhn in at least 25 years and I suspect he is retired; Paul Napleton’s car empire extends far beyond Mercury so the loss of Mercury, while important, will probably have little impact on him or his employees.) It would seem that, as long as Lincoln stays in business, they should be fine. While the papers say that the loss of their “volume” brand, Mercury, could be a devastating blow to these dealers, can one with a straight face call Mercury a “volume” brand? This will give Lincoln the opportunity to upgrade the newly single brand Lincoln dealerships in order to better compete with other luxury, or near luxury brands. Some Lincoln/Mercury dealers will be merged with Ford dealers; in many areas of the country, such a combination is even now more the rule than the exception, which must have made it awfully difficult for such dealers to sell a Mercury at any kind of a mark-up.
In any case, the dealer problem should not be insurmountable as long as Lincoln remains in existence, and there’s the rub. As the Wall Street Journal reported this morning
“Ford officials also are engaged in an intense review of he future of Lincoln, which has struggled as well despite its fairly new lineup.”
Discontinuing Lincoln would seem to be a mistake. First, it just makes sense to have a volume division (Ford) and an upscale division (Lincoln), as does every car other manufacturer that peddles its wares in this country, with the possible exception of Chrysler (It’s hard to call the Chrysler marque “upscale.”) , which shouldn’t be used as an example by anybody aspiring to success in any case. Second, judging Lincoln’s performance by the last few years, which have been tumultuous for the entire industry, is foolhardy, especially since Ford execs appeared to have made a vital, and I think commendable, decision at the outset of these difficult years; i.e., repositioning Lincoln so that it competes not so much with luxury marques such as Cadillac, Lexus, and Mercedes but, rather, against such “one notch under” marques as Buick and Acura. Ironically, since making that decision, Lincoln has never competed, at least from a product standpoint, more effectively against Lexus in particular than it ever has before. If you don’t believe me, drive a Lexus ES350 and a Lincoln MKX and tell me that the MKX is not as good a car.
Shuttering Mercury was a great decision; doing the same with Lincoln would be a bad decision from many perspectives.
One more note:
Lest anyone call me on the title of this post, it is taken from the original 1955 version of “Hot Rod Lincoln,” written and performed by Charlie Ryan, which was an answer to “Hot Rod Race,” written by George Wilson, recorded in 1950 by Arkie Shibley, and covered numerous times since then, most famously by Jimmy Dolan later in the ‘50s. “Hot Rod Lincoln” was also covered numerous times by others, including Jimmy Dolan. The most famous version was the 1972 version by Commander Cody and His Lost Planet Airmen. That version starts “Have you heard the story of the hot rod race when the Fords and Lincolns were settin’ the pace?”
Friday, May 28, 2010
“I’M A RETIRED INVESTOR, LIVING ON A PENSION…”
5/28/10
Today’s Wall Street Journal held news that Congress is considering a bailout of multi-employer pension plans, i.e., plans run jointly by unions and, mostly, smaller companies with members and employees who change employers often. Such plans can be found in, among others, the trucking and construction industries.
Incidentally, Senator Bob Casey (D., Pennsylvania), a good enough politician to know that words like “bailout” are about as popular as head lice at the moment, says that his proposal is not a bailout, no sir. In order to increase the bill’s prospects, he points out that, under the legislation, plans taking advantage of this non-bailout would have to cover the first five years of benefits; the Pension Benefit Guaranty Corp. (“PBGC”) would “only” be responsible for the longer term costs. Thus, this non-bailout would “only” cost the taxpayers $8 billion. Such is the state of logic in Washington, D.C. But I digress.
This legislation will encounter plenty of trouble, and not only because of the citizenry’s finally heightened sensitivity to big spending, large budget deficits, and the attitude reflected in the contention that something costs only $8 billion dollars, a figure that would be bad enough but that strains credibility given the government’s track record of estimating costs of programs. Long time readers will remember an argument I first made in the Pontificator in my 11/16/07 post, “ELIHU, WOULD YOU LOOFAH MY STRETCH MARKS?”, in which I made the connection between the Drew Peterson case and public pensions, and that I have been making in other fora for years, to wit: A large and growing number of taxpayers are no longer covered by traditional defined pension benefit plans. In the private sector, such plans are going, or have gone, the way of the dodo bird. Taking money from people in order to finance benefits to which they have no access is a difficult task and increasingly, as private pension plans go away, should become more difficult to the point of impossibility.
As a further point of diversion, I have to admit I was floored by the Journal article’s contention “about 10 million workers, or almost one in four workers who have a private pension” are covered by multi-employer plans. There is plenty of ambiguity in this statement. What is a “private” pension plan? Is that a plan provided by a private sector employer or is it a “private” plan in the sense that it is not social security? Are we talking about defined benefit plans here, or are defined contribution plans (401k plans) considered “private pension plans” for these purposes? But let’s assume for a moment that the denominator in this article means what it appears to mean; i.e., defined benefit plans provided by private sector employers. That would mean 40 million workers are covered by private sector defined benefit pension plans. How many people work in the private sector in the United States, a country of 300 million with a still larger private sector than most of its international counterparts? 150 million? Say that’s true; that would mean that a little more than a quarter of private sector workers are covered by a defined benefit pension plans. That percentage, while small enough to contribute to the above argument about the defined benefit plan going the way of the t-rex in the private sector, is still a larger number than I would have presumed. One thing is nearly certain: that number, already not large, will go down in the future. But, again, I digress.
Two things, however, might help this bailout proposal succeed. First, in the case of local government workers, the focus of the aforementioned 11/16/07 post, the taxpayers can see a clearer connection between public sector pensions and their own checkbooks both because states and municipalities cannot (legally, at least) run deficits; therefore, any increase, or sustenance of, local or state government pensions must be covered by tax increases or service cuts. The federal government can simply borrow more for the above bailout, leaving current taxpayers with the bill only for interest which, at least for now, is miniscule, as a percentage. Further, local pensions are paid primarily through property tax bills, which, not being withheld from wages, have a tendency to be more visible to taxpayers than the federal income tax, which almost half of Americans don’t pay anyway.
Second, there is the age-old public finance problem of concentrated benefits and dispersed costs. In this case, the pension benefits are highly visible to those ten million people who receive such benefits. Therefore, they will fight hard to maintain those benefits, via federal bailout if necessary. The cost of the bill is dispersed among many more taxpayers. Given how the government spends money, the cost of this bill, like the cost of most any individual bill, will hardly be noticed. Thus resistance will be scattered and, in most cases, half-hearted. This is, ladies and gentlemen, how government grows: concentrated benefits, dispersed costs and, when attempts are made to rein in costs, concentrated pain and dispersed benefits; i.e., those few whose oxen are getting gored are much more vocal than the many who are saving a few bucks, maybe, on their tax bills.
Today’s Wall Street Journal held news that Congress is considering a bailout of multi-employer pension plans, i.e., plans run jointly by unions and, mostly, smaller companies with members and employees who change employers often. Such plans can be found in, among others, the trucking and construction industries.
Incidentally, Senator Bob Casey (D., Pennsylvania), a good enough politician to know that words like “bailout” are about as popular as head lice at the moment, says that his proposal is not a bailout, no sir. In order to increase the bill’s prospects, he points out that, under the legislation, plans taking advantage of this non-bailout would have to cover the first five years of benefits; the Pension Benefit Guaranty Corp. (“PBGC”) would “only” be responsible for the longer term costs. Thus, this non-bailout would “only” cost the taxpayers $8 billion. Such is the state of logic in Washington, D.C. But I digress.
This legislation will encounter plenty of trouble, and not only because of the citizenry’s finally heightened sensitivity to big spending, large budget deficits, and the attitude reflected in the contention that something costs only $8 billion dollars, a figure that would be bad enough but that strains credibility given the government’s track record of estimating costs of programs. Long time readers will remember an argument I first made in the Pontificator in my 11/16/07 post, “ELIHU, WOULD YOU LOOFAH MY STRETCH MARKS?”, in which I made the connection between the Drew Peterson case and public pensions, and that I have been making in other fora for years, to wit: A large and growing number of taxpayers are no longer covered by traditional defined pension benefit plans. In the private sector, such plans are going, or have gone, the way of the dodo bird. Taking money from people in order to finance benefits to which they have no access is a difficult task and increasingly, as private pension plans go away, should become more difficult to the point of impossibility.
As a further point of diversion, I have to admit I was floored by the Journal article’s contention “about 10 million workers, or almost one in four workers who have a private pension” are covered by multi-employer plans. There is plenty of ambiguity in this statement. What is a “private” pension plan? Is that a plan provided by a private sector employer or is it a “private” plan in the sense that it is not social security? Are we talking about defined benefit plans here, or are defined contribution plans (401k plans) considered “private pension plans” for these purposes? But let’s assume for a moment that the denominator in this article means what it appears to mean; i.e., defined benefit plans provided by private sector employers. That would mean 40 million workers are covered by private sector defined benefit pension plans. How many people work in the private sector in the United States, a country of 300 million with a still larger private sector than most of its international counterparts? 150 million? Say that’s true; that would mean that a little more than a quarter of private sector workers are covered by a defined benefit pension plans. That percentage, while small enough to contribute to the above argument about the defined benefit plan going the way of the t-rex in the private sector, is still a larger number than I would have presumed. One thing is nearly certain: that number, already not large, will go down in the future. But, again, I digress.
Two things, however, might help this bailout proposal succeed. First, in the case of local government workers, the focus of the aforementioned 11/16/07 post, the taxpayers can see a clearer connection between public sector pensions and their own checkbooks both because states and municipalities cannot (legally, at least) run deficits; therefore, any increase, or sustenance of, local or state government pensions must be covered by tax increases or service cuts. The federal government can simply borrow more for the above bailout, leaving current taxpayers with the bill only for interest which, at least for now, is miniscule, as a percentage. Further, local pensions are paid primarily through property tax bills, which, not being withheld from wages, have a tendency to be more visible to taxpayers than the federal income tax, which almost half of Americans don’t pay anyway.
Second, there is the age-old public finance problem of concentrated benefits and dispersed costs. In this case, the pension benefits are highly visible to those ten million people who receive such benefits. Therefore, they will fight hard to maintain those benefits, via federal bailout if necessary. The cost of the bill is dispersed among many more taxpayers. Given how the government spends money, the cost of this bill, like the cost of most any individual bill, will hardly be noticed. Thus resistance will be scattered and, in most cases, half-hearted. This is, ladies and gentlemen, how government grows: concentrated benefits, dispersed costs and, when attempts are made to rein in costs, concentrated pain and dispersed benefits; i.e., those few whose oxen are getting gored are much more vocal than the many who are saving a few bucks, maybe, on their tax bills.
Thursday, May 27, 2010
HIDE THE CHINA!
5/27/10
The Dow was up almost 300 points today, mostly, according to the experts, on news that China denies talk that it is reevaluating its exposure to euro-denominated assets.
The cynic might come up with two responses, and, if one is looking for cynicism, one has come to the right place, so here goes:
First, what alternative do the Chinese have to holding a certain amount of their assets in euro-denominated instruments? They could pile more heavily into the dollar, but how attractive is such an alternative, especially given the recent well deserved lectures they have given to various culprits in the Bush/Obama administration about their debasement of the dollar? I suppose the Chinese could go more heavily into yen denominated assets and, given the performance of the yen of late, perhaps that would have been a well advised move in the short run. However, Japan has long term problems, not the least of which, for holders of its currency, is that the stronger the yen gets, ceteris paribus (“all other things being equal” in the language of the saints and scholars), the less attractive the underlying assets become. There’s always gold, of course, and those who have held large positions in gold (including yours truly, in a relative sense) would very much like the Chinese to increase their positions in that ancient object of royal desire (gold, not Zsa Zsa Gabor), but, if you can believe the Chinese, they seem to like earning interest too much to get heavily involved in gold.
But speaking of believing the Chinese leads to the second and more cogent point: if you were an official of either the Chinese treasury or central bank and you were considering lightening up on the euro, would you tell everyone you were doing so? I guess one could concoct some sort of Sun Tzuian scenario in which the Chinese would talk down the euro in order to bolster the relative value of the dollar, of which they hold plenty more. But that is a bit far-fetched. Simply put, the Chinese are smart enough to apply their seemingly culturally imbued inscrutability to their currency dealings and they realize that they are big enough and (rightly) perceived to be wise enough to have profound impacts on the values of their holdings simply by their utterances.
Like everyone else, I have no idea what China is really doing with its euro holdings in real time, just as nobody had any idea what it was doing with its dollar holdings when things were (?) getting dicey for the greenback. But I would be very hesitant to use the pronouncements of various Chinese financial and monetary officials as a guide in determining the current Chinese attitude toward anything. Lest this be interpreted as some kind of knock on the Chinese, I would apply the same skepticism toward the pronouncements of the financial and monetary authorities in any country, perhaps especially those in this country. I only focus on the Chinese in this post for three reasons:
--The are in today’s news.
--They are very large in everything (currency holdings, population, growth rates, etc.)
--They are very smart, especially relative to the estimables in the Bush/Obama administration.
The Dow was up almost 300 points today, mostly, according to the experts, on news that China denies talk that it is reevaluating its exposure to euro-denominated assets.
The cynic might come up with two responses, and, if one is looking for cynicism, one has come to the right place, so here goes:
First, what alternative do the Chinese have to holding a certain amount of their assets in euro-denominated instruments? They could pile more heavily into the dollar, but how attractive is such an alternative, especially given the recent well deserved lectures they have given to various culprits in the Bush/Obama administration about their debasement of the dollar? I suppose the Chinese could go more heavily into yen denominated assets and, given the performance of the yen of late, perhaps that would have been a well advised move in the short run. However, Japan has long term problems, not the least of which, for holders of its currency, is that the stronger the yen gets, ceteris paribus (“all other things being equal” in the language of the saints and scholars), the less attractive the underlying assets become. There’s always gold, of course, and those who have held large positions in gold (including yours truly, in a relative sense) would very much like the Chinese to increase their positions in that ancient object of royal desire (gold, not Zsa Zsa Gabor), but, if you can believe the Chinese, they seem to like earning interest too much to get heavily involved in gold.
But speaking of believing the Chinese leads to the second and more cogent point: if you were an official of either the Chinese treasury or central bank and you were considering lightening up on the euro, would you tell everyone you were doing so? I guess one could concoct some sort of Sun Tzuian scenario in which the Chinese would talk down the euro in order to bolster the relative value of the dollar, of which they hold plenty more. But that is a bit far-fetched. Simply put, the Chinese are smart enough to apply their seemingly culturally imbued inscrutability to their currency dealings and they realize that they are big enough and (rightly) perceived to be wise enough to have profound impacts on the values of their holdings simply by their utterances.
Like everyone else, I have no idea what China is really doing with its euro holdings in real time, just as nobody had any idea what it was doing with its dollar holdings when things were (?) getting dicey for the greenback. But I would be very hesitant to use the pronouncements of various Chinese financial and monetary officials as a guide in determining the current Chinese attitude toward anything. Lest this be interpreted as some kind of knock on the Chinese, I would apply the same skepticism toward the pronouncements of the financial and monetary authorities in any country, perhaps especially those in this country. I only focus on the Chinese in this post for three reasons:
--The are in today’s news.
--They are very large in everything (currency holdings, population, growth rates, etc.)
--They are very smart, especially relative to the estimables in the Bush/Obama administration.
Tuesday, May 25, 2010
“TALK ABOUT YOUR CHILDHOOD WISHES…”
5/25/10
Today’s Chicago Sun-Times reports the response of Illinois State Representative Elaine Nekritz (D-Northbrook) to the cuts in the Prairie State’s budget that Democrats in the state House are begrudgingly proposing:
“I’m not excited about any of these spending reductions. I didn’t come to Springfield to say ‘no.’ I came to Springfield to say ‘yes.’ But this is what is necessary in this time.”
It is often, even usually, the job of a leader, or of an adult, to say “No.” It is the pastime of a sycophant or of an unctuous approval seeker, to say “Yes.”
I am not making this observation to comment specifically on Ms. Nekritz’s fitness for leadership; she is but one member of the Illinois House and her constituents have seen fit to send her to Springfield. Further, she is to be applauded, at least in a relative sense, for recognizing that this is not the time to be acceding to the requests of any constituent who can effect a put upon attitude or a sense of entitlement. Rather, I make this observation to make a further observation, to wit…we have a dearth of leadership, and a surplus of sycophancy, in positions of “responsibility” at all levels of government. That, combined with a near complete abrogation of a sense of restraint or limits on the part of a large chunk of the citizenry has led to the fiscal, and myriad other, problems our state, and our society, faces.
Today’s Chicago Sun-Times reports the response of Illinois State Representative Elaine Nekritz (D-Northbrook) to the cuts in the Prairie State’s budget that Democrats in the state House are begrudgingly proposing:
“I’m not excited about any of these spending reductions. I didn’t come to Springfield to say ‘no.’ I came to Springfield to say ‘yes.’ But this is what is necessary in this time.”
It is often, even usually, the job of a leader, or of an adult, to say “No.” It is the pastime of a sycophant or of an unctuous approval seeker, to say “Yes.”
I am not making this observation to comment specifically on Ms. Nekritz’s fitness for leadership; she is but one member of the Illinois House and her constituents have seen fit to send her to Springfield. Further, she is to be applauded, at least in a relative sense, for recognizing that this is not the time to be acceding to the requests of any constituent who can effect a put upon attitude or a sense of entitlement. Rather, I make this observation to make a further observation, to wit…we have a dearth of leadership, and a surplus of sycophancy, in positions of “responsibility” at all levels of government. That, combined with a near complete abrogation of a sense of restraint or limits on the part of a large chunk of the citizenry has led to the fiscal, and myriad other, problems our state, and our society, faces.
Monday, May 24, 2010
THE GYNECOLOGICAL RULE
5/24/10
For the last week or so, we in the Chicagoland area, and perhaps many outside this area, have been “treated” to the heart rending tale of Jennifer LaPenta, a 19 year old woman from Round Lake who was held in contempt of court, and spent a night in jail, for coming to a friend’s court hearing wearing a t-shirt that said “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules.”
Perhaps the punishment was too severe, especially if Ms. LaPenta is telling the truth when she said she offered to remove the shirt (which, come to think of it, may have led to more than a contempt citation) and leave the courtroom but, in spite of the offer, was immediately taken into custody. Regardless of one’s opinion of the severity of the sentence, one cannot help but cheer Judge Helen Rozenberg for having the (slang term for certain components of a man’s genitalia) to try to restore a modicum of decorum in her courtroom and, in a larger sense, to our society. Ms. LaPenta apparently doesn’t see it that way and has filed suit seeking to have her record expunged of this contempt citation.
The point of this post is not to comment on the severity of Ms. LaPenta’s sentence or on the merits of her suit. The point is to ridicule one of her attorney’s silly arguments and wholeheartedly agree with one of his (perhaps) well reasoned arguments.
Ms. LaPenta’s attorney, Peter Kalagis, argued, in filing Ms. LaPenta’s suit
“We as a people are free to express ourselves in words and writing as long as it doesn’t cause harm.”
Really? When the framers of the Constitution appended the First Amendment to our foundational document, the type of speech and expression they so earnestly tried to protect was “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules”? And people died or otherwise put up with all sorts of deprivations and hardships so some air-headed kid could enter a courtroom with “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules” emblazoned across her chest? Ms. LaPenta, with the depth of constitutional appreciation and understanding of the typical 19 (or, sadly, 49) year old, may believe that, but are we supposed to believe that? Does Mr. Kalagis believe that? C’mon!
But Mr. Kalagis not only was able to keep a straight face, and a degree of shame, when making the above argument. He also made, albeit probably unwittingly, a very cogent argument when he further stated that most people in the ‘20s, ‘30s, and ‘40s would not find the T-shirt Ms. LaPenta wore offensive. Doubtless this is true. From what I am seeing of late, I would not be surprised to see apparel featuring such deep thought and, of course, hilarious, thigh-slapping humor, worn not only in court, but at weddings, baptisms, bar mitzvahs, confirmations, Easter services, presidential inaugurations, and funerals.
In our new and improved America, populated by fans of the likes of Lady Gaga and Lindsey Lohan and in which only an America hating Communist would not believe that our best days are ahead of us, how can anyone possibly be offended by, or fail to see the incisive wit and boundless hilarity of a T-shirt that says “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules”? Such a person would have to be (Horrors!) hopelessly unhip, old-fashioned, and out of touch with popular culture.
For the last week or so, we in the Chicagoland area, and perhaps many outside this area, have been “treated” to the heart rending tale of Jennifer LaPenta, a 19 year old woman from Round Lake who was held in contempt of court, and spent a night in jail, for coming to a friend’s court hearing wearing a t-shirt that said “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules.”
Perhaps the punishment was too severe, especially if Ms. LaPenta is telling the truth when she said she offered to remove the shirt (which, come to think of it, may have led to more than a contempt citation) and leave the courtroom but, in spite of the offer, was immediately taken into custody. Regardless of one’s opinion of the severity of the sentence, one cannot help but cheer Judge Helen Rozenberg for having the (slang term for certain components of a man’s genitalia) to try to restore a modicum of decorum in her courtroom and, in a larger sense, to our society. Ms. LaPenta apparently doesn’t see it that way and has filed suit seeking to have her record expunged of this contempt citation.
The point of this post is not to comment on the severity of Ms. LaPenta’s sentence or on the merits of her suit. The point is to ridicule one of her attorney’s silly arguments and wholeheartedly agree with one of his (perhaps) well reasoned arguments.
Ms. LaPenta’s attorney, Peter Kalagis, argued, in filing Ms. LaPenta’s suit
“We as a people are free to express ourselves in words and writing as long as it doesn’t cause harm.”
Really? When the framers of the Constitution appended the First Amendment to our foundational document, the type of speech and expression they so earnestly tried to protect was “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules”? And people died or otherwise put up with all sorts of deprivations and hardships so some air-headed kid could enter a courtroom with “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules” emblazoned across her chest? Ms. LaPenta, with the depth of constitutional appreciation and understanding of the typical 19 (or, sadly, 49) year old, may believe that, but are we supposed to believe that? Does Mr. Kalagis believe that? C’mon!
But Mr. Kalagis not only was able to keep a straight face, and a degree of shame, when making the above argument. He also made, albeit probably unwittingly, a very cogent argument when he further stated that most people in the ‘20s, ‘30s, and ‘40s would not find the T-shirt Ms. LaPenta wore offensive. Doubtless this is true. From what I am seeing of late, I would not be surprised to see apparel featuring such deep thought and, of course, hilarious, thigh-slapping humor, worn not only in court, but at weddings, baptisms, bar mitzvahs, confirmations, Easter services, presidential inaugurations, and funerals.
In our new and improved America, populated by fans of the likes of Lady Gaga and Lindsey Lohan and in which only an America hating Communist would not believe that our best days are ahead of us, how can anyone possibly be offended by, or fail to see the incisive wit and boundless hilarity of a T-shirt that says “I have the (slang word for a woman’s genitalia or an adjective sometimes used with “cat”) so I make the rules”? Such a person would have to be (Horrors!) hopelessly unhip, old-fashioned, and out of touch with popular culture.
Saturday, May 22, 2010
THE DOCTOR NEEDS A GREATER ABILITY TO THINK ON HIS FEET…OR A BETTER SPEECHWRITER
5/22/10
Kentucky senatorial candidate Rand Paul appears to have stepped in it when he questioned the validity of the Civil Rights Act of 1964. In an interview on one of the national news programs (I heard only excerpts of the interview and so I can’t quote it.), Paul was asked something, to the effect
If someone operates a restaurant or a hotel or a store or any type of business and doesn’t want to do business with someone because of his race, do you think that is alright?
Paul then yammered some anodyne comments to the effect that while he questioned the Act’s constitutionality, he thought its aims were good and he wouldn’t move, or vote to repeal it. Wow…what bravery.
While I can’t tell Dr. Paul what to say, I can tell my readers how I would have answered that question:
No, I don’t think it’s right to discriminate against people on the basis of their race. It makes neither moral nor business sense. But that doesn’t mean it should be illegal. There are a lot of things I don’t think are right, e.g., .smoking, gambling, “gentlemen’s” clubs, prime time network television, but that doesn’t mean they should be illegal. If everything I think is wrong were illegal, most people would find this world a very boring place. And if everything I thought was worthwhile and salubrious were made mandatory, most people, including yours truly, would find this world not necessarily boring but downright frightening.
And while one might argue that we are not discussing the opinions of one person on the merits of certain activities or beliefs, but, rather, the opinions of the majority of the people on the merits of certain activities or beliefs, remember that the Constitution was, contrary to popular opinion, not designed to ratify the decisions of the majority but rather to protect the rights of the minority from being trampled by the majority.
Dr. Paul’s comments on BP could almost as easily be defended by saying something like
Damn right it’s un-American for the president of the United States to be saying he will be “stepping on the neck” of a corporation. And it seems to be wildly popular to jump all over BP in this case but, so far, exonerate the politicians and other government bureaucrats who have taken BP’s money and seemingly done BP’s bidding when it comes to safety regulations. Should we limit our criticism to the private players when such tragedies occur? Doesn’t government, and its coziness with those private players, deserve some of the blame? It is indeed when private corporations are able to co-opt the overextended power of government that such tragedies occur.
At least that’s what I would have said. Maybe Dr. Paul should look me up.
Kentucky senatorial candidate Rand Paul appears to have stepped in it when he questioned the validity of the Civil Rights Act of 1964. In an interview on one of the national news programs (I heard only excerpts of the interview and so I can’t quote it.), Paul was asked something, to the effect
If someone operates a restaurant or a hotel or a store or any type of business and doesn’t want to do business with someone because of his race, do you think that is alright?
Paul then yammered some anodyne comments to the effect that while he questioned the Act’s constitutionality, he thought its aims were good and he wouldn’t move, or vote to repeal it. Wow…what bravery.
While I can’t tell Dr. Paul what to say, I can tell my readers how I would have answered that question:
No, I don’t think it’s right to discriminate against people on the basis of their race. It makes neither moral nor business sense. But that doesn’t mean it should be illegal. There are a lot of things I don’t think are right, e.g., .smoking, gambling, “gentlemen’s” clubs, prime time network television, but that doesn’t mean they should be illegal. If everything I think is wrong were illegal, most people would find this world a very boring place. And if everything I thought was worthwhile and salubrious were made mandatory, most people, including yours truly, would find this world not necessarily boring but downright frightening.
And while one might argue that we are not discussing the opinions of one person on the merits of certain activities or beliefs, but, rather, the opinions of the majority of the people on the merits of certain activities or beliefs, remember that the Constitution was, contrary to popular opinion, not designed to ratify the decisions of the majority but rather to protect the rights of the minority from being trampled by the majority.
Dr. Paul’s comments on BP could almost as easily be defended by saying something like
Damn right it’s un-American for the president of the United States to be saying he will be “stepping on the neck” of a corporation. And it seems to be wildly popular to jump all over BP in this case but, so far, exonerate the politicians and other government bureaucrats who have taken BP’s money and seemingly done BP’s bidding when it comes to safety regulations. Should we limit our criticism to the private players when such tragedies occur? Doesn’t government, and its coziness with those private players, deserve some of the blame? It is indeed when private corporations are able to co-opt the overextended power of government that such tragedies occur.
At least that’s what I would have said. Maybe Dr. Paul should look me up.
Thursday, May 20, 2010
JUDGING ELENA
5/20/10
I’m not in the habit of defending nominations to the Supreme Court made my Democratic presidents, but Elena Kagan has put me in this decidedly uncomfortable position.
According to this morning’s Wall Street Journal, in handwritten notes for a speech she delivered to alums at her alma mater, Princeton, in 2003, the subject of which was the 2000 Bush v Gore election case, Ms. Kagan wrote that judges’ reasoning “necessarily + inevitably” involves “political + policy prescriptions.” Her conclusion was that, since this is the case, courts “should defer to political branches” and that “judicial review should be exercised with caution.”
Those who fancy themselves conservatives because they are professional Republicans somehow have seized on this statement as evidence of Ms. Kagan’s penchant for judicial activism. Curt Levey, executive director of something called the Committee for Justice, averred, in classic non-sequitur “I do not think policy and politics is an inevitable and necessary part of judicial review.” While it’s nice that Mr. Levey thinks that way, one’s opinion on whether judge’s political opinions do (not “should,” but “do”) enter into their judicial opinions would have no bearing on the process if the courts followed Ms. Kagan’s admonition to conduct judicial review with caution, which is, by the way, what the Republicans repeatedly tell us they want judges to do.
Indeed, Ms. Kagan’s scrawled notes convey the very essence of judicial restraint, the type of restraint “conservatives” claim to favor. That these “conservatives” can seize on these musings as evidence of a penchant on Ms. Kagan’s part for judicial activism first boggles the mind and second shows that those who say they are in favor of judicial restraint don’t mind judicial activism at all as long as the outcome of such activism is one they favor. In this case, they seem to be upset that Ms. Kagan’s preference for judicial restraint would have resulted in the recount Al Gore was seeking and possibly his becoming president. But politics shouldn’t enter into judicial decision making, no sir.
Sober Republicans probably realize that they can’t lay a hand on Ms. Kagan unless something new and unanticipated comes up in the next few weeks. They also probably realize (even if they don’t completely, or even nearly, understand the essence of the aforementioned scrawlings or even if those scrawlings hold little import) that Ms. Kagan is about as “good,” from their perspective, a nomination as they are going to get from Barack Obama. Obama is not going to nominate a “conservative” of the kind most of the professional GOPers seem to favor; i.e., someone who will indeed legislate from the bench in a manner acceptable to self-proclaimed conservatives. However, the GOPers have to make a show of opposing Elena Kagan. But attacks like the one led by Mr. Levey on a piece of “evidence” that reflects very well on Ms. Kagan from the viewpoint of those who truly oppose judicial activism just makes her opponents look silly.
What also might come to look silly is the argument that Ms. Kagan has no judicial experience. This argument may come back to bite the Republicans if some future GOP president comes up with a Supreme Court nominee who has no judicial experience. What will the GOPers who wail and gnash their teeth about Ms. Kagan’s not having been a judge do then? Why, they will tell us how wonderful it is that our (then) wise president had the foresight and courage to nominate someone “from outside the judicial monastery.” Hypocrisy is, after all, the politician’s stock in trade, but it is especially salient in the Republican Party, whose elected ranks are jammed with anti-government types who have never worked for anyone but the government. But I digress. One hopes that the American people will not stand for such hypocrisy, but one can also hope for, say, some modicum of intelligence to emanate from the idiot box when it’s tuned to the major networks with an equal probability of fulfillment of those hopes.
I’m not in the habit of defending nominations to the Supreme Court made my Democratic presidents, but Elena Kagan has put me in this decidedly uncomfortable position.
According to this morning’s Wall Street Journal, in handwritten notes for a speech she delivered to alums at her alma mater, Princeton, in 2003, the subject of which was the 2000 Bush v Gore election case, Ms. Kagan wrote that judges’ reasoning “necessarily + inevitably” involves “political + policy prescriptions.” Her conclusion was that, since this is the case, courts “should defer to political branches” and that “judicial review should be exercised with caution.”
Those who fancy themselves conservatives because they are professional Republicans somehow have seized on this statement as evidence of Ms. Kagan’s penchant for judicial activism. Curt Levey, executive director of something called the Committee for Justice, averred, in classic non-sequitur “I do not think policy and politics is an inevitable and necessary part of judicial review.” While it’s nice that Mr. Levey thinks that way, one’s opinion on whether judge’s political opinions do (not “should,” but “do”) enter into their judicial opinions would have no bearing on the process if the courts followed Ms. Kagan’s admonition to conduct judicial review with caution, which is, by the way, what the Republicans repeatedly tell us they want judges to do.
Indeed, Ms. Kagan’s scrawled notes convey the very essence of judicial restraint, the type of restraint “conservatives” claim to favor. That these “conservatives” can seize on these musings as evidence of a penchant on Ms. Kagan’s part for judicial activism first boggles the mind and second shows that those who say they are in favor of judicial restraint don’t mind judicial activism at all as long as the outcome of such activism is one they favor. In this case, they seem to be upset that Ms. Kagan’s preference for judicial restraint would have resulted in the recount Al Gore was seeking and possibly his becoming president. But politics shouldn’t enter into judicial decision making, no sir.
Sober Republicans probably realize that they can’t lay a hand on Ms. Kagan unless something new and unanticipated comes up in the next few weeks. They also probably realize (even if they don’t completely, or even nearly, understand the essence of the aforementioned scrawlings or even if those scrawlings hold little import) that Ms. Kagan is about as “good,” from their perspective, a nomination as they are going to get from Barack Obama. Obama is not going to nominate a “conservative” of the kind most of the professional GOPers seem to favor; i.e., someone who will indeed legislate from the bench in a manner acceptable to self-proclaimed conservatives. However, the GOPers have to make a show of opposing Elena Kagan. But attacks like the one led by Mr. Levey on a piece of “evidence” that reflects very well on Ms. Kagan from the viewpoint of those who truly oppose judicial activism just makes her opponents look silly.
What also might come to look silly is the argument that Ms. Kagan has no judicial experience. This argument may come back to bite the Republicans if some future GOP president comes up with a Supreme Court nominee who has no judicial experience. What will the GOPers who wail and gnash their teeth about Ms. Kagan’s not having been a judge do then? Why, they will tell us how wonderful it is that our (then) wise president had the foresight and courage to nominate someone “from outside the judicial monastery.” Hypocrisy is, after all, the politician’s stock in trade, but it is especially salient in the Republican Party, whose elected ranks are jammed with anti-government types who have never worked for anyone but the government. But I digress. One hopes that the American people will not stand for such hypocrisy, but one can also hope for, say, some modicum of intelligence to emanate from the idiot box when it’s tuned to the major networks with an equal probability of fulfillment of those hopes.
Wednesday, May 19, 2010
THE HALL OF OVERUSED (AND OUGHT TO BE RETIRED) WORDS, PART III
5/19/10
In my 2/17/10 and 2/19/10 posts, I initiated what I predicted would become a regular feature of the Insightful Pontificator, THE HALL OF OVERUSED (AND OUGHT TO BE RETIRED) WORDS. While it may appear to my readers that this feature has gone into hibernation, something in today’s Chicago Sun-Times has caused the Hall to be roused from its sleep.
Ironically, or perhaps clairvoyantly, my 2/19/10 post closed with
“At least the President didn’t say that he “literally will not rest” until the economy is once again robust.”
because in today’s paper, the Reverend Jeremiah Wright, the President’s erstwhile spiritual advisor, is quoted as saying, in a letter in which he refused to help the president of one of the many organizations trying to cop its share of the federal dollars intended to be spent on Haitian relief but that will, predictably, largely wind up in the pockets of the politically connected,
“I am ‘radioactive,’ Sir. When Obama threw me under the bus, he threw me under the bus literally!”
Is that right? So Barack Obama physically picked up Jeremiah Wright and tossed him under the wheels of an oncoming bus? And Jeremiah Wright lived to tell us about the president-to-be’s nefarious deed? The Reverend must have a tighter connection to the Creator than even he advertises!
In my 2/17/10 and 2/19/10 posts, I initiated what I predicted would become a regular feature of the Insightful Pontificator, THE HALL OF OVERUSED (AND OUGHT TO BE RETIRED) WORDS. While it may appear to my readers that this feature has gone into hibernation, something in today’s Chicago Sun-Times has caused the Hall to be roused from its sleep.
Ironically, or perhaps clairvoyantly, my 2/19/10 post closed with
“At least the President didn’t say that he “literally will not rest” until the economy is once again robust.”
because in today’s paper, the Reverend Jeremiah Wright, the President’s erstwhile spiritual advisor, is quoted as saying, in a letter in which he refused to help the president of one of the many organizations trying to cop its share of the federal dollars intended to be spent on Haitian relief but that will, predictably, largely wind up in the pockets of the politically connected,
“I am ‘radioactive,’ Sir. When Obama threw me under the bus, he threw me under the bus literally!”
Is that right? So Barack Obama physically picked up Jeremiah Wright and tossed him under the wheels of an oncoming bus? And Jeremiah Wright lived to tell us about the president-to-be’s nefarious deed? The Reverend must have a tighter connection to the Creator than even he advertises!
THE PAULIST SON
5/19/10
In what will come as a surprise to absolutely none of my loyal readers, I am delighted by the nomination of Rand Paul by the Republican Party in Kentucky to run for the U.S. Senate seat being vacated by Jim Bunning. My joy at this development is three-fold.
First, Dr. Paul’s victory in the primary is yet another manifestation of the citizenry’s utter disgust with what has become a governing class. I have described typical members of that aforementioned class (quoting from my 5/14/10 post MR. SMITH GOES TO WASHINGTON?, but expressing a sentiment by no means foreign to the general tone of the Pontificator when it touches on politics) as
“…snot-nosed youngsters with thoroughly unjustified messiah complexes who, upon graduating from law school, went to work on the staff of a Congressperson until something opened up in the state legislature where they preened and posed for the cameras until something opened up in Congress where they spent the rest of their lives, all the while, if they were GOPers, singing fulsome praise for the private sector they worked so hard to avoid.”
The voters, or at least those whose brains have not been sufficiently numbed by the treacly discharge of modern American “culture,” are simply sick and tired of having so many elements of their lives run by people who are completely out of touch with reality, nabobs surrounded by legions of sycophantic yes-men, who seek only greater levels of self-aggrandizement financed by an ever growing portion of the fruits of the labor of those who actually produce, or do, something for a living. The Tea Party Movement is only the latest manifestation of such disgust, and Rand Paul is only its latest, and so far most promising, herald.
Second, Dr. Paul’s victory over Trey Greyson, Kentucky secretary of state and toady of Senate Minority Leader Mitch McConnell, was a complete repudiation, by GOP voters mind you, of what Mr. McConnell and his ilk so thoroughly personify: the Big Business Uber Alles, Give War (any war, anywhere, against anyone) a Chance, Big Government for White People philosophy of the Bushite GOP establishment. One can only hope that this is the beginning of the end for the Republican Party as we know it, which gave up its birthright by its slavish devotion to George W. Bush and his disastrous excuse for a presidency.
Third, Dr. Paul’s ideas, while decried by Mr. Greyson and his puppetmasters as “strange,” reflect mine almost to tee. If one genuinely believes in small government, one should, one would suppose, be consistent and not use one’s stated devotion to small government principles only as a fig leaf for opposing only those manifestations of big government that don’t further one’s interests. Dr. Paul espouses such a consistent approach, the types of principles the Republican Party treats like the Athenians treated St. Paul (Acts, 17) and his strange ideas. While the GOPers feign interest in Dr. Paul’s ideas, they express a desire to “hear of these matters some other time,” while they go about their usual business of starting wars on flimsy pretenses and directing the growth of government in the direction of those who finance their exercises in self-adoration.
Further, as much as I am a fan of Dr. Rand Paul’s father, Dr. Ron Paul, and would certainly vote for him if he runs for president again, as I have consistently in the past, the elder Dr. Paul has been in public office far too long for my tastes. Any real believer in the principles Dr. Paul espouses would have retired, stayed retired, and returned to his medical practice, years ago. In fact, if the term limits espoused by Rand Paul were to go into effect, Ron Paul would be forced to do such a Cincinnatus imitation years ago. Besides, while Ron Paul is getting up there in years (74), Rand Paul is young (47), wrapping his father’s brains and understanding in a photogenic family and a bright political future. Rand’s only drawback, sadly, is his father’s tendency to make speeches that actually make sense, contain substance, and provide some value for the listener, the type of speeches that deep thinkers (like readers of, say, the Insightful Pontificator), whether or not they agree with the principles espoused therein, would like to become more prevalent on the American political scene. Unfortunately, the other 97% of the American people prefer high pitched, endless repetition of simplistic and trite talking points and such banalities as American Idol, Lady Gaga, Sarah Palin, and Rush Limbaugh. This could put a brake on Dr. Paul’s political future. But, for now, I, for one, will rejoice in Dr. Paul’s nomination, support his election, but remain wary, even in Rand Paul’s case, of the seemingly natural tendency of office seekers and office holders to go native, to drink the kool-aid, and become part of the problem they initially sought to solve.
In what will come as a surprise to absolutely none of my loyal readers, I am delighted by the nomination of Rand Paul by the Republican Party in Kentucky to run for the U.S. Senate seat being vacated by Jim Bunning. My joy at this development is three-fold.
First, Dr. Paul’s victory in the primary is yet another manifestation of the citizenry’s utter disgust with what has become a governing class. I have described typical members of that aforementioned class (quoting from my 5/14/10 post MR. SMITH GOES TO WASHINGTON?, but expressing a sentiment by no means foreign to the general tone of the Pontificator when it touches on politics) as
“…snot-nosed youngsters with thoroughly unjustified messiah complexes who, upon graduating from law school, went to work on the staff of a Congressperson until something opened up in the state legislature where they preened and posed for the cameras until something opened up in Congress where they spent the rest of their lives, all the while, if they were GOPers, singing fulsome praise for the private sector they worked so hard to avoid.”
The voters, or at least those whose brains have not been sufficiently numbed by the treacly discharge of modern American “culture,” are simply sick and tired of having so many elements of their lives run by people who are completely out of touch with reality, nabobs surrounded by legions of sycophantic yes-men, who seek only greater levels of self-aggrandizement financed by an ever growing portion of the fruits of the labor of those who actually produce, or do, something for a living. The Tea Party Movement is only the latest manifestation of such disgust, and Rand Paul is only its latest, and so far most promising, herald.
Second, Dr. Paul’s victory over Trey Greyson, Kentucky secretary of state and toady of Senate Minority Leader Mitch McConnell, was a complete repudiation, by GOP voters mind you, of what Mr. McConnell and his ilk so thoroughly personify: the Big Business Uber Alles, Give War (any war, anywhere, against anyone) a Chance, Big Government for White People philosophy of the Bushite GOP establishment. One can only hope that this is the beginning of the end for the Republican Party as we know it, which gave up its birthright by its slavish devotion to George W. Bush and his disastrous excuse for a presidency.
Third, Dr. Paul’s ideas, while decried by Mr. Greyson and his puppetmasters as “strange,” reflect mine almost to tee. If one genuinely believes in small government, one should, one would suppose, be consistent and not use one’s stated devotion to small government principles only as a fig leaf for opposing only those manifestations of big government that don’t further one’s interests. Dr. Paul espouses such a consistent approach, the types of principles the Republican Party treats like the Athenians treated St. Paul (Acts, 17) and his strange ideas. While the GOPers feign interest in Dr. Paul’s ideas, they express a desire to “hear of these matters some other time,” while they go about their usual business of starting wars on flimsy pretenses and directing the growth of government in the direction of those who finance their exercises in self-adoration.
Further, as much as I am a fan of Dr. Rand Paul’s father, Dr. Ron Paul, and would certainly vote for him if he runs for president again, as I have consistently in the past, the elder Dr. Paul has been in public office far too long for my tastes. Any real believer in the principles Dr. Paul espouses would have retired, stayed retired, and returned to his medical practice, years ago. In fact, if the term limits espoused by Rand Paul were to go into effect, Ron Paul would be forced to do such a Cincinnatus imitation years ago. Besides, while Ron Paul is getting up there in years (74), Rand Paul is young (47), wrapping his father’s brains and understanding in a photogenic family and a bright political future. Rand’s only drawback, sadly, is his father’s tendency to make speeches that actually make sense, contain substance, and provide some value for the listener, the type of speeches that deep thinkers (like readers of, say, the Insightful Pontificator), whether or not they agree with the principles espoused therein, would like to become more prevalent on the American political scene. Unfortunately, the other 97% of the American people prefer high pitched, endless repetition of simplistic and trite talking points and such banalities as American Idol, Lady Gaga, Sarah Palin, and Rush Limbaugh. This could put a brake on Dr. Paul’s political future. But, for now, I, for one, will rejoice in Dr. Paul’s nomination, support his election, but remain wary, even in Rand Paul’s case, of the seemingly natural tendency of office seekers and office holders to go native, to drink the kool-aid, and become part of the problem they initially sought to solve.
Sunday, May 16, 2010
“WELL, IT SURE SOUNDED GOOD…”
5/16/10
Chicago Tribune columnist John Kass devoted his Sunday, 5/16/10 column to singing the virtues of Indiana Governor Mitch Daniels, touting him as the “un-Obama” and ending his column with “And I don’t think we’ve heard the last from Mitch Daniels.”
Clearly, I had to respond, and I thought I’d share that response with my readers:
5/16/10
I don’t think you’re right on Mitch Daniels, John. Daniels sounds good, as do most Republicans, when he spews pabulum like
“There are those who said democracy can work only when you have certain virtues. Self reliance, personal responsibility, willingness to set aside personal gratification. And when those atrophy—the Founding Fathers were worried about this—when those virtues weaken, then the whole enterprise is threatened.”
and (as you put it)
Republicans have “lost their way and lost their birthright” for their addiction to overspending.
Yes, as do most Republicans, Mr. Daniels talks a very good game. But their actions belie their words. Mitch Daniels, for example, was director of the Office of Management and Budget for George W. Bush, and thus, after his boss, was the person most responsible for turning a gargantuan federal surplus into an even more gargantuan federal deficit. And yet he spews anodyne words about “self reliance, personal responsibility, willingness to delay gratification.” Yeah, for everybody but the politicians and those who bankroll their exercises in self-aggrandizement.
Mr. Daniels’ problem is endemic to just about every Republican, with a few exceptions like Ron Paul and, to a lesser extent, Chuck Hagel. While all GOPers (or at least all “professional” GOPers; i.e., officeholders, wannabe officeholders, and assorted hangers-on. Many, if not most, grassroots Republicans really do believe in the principles to which Mr. Daniels pays syrupy lip service.) supported the Bush administration with the ardor of Mr. Daniels, all were there supporting “our president” as he laid the foundations of what can best be described as the Bush/Obama administration.
And, by the way, those virtues of self-reliance, responsibility, willingness to set aside personal gratification? While they still exist in small quantities in obscure corners of our once great nation, they are nearly extinct and thus our Republic is doomed. And no politician or political party is going to change that; indeed, those barnacles on the ship of state actively aided and abetted our nation’s swift decline into mediocrity…or far worse.
On that happy note, keep up the good work, John…and read my book, The Chairman, A Novel of Big City Politics.
Chicago Tribune columnist John Kass devoted his Sunday, 5/16/10 column to singing the virtues of Indiana Governor Mitch Daniels, touting him as the “un-Obama” and ending his column with “And I don’t think we’ve heard the last from Mitch Daniels.”
Clearly, I had to respond, and I thought I’d share that response with my readers:
5/16/10
I don’t think you’re right on Mitch Daniels, John. Daniels sounds good, as do most Republicans, when he spews pabulum like
“There are those who said democracy can work only when you have certain virtues. Self reliance, personal responsibility, willingness to set aside personal gratification. And when those atrophy—the Founding Fathers were worried about this—when those virtues weaken, then the whole enterprise is threatened.”
and (as you put it)
Republicans have “lost their way and lost their birthright” for their addiction to overspending.
Yes, as do most Republicans, Mr. Daniels talks a very good game. But their actions belie their words. Mitch Daniels, for example, was director of the Office of Management and Budget for George W. Bush, and thus, after his boss, was the person most responsible for turning a gargantuan federal surplus into an even more gargantuan federal deficit. And yet he spews anodyne words about “self reliance, personal responsibility, willingness to delay gratification.” Yeah, for everybody but the politicians and those who bankroll their exercises in self-aggrandizement.
Mr. Daniels’ problem is endemic to just about every Republican, with a few exceptions like Ron Paul and, to a lesser extent, Chuck Hagel. While all GOPers (or at least all “professional” GOPers; i.e., officeholders, wannabe officeholders, and assorted hangers-on. Many, if not most, grassroots Republicans really do believe in the principles to which Mr. Daniels pays syrupy lip service.) supported the Bush administration with the ardor of Mr. Daniels, all were there supporting “our president” as he laid the foundations of what can best be described as the Bush/Obama administration.
And, by the way, those virtues of self-reliance, responsibility, willingness to set aside personal gratification? While they still exist in small quantities in obscure corners of our once great nation, they are nearly extinct and thus our Republic is doomed. And no politician or political party is going to change that; indeed, those barnacles on the ship of state actively aided and abetted our nation’s swift decline into mediocrity…or far worse.
On that happy note, keep up the good work, John…and read my book, The Chairman, A Novel of Big City Politics.
Friday, May 14, 2010
PHIL PAGANO
5/14/10
The recent suicide of Metra executive director Phil Pagano has been very much in the news locally and, I suspect, to a lesser extent, nationally over the last week or so. Whether what I have to say on the case is especially insightful or new is open to debate, but recent news has led me to encapsulate for my readers some of the thoughts that have arisen in my crowded cranium since Mr. Pagano’s mysterious suicide on May 7. Note that I know nothing beyond what I read in the papers; much of what I am writing is speculation and inquiry. None of it is necessarily fact or conclusion.
Phil Pagano had, as far as I can tell, a stellar reputation as a technocrat and a manager. He had been executive director of Metra, the transit agency that oversees commuter rail service in the six county Chicago area, since 1990. Under his leadership, Metra became, or solidified its place as, the country’s foremost commuter rail system. That Metra is the nation’s best commuter train system is readily apparent to its riders, and if one wishes to contest Metra’s preeminence in that endeavor I suggest a ride on the Long Island Railroad, but I digress. Given Mr. Pagano’s reputation, and obvious competence, it came as a shock when, late last month, it was revealed that he paid himself what was first described as an “unauthorized bonus,” but what was later described as “advance vacation pay” of $56,000, in violation of Metra’s compensation rules and practices. Mr. Pagano initially cooperated with investigators, including special counsel James Sotos, who were looking into Pagano’s alleged financial improprieties. However, last Friday, Mr. Pagano, who obviously had a sense of irony or a twisted sense of poetic justice, stepped in front of a Metra commuter train, killing himself instantly. In his pocket was found a Metra release on procedures to follow when commuter service is delayed by a train’s hitting either a car or a pedestrian. Since Mr. Pagano’s suicide, the estimate of the amount of money he expropriated from Metra has grown; as of this morning, the word was that he had taken “as much as $475,000,” according to the Chicago Tribune.
Mr. Pagano’s suicide is doubtless a (Words escape even me here.) sad and tragic event for Mr. Pagano and his family. One has to add, though, that this was also a traumatic and tragic event for the engineer of the train, and others who were operating the train, that Mr. Pagano chose to use as his instrument of self-destruction, especially since Mr. Pagano made eye contact, which doubtless took some effort, with the engineer just before impact. One would have wished that Mr. Pagano had been more, and I am not trying to be glib here, considerate in his choice of suicide methods. The engineer’s life is probably permanently scarred; how does one get over something like that, even though it was completely out of one’s control? Mr. Pagano’s choice was thoughtless and cruel. Killing himself was bad enough for his family; why did he have to wreak such havoc on an innocent man’s life in the process?
Given the circumstances, Mr. Pagano’s death certainly does not close this matter; the investigation of his financial finagling and its consequences continue, and they have to center around one key question: Why did Mr. Pagano kill himself? One can hope, which seems like a silly word here, that this was just an act of a disgraced yet proud man who couldn’t face the ignominy of having dishonored himself and damaged the agency that he did so much to build. But there may be more to it, and the crux of this matter has to boil down to one question: Why did Mr. Pagano, whose salary was $275,000, a pretty penny, especially when combined with public sector benefits, for anyone not employed by Goldman Sachs, feel the need to steal hundreds of thousands of dollars? Obviously, this is the focus of the investigation; when Mr. Pagano met with Mr. Sotos on May 5, he denied taking the money for illegal or immoral activities; he said, according to the Tribune, that it was a family matter, but that was all he said.
This may have been just a case of Mr. Pagano’s and his family’s living over their heads and finding themselves in financial trouble; that seems to be the new American way, even for people who make a LOT of money. It seems like more than enough is never enough. One hopes (again, a silly word in this context) that this was the case with Mr. Pagano, but, given that the Paganos, according to reports, live in a relatively modest home in Crystal Lake, a nice community but not, say, Lake Forest or Highland Park, the “living over one’s head” explanation, an obvious one in the case of about 95% of the American population, doesn’t seem to hold much water in Mr. Pagano’s case. So one must inevitably consider darker possibilities. AGAIN, I KNOW NOTHING BUT WHAT I READ IN THE PAPER. I AM ONLY SPECULATING AND QUESTIONING.
Was Mr. Pagano a gambler? He said that he didn’t take the money for illegal or immoral purposes, but he also might have been a liar on top of being an embezzler. Further, one’s definition of “immoral or illegal” can be quite flexible, varying, seemingly, from person to person, and the English language is subject to hair splitting; ask Bill Clinton, or any politician for that matter. Besides, what can be immoral about gambling? The common notion seems to be that if the state sponsors it, gambling is perfectly legal and moral. It is only when more entrepreneurial types are in charge of the action that it becomes immoral or illegal, but I digress. So Mr. Pagano could be gambling but still not be engaging in “immoral” activities, in his, or others’, estimation. And if he was a gambler, did he, as a result of this avocation, owe money to people whose idea of a loan workout is massaging the kneecaps of delinquent borrowers with Louisville Sluggers…or worse? (And I’m not talking about Adirondack bats, either.)
This being the greater Chicagoland area, one has to consider another dark possibility: Was some politician, or some politicians, putting the arm on Mr. Pagano to make sure that things continued to go smoothly for either him or his agency? Remember the excuse many employees of the Illinois Secretary of State’s office, when it was being run by future governor and federal inmate Honest George Ryan, gave for taking bribes? They were, they protested, only taking money because the lovable Mr. Ryan was constantly putting the arm on them to buy tickets to banquets and golf outings, to stuff envelopes with cash for “Christmas,” and otherwise to contribute to Mr. Ryan’s political operations and personal prosperity. One would have to be naïve to believe that these otherwise honest public servants only took money because Secretary of State McGruff was forcing them to do so, and that none of the bribe money made its way into the employees’ personal pockets, but the jury apparently concluded that such pressure from above was at least one of the reasons behind the open bazaar that Mr. Ryan’s Secretary of State’s office had become. What most people who have lived in this cesspool of corruption their whole lives realize, though, is that Mr. Ryan was by no means unique; extorting one’s employees, if one is a public servant, for “campaign” money is a time honored practice in these parts. And putting the arm on various public officials to insure continued favorable treatment, be that treatment employment, operational latitude, forbearance on investigation, or other perquisites of office, doubtless continues to this day. Could Mr. Pagano have been the target of such extortion attempts? Remember, Metra, Mr. Pagano’s agency, serves the six county CHICAGO metropolitan area.
Again, I don’t know the answers and I don’t even necessarily suspect any answers. But when we find out why Mr. Pagano, who was making more than a quarter million, somehow needed an extra nearly half million, much of this mystery will have been revealed.
The recent suicide of Metra executive director Phil Pagano has been very much in the news locally and, I suspect, to a lesser extent, nationally over the last week or so. Whether what I have to say on the case is especially insightful or new is open to debate, but recent news has led me to encapsulate for my readers some of the thoughts that have arisen in my crowded cranium since Mr. Pagano’s mysterious suicide on May 7. Note that I know nothing beyond what I read in the papers; much of what I am writing is speculation and inquiry. None of it is necessarily fact or conclusion.
Phil Pagano had, as far as I can tell, a stellar reputation as a technocrat and a manager. He had been executive director of Metra, the transit agency that oversees commuter rail service in the six county Chicago area, since 1990. Under his leadership, Metra became, or solidified its place as, the country’s foremost commuter rail system. That Metra is the nation’s best commuter train system is readily apparent to its riders, and if one wishes to contest Metra’s preeminence in that endeavor I suggest a ride on the Long Island Railroad, but I digress. Given Mr. Pagano’s reputation, and obvious competence, it came as a shock when, late last month, it was revealed that he paid himself what was first described as an “unauthorized bonus,” but what was later described as “advance vacation pay” of $56,000, in violation of Metra’s compensation rules and practices. Mr. Pagano initially cooperated with investigators, including special counsel James Sotos, who were looking into Pagano’s alleged financial improprieties. However, last Friday, Mr. Pagano, who obviously had a sense of irony or a twisted sense of poetic justice, stepped in front of a Metra commuter train, killing himself instantly. In his pocket was found a Metra release on procedures to follow when commuter service is delayed by a train’s hitting either a car or a pedestrian. Since Mr. Pagano’s suicide, the estimate of the amount of money he expropriated from Metra has grown; as of this morning, the word was that he had taken “as much as $475,000,” according to the Chicago Tribune.
Mr. Pagano’s suicide is doubtless a (Words escape even me here.) sad and tragic event for Mr. Pagano and his family. One has to add, though, that this was also a traumatic and tragic event for the engineer of the train, and others who were operating the train, that Mr. Pagano chose to use as his instrument of self-destruction, especially since Mr. Pagano made eye contact, which doubtless took some effort, with the engineer just before impact. One would have wished that Mr. Pagano had been more, and I am not trying to be glib here, considerate in his choice of suicide methods. The engineer’s life is probably permanently scarred; how does one get over something like that, even though it was completely out of one’s control? Mr. Pagano’s choice was thoughtless and cruel. Killing himself was bad enough for his family; why did he have to wreak such havoc on an innocent man’s life in the process?
Given the circumstances, Mr. Pagano’s death certainly does not close this matter; the investigation of his financial finagling and its consequences continue, and they have to center around one key question: Why did Mr. Pagano kill himself? One can hope, which seems like a silly word here, that this was just an act of a disgraced yet proud man who couldn’t face the ignominy of having dishonored himself and damaged the agency that he did so much to build. But there may be more to it, and the crux of this matter has to boil down to one question: Why did Mr. Pagano, whose salary was $275,000, a pretty penny, especially when combined with public sector benefits, for anyone not employed by Goldman Sachs, feel the need to steal hundreds of thousands of dollars? Obviously, this is the focus of the investigation; when Mr. Pagano met with Mr. Sotos on May 5, he denied taking the money for illegal or immoral activities; he said, according to the Tribune, that it was a family matter, but that was all he said.
This may have been just a case of Mr. Pagano’s and his family’s living over their heads and finding themselves in financial trouble; that seems to be the new American way, even for people who make a LOT of money. It seems like more than enough is never enough. One hopes (again, a silly word in this context) that this was the case with Mr. Pagano, but, given that the Paganos, according to reports, live in a relatively modest home in Crystal Lake, a nice community but not, say, Lake Forest or Highland Park, the “living over one’s head” explanation, an obvious one in the case of about 95% of the American population, doesn’t seem to hold much water in Mr. Pagano’s case. So one must inevitably consider darker possibilities. AGAIN, I KNOW NOTHING BUT WHAT I READ IN THE PAPER. I AM ONLY SPECULATING AND QUESTIONING.
Was Mr. Pagano a gambler? He said that he didn’t take the money for illegal or immoral purposes, but he also might have been a liar on top of being an embezzler. Further, one’s definition of “immoral or illegal” can be quite flexible, varying, seemingly, from person to person, and the English language is subject to hair splitting; ask Bill Clinton, or any politician for that matter. Besides, what can be immoral about gambling? The common notion seems to be that if the state sponsors it, gambling is perfectly legal and moral. It is only when more entrepreneurial types are in charge of the action that it becomes immoral or illegal, but I digress. So Mr. Pagano could be gambling but still not be engaging in “immoral” activities, in his, or others’, estimation. And if he was a gambler, did he, as a result of this avocation, owe money to people whose idea of a loan workout is massaging the kneecaps of delinquent borrowers with Louisville Sluggers…or worse? (And I’m not talking about Adirondack bats, either.)
This being the greater Chicagoland area, one has to consider another dark possibility: Was some politician, or some politicians, putting the arm on Mr. Pagano to make sure that things continued to go smoothly for either him or his agency? Remember the excuse many employees of the Illinois Secretary of State’s office, when it was being run by future governor and federal inmate Honest George Ryan, gave for taking bribes? They were, they protested, only taking money because the lovable Mr. Ryan was constantly putting the arm on them to buy tickets to banquets and golf outings, to stuff envelopes with cash for “Christmas,” and otherwise to contribute to Mr. Ryan’s political operations and personal prosperity. One would have to be naïve to believe that these otherwise honest public servants only took money because Secretary of State McGruff was forcing them to do so, and that none of the bribe money made its way into the employees’ personal pockets, but the jury apparently concluded that such pressure from above was at least one of the reasons behind the open bazaar that Mr. Ryan’s Secretary of State’s office had become. What most people who have lived in this cesspool of corruption their whole lives realize, though, is that Mr. Ryan was by no means unique; extorting one’s employees, if one is a public servant, for “campaign” money is a time honored practice in these parts. And putting the arm on various public officials to insure continued favorable treatment, be that treatment employment, operational latitude, forbearance on investigation, or other perquisites of office, doubtless continues to this day. Could Mr. Pagano have been the target of such extortion attempts? Remember, Metra, Mr. Pagano’s agency, serves the six county CHICAGO metropolitan area.
Again, I don’t know the answers and I don’t even necessarily suspect any answers. But when we find out why Mr. Pagano, who was making more than a quarter million, somehow needed an extra nearly half million, much of this mystery will have been revealed.
Thursday, May 13, 2010
THE MINISTRY OF SILLY WALKS
5/13/10
The Chicago Sun-Times reported in yesterday’s (i.e., Wednesday, 5/12/10’s) edition that Governor Pat “I know you’re an honorable man, Governor, above reproach, that your credentials as a reformer are impeccable and that you stand four square against the old time politics of this state, but I just gotta ask” Quinn has appointed Carrie Zalewski, the wife of State Representative, and former 23rd Ward Alderman, Mike Zalewski to a spot on something called the Illinois Pollution Control Board. Mrs. Zalewski was formerly something called a compliance attorney with the Illinois Department of Transportation, making $61,200 a year. Her new post will pay her $117,043 per year. The same story reports that our reform governor has appointed Lynne Sered, the wife of state Senator Jeff Schoenberg, to the post of Chairwoman of something called the Illinois Educational Labor Relations Board, a post that will pay Ms. Schoenberg $104,358 per year. (One can’t help but think that Carrie Zalewski’s having the same last name as her husband while Lynne Sered’s name differs from that of her husband reflects the stark cultural differences between the southwest side, where the Zalewskis reside and progressive Evanston, where the Mr. Schoenberg and Ms. Sered reside, but I digress.) Both appointments were confirmed overwhelmingly in the state senate, to the surprise of absolutely nobody.
To the observer jaded by having lived most of his life in the murky pond that is Chicago politics, or to the observer who is merely sentient, these appointments look like a blatant attempt on the part of Governor St. Patrick, who is starting to make the late, great Alderman Vito Manzullo look like Bob Lafollette (See, inter alia, my 3/26/10 post, IT’S ENOUGH TO MAKE A GUY WANT TO CHANGE HIS NAME), to curry the favor of one big time Chicago pol and one big time Chicago pol wannabe. (I’ll let the reader determine which is which.) However, Mr. Zalewski, as he should, defends his wife’s appointment to her new position, arguing “She is well qualified to be a member of the Pollution Control Board, and, as a new mother, has a strong, personal passion for preventing environmental contamination and upholding the law.”
I don’t doubt for a nanosecond that Mrs. Zalewski is qualified to be a member of the Pollution Control Board, just as I do not doubt that Ms. Sered is qualified to be Chairwoman of the Illinois Educational Labor Relations Board. But I also do not doubt that anyone reading this post, and not because of the brilliance reflected in seeking out such insightful reading material, but merely because of the ability to read reflected in reading my, or anyone’s, musings, is qualified for either post. So the real question is not whether these people deserve their posts but whether these posts ought to exist. Just what in the name of all that is good and sacred are the Illinois Pollution Control Board and the Illinois Educational Relations Board? It seems like their only function is to fortify the incomes and influence of various political parasites that inhabit the halls of power in this cesspool of corruption we call a state.
Perhaps in fatter times, we could afford sinecures for the spouses, friends, supporters, coat-holders, toadies, hangers-on, and lackeys of our elected public servants in the land of Lincoln. (That we could afford such fluffy do nothing jobs did not make them desirable, only affordable, sort of like being able to afford a $1,000 suit or a $60,000 car.) But now that the state is in a financial crisis, born of the incompetence of the political class and an indifferent, or complicit, citizenry, we can’t afford such bureaucratic monstrosities. Other than those who hold the jobs, the sponsors of those who hold the jobs, and the constituent groups that receive the largesse such bureaus and departments were designed to ladle out, who would miss the Illinois Pollution Control Board, the Educational Labor Relations Board, or three quarters of the monstrosities that sap the livelihoods of those who do the actual work and pay the bills in this, or any, state?
The Chicago Sun-Times reported in yesterday’s (i.e., Wednesday, 5/12/10’s) edition that Governor Pat “I know you’re an honorable man, Governor, above reproach, that your credentials as a reformer are impeccable and that you stand four square against the old time politics of this state, but I just gotta ask” Quinn has appointed Carrie Zalewski, the wife of State Representative, and former 23rd Ward Alderman, Mike Zalewski to a spot on something called the Illinois Pollution Control Board. Mrs. Zalewski was formerly something called a compliance attorney with the Illinois Department of Transportation, making $61,200 a year. Her new post will pay her $117,043 per year. The same story reports that our reform governor has appointed Lynne Sered, the wife of state Senator Jeff Schoenberg, to the post of Chairwoman of something called the Illinois Educational Labor Relations Board, a post that will pay Ms. Schoenberg $104,358 per year. (One can’t help but think that Carrie Zalewski’s having the same last name as her husband while Lynne Sered’s name differs from that of her husband reflects the stark cultural differences between the southwest side, where the Zalewskis reside and progressive Evanston, where the Mr. Schoenberg and Ms. Sered reside, but I digress.) Both appointments were confirmed overwhelmingly in the state senate, to the surprise of absolutely nobody.
To the observer jaded by having lived most of his life in the murky pond that is Chicago politics, or to the observer who is merely sentient, these appointments look like a blatant attempt on the part of Governor St. Patrick, who is starting to make the late, great Alderman Vito Manzullo look like Bob Lafollette (See, inter alia, my 3/26/10 post, IT’S ENOUGH TO MAKE A GUY WANT TO CHANGE HIS NAME), to curry the favor of one big time Chicago pol and one big time Chicago pol wannabe. (I’ll let the reader determine which is which.) However, Mr. Zalewski, as he should, defends his wife’s appointment to her new position, arguing “She is well qualified to be a member of the Pollution Control Board, and, as a new mother, has a strong, personal passion for preventing environmental contamination and upholding the law.”
I don’t doubt for a nanosecond that Mrs. Zalewski is qualified to be a member of the Pollution Control Board, just as I do not doubt that Ms. Sered is qualified to be Chairwoman of the Illinois Educational Labor Relations Board. But I also do not doubt that anyone reading this post, and not because of the brilliance reflected in seeking out such insightful reading material, but merely because of the ability to read reflected in reading my, or anyone’s, musings, is qualified for either post. So the real question is not whether these people deserve their posts but whether these posts ought to exist. Just what in the name of all that is good and sacred are the Illinois Pollution Control Board and the Illinois Educational Relations Board? It seems like their only function is to fortify the incomes and influence of various political parasites that inhabit the halls of power in this cesspool of corruption we call a state.
Perhaps in fatter times, we could afford sinecures for the spouses, friends, supporters, coat-holders, toadies, hangers-on, and lackeys of our elected public servants in the land of Lincoln. (That we could afford such fluffy do nothing jobs did not make them desirable, only affordable, sort of like being able to afford a $1,000 suit or a $60,000 car.) But now that the state is in a financial crisis, born of the incompetence of the political class and an indifferent, or complicit, citizenry, we can’t afford such bureaucratic monstrosities. Other than those who hold the jobs, the sponsors of those who hold the jobs, and the constituent groups that receive the largesse such bureaus and departments were designed to ladle out, who would miss the Illinois Pollution Control Board, the Educational Labor Relations Board, or three quarters of the monstrosities that sap the livelihoods of those who do the actual work and pay the bills in this, or any, state?
Tuesday, May 11, 2010
ANOTHER THING WE HAVE TO FEAR IS HYPOCRITICAL SELF STYLED TOUGH GUY FREE MARKETEERS AND THE LACKEYS THAT REPRESENT THEM IN WASHINGTON
5/11/10
A friend of mine, who knows me well enough to know that I understand that Fannie, Freddie, and the FHA don’t actually “lend” money (and noted that in his question), sent me an e-mail asking for clarification on my last (or next, depending on one’s perspective) post, THE ONLY THING WE HAVE TO FEAR IS…OUTRIGHT FINANCIAL CALAMITY AND THE END OF THE ECONOMY, AND THE REPUBLIC, AS WE KNOW IT.
My same friend, who is one of my most loyal readers, also knows that I am not given to understatement and so probably anticipated my reply, or something like it. I have reproduced it below for the benefit of my other readers, many of whom probably had the same question as did he.
I wish to thank him profusely for bringing this up and for his, and your, continuing support:
What I'm saying is that no one is making loans on houses (or investing in securities derived from those loans) unless those loans are guaranteed by the government. So, effectively, the only entity genuinely "lending money" on houses, in the sense of taking on any risk, is the government. Without the government guaranteeing the loans, there would be no one lending people money to buy houses. Yet we are told by some “experts” and inveterate bulls that everything is fine, that the financial system is recuperating and sound. But, in reality, without the government holding its hand, the financial system, at least as it relates to residential real estate financing, is still not functioning. The tough guy free marketeers have to rest comfortably in Ma Government’s hands while they go about decrying the dangers of big government and making the big money to which they feel entitled.
A friend of mine, who knows me well enough to know that I understand that Fannie, Freddie, and the FHA don’t actually “lend” money (and noted that in his question), sent me an e-mail asking for clarification on my last (or next, depending on one’s perspective) post, THE ONLY THING WE HAVE TO FEAR IS…OUTRIGHT FINANCIAL CALAMITY AND THE END OF THE ECONOMY, AND THE REPUBLIC, AS WE KNOW IT.
My same friend, who is one of my most loyal readers, also knows that I am not given to understatement and so probably anticipated my reply, or something like it. I have reproduced it below for the benefit of my other readers, many of whom probably had the same question as did he.
I wish to thank him profusely for bringing this up and for his, and your, continuing support:
What I'm saying is that no one is making loans on houses (or investing in securities derived from those loans) unless those loans are guaranteed by the government. So, effectively, the only entity genuinely "lending money" on houses, in the sense of taking on any risk, is the government. Without the government guaranteeing the loans, there would be no one lending people money to buy houses. Yet we are told by some “experts” and inveterate bulls that everything is fine, that the financial system is recuperating and sound. But, in reality, without the government holding its hand, the financial system, at least as it relates to residential real estate financing, is still not functioning. The tough guy free marketeers have to rest comfortably in Ma Government’s hands while they go about decrying the dangers of big government and making the big money to which they feel entitled.
THE ONLY THING WE HAVE TO FEAR IS…OUTRIGHT FINANCIAL CALAMITY AND THE END OF THE ECONOMY, AND THE REPUBLIC, AS WE KNOW IT.
5/11/10
I thought I was pretty much on top of things on the financial front. However, I read a statistic in this morning’s (i.e., Tuesday, 5/11’s, page A5) Wall Street Journal that astonished me, to wit:
“Fannie, Freddie, and the Federal Housing Administration provided guarantees or insurance for 96.5% of the home mortgages that originated in the first quarter, according to Inside Mortgage Finance, a trade publication.”
96.5%?! Can that be right? So, effectively, no one but the federal government is lending money on houses in this country (or at least that was the case during the first quarter)?
Don’t you worry about it; things are just fine. Just shut up, quit complaining, stop “selling America short,” and buy stocks. And borrow money to do so. And make sure that, while you’re at it, borrow enough extra money to buy plenty of useless imported trinkets to keep the economy going.
Be optimistic, man!
While you’re doing that, I’ll be buying more gold.
I thought I was pretty much on top of things on the financial front. However, I read a statistic in this morning’s (i.e., Tuesday, 5/11’s, page A5) Wall Street Journal that astonished me, to wit:
“Fannie, Freddie, and the Federal Housing Administration provided guarantees or insurance for 96.5% of the home mortgages that originated in the first quarter, according to Inside Mortgage Finance, a trade publication.”
96.5%?! Can that be right? So, effectively, no one but the federal government is lending money on houses in this country (or at least that was the case during the first quarter)?
Don’t you worry about it; things are just fine. Just shut up, quit complaining, stop “selling America short,” and buy stocks. And borrow money to do so. And make sure that, while you’re at it, borrow enough extra money to buy plenty of useless imported trinkets to keep the economy going.
Be optimistic, man!
While you’re doing that, I’ll be buying more gold.
NEIN!
5/11/10
As I contemplate the bailout of Greece and, potentially, the other PIIG countries, a few thoughts come to mind.
The bailout is widely advertised as being worth about $1 trillion. But the biggest chunk of the bailout, the 440 billion euro (about $560 billion) Special Purpose Vehicle, is not real money; it is a contingent amount that must be borrowed, with the backing of the euro governments, if needed and if the smaller component, the 60 billion euro (about $76 billion) is exhausted. Further, the SPV needs parliamentary approval at the national level in most cases, so it’s not a done deal. We are kidding ourselves when we use anodyne monikers like “euro governments” or “eurozone governments” to denote those backing the SPV. Effectively, it will be Germany and, to a lesser extent, France who will be backing the SPV. Will the French, and especially the German, populaces go along with an artifice designed to tap their bank accounts to bail out their less frugal neighbors on the fringes of Europe? Serious thinkers can only hope the answer is no and that the whole operation will come a cropper.
Why should serious thinkers hope the whole bailout, which the kids on Wall Street seemed to like so much yesterday, collapses? The moral hazard is obvious; why be frugal when Uncles Wolfy and Yves will always be around to cover one’s profligacy? The answer to the moral hazard problem would seem to be a more federated Europe. Would that be such a good thing? The British don’t seem to think so, and time is proving them right. Doubtless the French and the Germans, or at least the French and the Germans who make France and Germany work (i.e., not the French and German politicians) are doubtless having their misgivings. There are plenty of reasons, including but transcending economics, that Europe has never been “united” in the last, oh, 1,534 years. Don’t assume that the current generation of Europeans (or the current generation anywhere, for that matter) is somehow smarter than its forbearers. In fact, betting the opposite would be well advised.
In the more immediate term, the particulars of the bailout would indicate, if it works, a period of fiscal austerity on the continent, or at least on its fringes. At the same time that Europe would be experiencing fiscal austerity, it would be experiencing monetary laxity though European Central Bank (“ECB”) purchases of Eurozone government bonds, mostly those issued by the PIIGS (Portugal, Ireland, Italy, Greece, and Spain, though some, but not much, controversy surrounds the inclusion of either or both of Italy and Ireland), effectively monetizing the debt of the PIIGS. Oh, yes, the ECB assures us that it would sterilize such purchases so the net effect on monetary policy would be zero, but we’ve heard that song before. Central banks are no more given to honesty than anyone else. So it looks like the Eurobailout will lead to fiscal austerity and monetary profligacy, or something approximating the Carternomics of our second most failed president and his accomplice G. William Miller at the fed. Stagflation anyone?
Again, let’s hope the Germans maintain their normal sobriety, the French summon some outrage, and this whole Eurobailout is sold down the Rhine.
As I contemplate the bailout of Greece and, potentially, the other PIIG countries, a few thoughts come to mind.
The bailout is widely advertised as being worth about $1 trillion. But the biggest chunk of the bailout, the 440 billion euro (about $560 billion) Special Purpose Vehicle, is not real money; it is a contingent amount that must be borrowed, with the backing of the euro governments, if needed and if the smaller component, the 60 billion euro (about $76 billion) is exhausted. Further, the SPV needs parliamentary approval at the national level in most cases, so it’s not a done deal. We are kidding ourselves when we use anodyne monikers like “euro governments” or “eurozone governments” to denote those backing the SPV. Effectively, it will be Germany and, to a lesser extent, France who will be backing the SPV. Will the French, and especially the German, populaces go along with an artifice designed to tap their bank accounts to bail out their less frugal neighbors on the fringes of Europe? Serious thinkers can only hope the answer is no and that the whole operation will come a cropper.
Why should serious thinkers hope the whole bailout, which the kids on Wall Street seemed to like so much yesterday, collapses? The moral hazard is obvious; why be frugal when Uncles Wolfy and Yves will always be around to cover one’s profligacy? The answer to the moral hazard problem would seem to be a more federated Europe. Would that be such a good thing? The British don’t seem to think so, and time is proving them right. Doubtless the French and the Germans, or at least the French and the Germans who make France and Germany work (i.e., not the French and German politicians) are doubtless having their misgivings. There are plenty of reasons, including but transcending economics, that Europe has never been “united” in the last, oh, 1,534 years. Don’t assume that the current generation of Europeans (or the current generation anywhere, for that matter) is somehow smarter than its forbearers. In fact, betting the opposite would be well advised.
In the more immediate term, the particulars of the bailout would indicate, if it works, a period of fiscal austerity on the continent, or at least on its fringes. At the same time that Europe would be experiencing fiscal austerity, it would be experiencing monetary laxity though European Central Bank (“ECB”) purchases of Eurozone government bonds, mostly those issued by the PIIGS (Portugal, Ireland, Italy, Greece, and Spain, though some, but not much, controversy surrounds the inclusion of either or both of Italy and Ireland), effectively monetizing the debt of the PIIGS. Oh, yes, the ECB assures us that it would sterilize such purchases so the net effect on monetary policy would be zero, but we’ve heard that song before. Central banks are no more given to honesty than anyone else. So it looks like the Eurobailout will lead to fiscal austerity and monetary profligacy, or something approximating the Carternomics of our second most failed president and his accomplice G. William Miller at the fed. Stagflation anyone?
Again, let’s hope the Germans maintain their normal sobriety, the French summon some outrage, and this whole Eurobailout is sold down the Rhine.
Friday, May 7, 2010
TIMEO DANAOS, ET DONA FERENTES, PARTEM SECUNDUM
A good friend, smart guy, and regular reader, after seeing yesterday’s post on the situation in Greece, drew an historical analogy between Greece in 1948 and Greece today. My response is worthy of sharing with my readers:
5/7/10
The "Red Menace" that loomed so large and powerful back when "Give 'em Hell Harry" was president has been sufficiently tamed, even to the point of assuming room temperature, that that particular manifestation of going off the deep end is beyond the realm of possibilities. But the appeal of various other leftist, or extreme rightist, parties has to intensify in Greece in the wake of the unrest. Ironically, though, it was the more conservative (whatever that term means in most of Europe, especially on the periphery of Europe) New Democracy Party that got Greece into most of its fiscal problem and Papandreou’s Socialists who are at least making a feint at addressing these problems, so maybe not. However, I fear that the groups and parties that might benefit from the unrest would be far outside the spectrum delineated by the NDP and the Socialists. Come to think of it, this might not be a fear in all cases; it could be a hope if a sufficiently strong, free market oriented party (clearly outside the aforementioned spectrum in Greece) were to somehow benefit. But that looks like a very long shot.
At this point, though, who knows what could happen? Even though the Greek parliament has shown courage in passing the austerity measures, implementing them is another matter. And if they are implemented, how will the populace, which has been quite fat and happy on other people's dimes for a long time, react? On the international front, if things get much worse, countries like Portugal and Spain could say something like "Heck, we'll take a default before we’ll put up with this nonsense; it’s just not worth it.” The Greeks may yet come to the same conclusion.
One more thing…Greece isn’t experiencing a liquidity problem; it is experiencing a solvency problem. Greece is broke and these austerity measures will not address the problem. Greece restructures, defaults, or becomes a permanent ward of France and Germany. The really scary thing is thing is that, in pure numbers (deficits as a percent of GDP and even, in a stretch, debt as a percent of GDP), we’re not far behind. Fortunately (?), we do our fiscal mischief in the context of a currency we can print.
O tempora, o mores!
5/7/10
The "Red Menace" that loomed so large and powerful back when "Give 'em Hell Harry" was president has been sufficiently tamed, even to the point of assuming room temperature, that that particular manifestation of going off the deep end is beyond the realm of possibilities. But the appeal of various other leftist, or extreme rightist, parties has to intensify in Greece in the wake of the unrest. Ironically, though, it was the more conservative (whatever that term means in most of Europe, especially on the periphery of Europe) New Democracy Party that got Greece into most of its fiscal problem and Papandreou’s Socialists who are at least making a feint at addressing these problems, so maybe not. However, I fear that the groups and parties that might benefit from the unrest would be far outside the spectrum delineated by the NDP and the Socialists. Come to think of it, this might not be a fear in all cases; it could be a hope if a sufficiently strong, free market oriented party (clearly outside the aforementioned spectrum in Greece) were to somehow benefit. But that looks like a very long shot.
At this point, though, who knows what could happen? Even though the Greek parliament has shown courage in passing the austerity measures, implementing them is another matter. And if they are implemented, how will the populace, which has been quite fat and happy on other people's dimes for a long time, react? On the international front, if things get much worse, countries like Portugal and Spain could say something like "Heck, we'll take a default before we’ll put up with this nonsense; it’s just not worth it.” The Greeks may yet come to the same conclusion.
One more thing…Greece isn’t experiencing a liquidity problem; it is experiencing a solvency problem. Greece is broke and these austerity measures will not address the problem. Greece restructures, defaults, or becomes a permanent ward of France and Germany. The really scary thing is thing is that, in pure numbers (deficits as a percent of GDP and even, in a stretch, debt as a percent of GDP), we’re not far behind. Fortunately (?), we do our fiscal mischief in the context of a currency we can print.
O tempora, o mores!
Thursday, May 6, 2010
FINANCIAL DEVASTATION IS ONLY A MOUSE CLICK AWAY!
5/6/10
Perhaps this is incredibly obvious, but here goes:
I have no idea how the market is going to open tomorrow (Friday) morning. Further, I am beyond reasonably sure that there is plenty going on in addition to today’s much ballyhooed trading snafus (e.g., the growing realization, as the Pontificator has been saying since this “recovery” began in March of 2009, that what we are experiencing is a Potemkin, hair of the dog recovery, brought about by generous applications of the things that got us into trouble in the first place (gargantuan public and private debt, irresponsible inducements to spend ourselves further into financial oblivion, public policies that reward profligacy and punish financial rectitude, financial recklessness, aided by easy money from the Fed, by the wunderkinds who did so much to lead us down the primrose path, Greece, Portugal, Spain, other domestic and international political risks, etc.) that caused today’s market travails. But the real, lasting danger that today’s market action holds for the market has its roots in that (those) trading error(s). The average person is likely to say something akin to the following:
“Wait a minute. I’m supposed to trust my life savings, my kids’ college money, my retirement money to a system in which some bozo can enter a trade that is off by a factor of 1,000 and cause a 500 point drop in the Dow in five minutes? I’m supposed to have faith in a system so lacking in checks, balances, and oversights that such an absurdity can take place? Do I look stupid? And how did I allow myself to get lulled into such a false sense of security, how did I get to the point at which I had convinced myself that I should ‘ride the wave’ after the drubbing I took in 2007-2009? Forget it. It’s CDs for me from now on!”
Now, we all know how fickle the typical American is, and the last year or so has shown us how short his memory truly is. But this type of thing has the potential to be the straw that finally breaks the camel’s back. If we lose the average investor as a consequence, we are in BIG trouble.
Meanwhile, yours truly remains happy with his big (proportionally; I don’t have enough money to have big holdings, in the absolute sense, in anything) holdings in gold and TIPS, forsaking the waves for the lazy river to financial security.
Perhaps this is incredibly obvious, but here goes:
I have no idea how the market is going to open tomorrow (Friday) morning. Further, I am beyond reasonably sure that there is plenty going on in addition to today’s much ballyhooed trading snafus (e.g., the growing realization, as the Pontificator has been saying since this “recovery” began in March of 2009, that what we are experiencing is a Potemkin, hair of the dog recovery, brought about by generous applications of the things that got us into trouble in the first place (gargantuan public and private debt, irresponsible inducements to spend ourselves further into financial oblivion, public policies that reward profligacy and punish financial rectitude, financial recklessness, aided by easy money from the Fed, by the wunderkinds who did so much to lead us down the primrose path, Greece, Portugal, Spain, other domestic and international political risks, etc.) that caused today’s market travails. But the real, lasting danger that today’s market action holds for the market has its roots in that (those) trading error(s). The average person is likely to say something akin to the following:
“Wait a minute. I’m supposed to trust my life savings, my kids’ college money, my retirement money to a system in which some bozo can enter a trade that is off by a factor of 1,000 and cause a 500 point drop in the Dow in five minutes? I’m supposed to have faith in a system so lacking in checks, balances, and oversights that such an absurdity can take place? Do I look stupid? And how did I allow myself to get lulled into such a false sense of security, how did I get to the point at which I had convinced myself that I should ‘ride the wave’ after the drubbing I took in 2007-2009? Forget it. It’s CDs for me from now on!”
Now, we all know how fickle the typical American is, and the last year or so has shown us how short his memory truly is. But this type of thing has the potential to be the straw that finally breaks the camel’s back. If we lose the average investor as a consequence, we are in BIG trouble.
Meanwhile, yours truly remains happy with his big (proportionally; I don’t have enough money to have big holdings, in the absolute sense, in anything) holdings in gold and TIPS, forsaking the waves for the lazy river to financial security.
“JOEY, YOU GOT THAT LITTLE OLD DIME AND I GOT THIS BIG OLD NICKEL. BUT HERE’S WHAT I’M GONNA DO FOR YA...”
5/6/10
In the wake of the financial problems in Greece (See, by the way, my 2/10/10 post INGESTING THE FINANCIAL HEMLOCK for an early look at this latest “crisis.”), there is talk among some economic and financial observers of the demise of the euro. While the demise of the euro is not out of the question, the more logical, and foreseeable, outcome is, as numerous observers have pointed out, the shrinkage of the euro zone; i.e., the “strong” euro countries, such as Germany and France, will continue to use the euro while the “weak” current euro countries, such as Greece, Portugal, and Spain, will be shown the door.
But one has to ask how such a reversion away from the euro would be accomplished; it seems to this observer to be somewhat akin to trying to extract the ingredients from cake batter. One supposes that one could just declare that the currency of, say, Greece would, as of a certain date, no longer be the euro but instead the, say, drachma. Okay. So Greek citizens are supposed to exchange their euros for the brand new drachma. How long do you think the lines would be to complete the exchange from a currency anchored by the likes of Germany for a currency that was dragged back from the grave because its issuer was unable to maintain even a semblance of fiscal discipline, even by the increasingly lax, and/or ignored, rules of the eurozone? Being a believer in free markets, I am reasonably confident that there would be a market clearing exchange rate, but what would constitute “market clearing”? The rate at which every Greek is willing to abandon his or her euros for drachmas? Good luck. The rate at which the majority of Greeks would exchange their euros for drachmas? Such an outcome is far more likely than a “complete” exchange, but how low (or high, depending on one’s side of the trade) would that exchange rate be? Are we talking ‘80s Latin American “exchange” rates here? Perhaps. Even barring such a cataclysm, one can expect, or perhaps hope, that there would be a period of time when the two currencies would trade in a parallel fashion and Greece (and the other euro “exile” countries) would have, for most intents and purposes, two official currencies until the public becomes comfortable with the drachma. But suppose that day never comes, that the Greeks never achieve such a degree of comfort with the drachma. Suppose that the euro, which surely would be no powerhouse itself in the wake of the eurozone’s ignominious contraction, wins out in the currency competition and the drachma just fades away. What then? Further, what happens to all those euro denominated obligations of Greek (and maybe Spanish, Portuguese, etc.) entities, public and private, when Greece no longer uses the euro as its official currency? The nosedive Greek bonds have taken so far will look like a mere stumble; 9% or 10% or even 12% yields on Greek ten year government bonds will look impossibly rich.
The problems of a shrinkage of the eurozone appear insurmountable. Ironically, it would seem easier to just junk the euro altogether and have all the euro countries go back to their old currencies, declaring a date on which the euro is no longer acceptable as legal tender, as was done with the deutschemark, franc, and lira when the euro was created, adding a degree of compulsion to the conversion to the new currencies. As long as the euro exists as an alternative, it’s hard to see any current euro country successfully unscrambling the egg and ditching the euro in favor of its new, or old, currency.
Or am I missing something here? The question is not rhetorical.
In the wake of the financial problems in Greece (See, by the way, my 2/10/10 post INGESTING THE FINANCIAL HEMLOCK for an early look at this latest “crisis.”), there is talk among some economic and financial observers of the demise of the euro. While the demise of the euro is not out of the question, the more logical, and foreseeable, outcome is, as numerous observers have pointed out, the shrinkage of the euro zone; i.e., the “strong” euro countries, such as Germany and France, will continue to use the euro while the “weak” current euro countries, such as Greece, Portugal, and Spain, will be shown the door.
But one has to ask how such a reversion away from the euro would be accomplished; it seems to this observer to be somewhat akin to trying to extract the ingredients from cake batter. One supposes that one could just declare that the currency of, say, Greece would, as of a certain date, no longer be the euro but instead the, say, drachma. Okay. So Greek citizens are supposed to exchange their euros for the brand new drachma. How long do you think the lines would be to complete the exchange from a currency anchored by the likes of Germany for a currency that was dragged back from the grave because its issuer was unable to maintain even a semblance of fiscal discipline, even by the increasingly lax, and/or ignored, rules of the eurozone? Being a believer in free markets, I am reasonably confident that there would be a market clearing exchange rate, but what would constitute “market clearing”? The rate at which every Greek is willing to abandon his or her euros for drachmas? Good luck. The rate at which the majority of Greeks would exchange their euros for drachmas? Such an outcome is far more likely than a “complete” exchange, but how low (or high, depending on one’s side of the trade) would that exchange rate be? Are we talking ‘80s Latin American “exchange” rates here? Perhaps. Even barring such a cataclysm, one can expect, or perhaps hope, that there would be a period of time when the two currencies would trade in a parallel fashion and Greece (and the other euro “exile” countries) would have, for most intents and purposes, two official currencies until the public becomes comfortable with the drachma. But suppose that day never comes, that the Greeks never achieve such a degree of comfort with the drachma. Suppose that the euro, which surely would be no powerhouse itself in the wake of the eurozone’s ignominious contraction, wins out in the currency competition and the drachma just fades away. What then? Further, what happens to all those euro denominated obligations of Greek (and maybe Spanish, Portuguese, etc.) entities, public and private, when Greece no longer uses the euro as its official currency? The nosedive Greek bonds have taken so far will look like a mere stumble; 9% or 10% or even 12% yields on Greek ten year government bonds will look impossibly rich.
The problems of a shrinkage of the eurozone appear insurmountable. Ironically, it would seem easier to just junk the euro altogether and have all the euro countries go back to their old currencies, declaring a date on which the euro is no longer acceptable as legal tender, as was done with the deutschemark, franc, and lira when the euro was created, adding a degree of compulsion to the conversion to the new currencies. As long as the euro exists as an alternative, it’s hard to see any current euro country successfully unscrambling the egg and ditching the euro in favor of its new, or old, currency.
Or am I missing something here? The question is not rhetorical.
Wednesday, May 5, 2010
MR. SMITH GOES TO WASHINGTON?
5/4/10
Today’s (i.e., Wednesday, 5/4’s) Wall Street Journal ran an outstanding article on self-financed candidates for congressional seats (“Running Races on Their Own Dimes,” page A8). As the article states,
“Dozens of car dealers, Internet millionaires, real-estate developers and doctors have leapt into the fray. A few of them, including Mr. (Steve) Clark (a Texas telecom executive), have bet the bulk of their savings to win a seat in Congress.”
This plethora of such self-financed candidates is a very favorable development for the future of the Republic, but not for the reasons outlined by those interviewed in connection with the article.
Note that, when the article listed the trades of these self-financed aspiring pols, “big time corporate execs who paid themselves huge sums of money out of all proportion to their largely undetectable (unless substantially negative) contributions to the success of their companies due to the inattentiveness or innate conflicts of their lap dog boards of directors” was not included. No, those financing their campaigns are, for the most part, small business people who worked hard, bet heavy, acted responsibly and intelligently, and won big. They are, in sum, the kind of people who made America great and remain our last, best bulwark against the doom which almost certainly awaits our once stellar Republic. Note that they are not snot-nosed youngsters with thoroughly unjustified messiah complexes who, upon graduating from law school, went to work on the staff of a Congressperson until something opened up in the state legislature where they preened and posed for the cameras until something opened up in Congress where they spent the rest of their lives, all the while, if they were GOPers, singing fulsome praise for the private sector they worked so hard to avoid.
We need more people in Congress who have shown enough initiative and savvy to be able to make the dough necessary to self-finance a campaign and who have had to live with the obstacles the aforementioned professional politicians have thrown in their paths. Then perhaps we will have a Congress that includes more people whose skills extend beyond self-promotion and popinjayism and who know the real impact of the fundraising disguised as legislating that goes on atop the Hill.
On the other hand, I am not as sanguine as is Jeff Longstreth, campaign manager for Cleveland car dealer Tom Ganley who is running for the 13th District House seat in Ohio, on another beneficial aspect of self-funding. Mr. Longstreth contends
“When Tom (Ganley) gets to Washington, and we are confident he will, he won’t owe anyone anything.”
Well, perhaps not immediately. But note that most of these self-funders, including Mr. Ganley, are, understandably, loaning, rather than giving, money to their campaigns. Should they win their races (And I, perhaps obviously, share Mr. Longstreth’s hope that Mr. Ganley and others like him will win their races.), they will be raising money to pay back those loans, only from the much fortified position of an incumbent Congressperson. Then these guys will surely owe their contributors something. Perhaps given the character most of these aspirants have shown building their businesses, they will not, like so many of the current crop of parasites that inhabits Capitol Hill, become beholden to the people who financed their campaigns, or, if they do, that obligation will not extend beyond the ideological.
As a good friend and avid reader likes to say, we can only hope.
Today’s (i.e., Wednesday, 5/4’s) Wall Street Journal ran an outstanding article on self-financed candidates for congressional seats (“Running Races on Their Own Dimes,” page A8). As the article states,
“Dozens of car dealers, Internet millionaires, real-estate developers and doctors have leapt into the fray. A few of them, including Mr. (Steve) Clark (a Texas telecom executive), have bet the bulk of their savings to win a seat in Congress.”
This plethora of such self-financed candidates is a very favorable development for the future of the Republic, but not for the reasons outlined by those interviewed in connection with the article.
Note that, when the article listed the trades of these self-financed aspiring pols, “big time corporate execs who paid themselves huge sums of money out of all proportion to their largely undetectable (unless substantially negative) contributions to the success of their companies due to the inattentiveness or innate conflicts of their lap dog boards of directors” was not included. No, those financing their campaigns are, for the most part, small business people who worked hard, bet heavy, acted responsibly and intelligently, and won big. They are, in sum, the kind of people who made America great and remain our last, best bulwark against the doom which almost certainly awaits our once stellar Republic. Note that they are not snot-nosed youngsters with thoroughly unjustified messiah complexes who, upon graduating from law school, went to work on the staff of a Congressperson until something opened up in the state legislature where they preened and posed for the cameras until something opened up in Congress where they spent the rest of their lives, all the while, if they were GOPers, singing fulsome praise for the private sector they worked so hard to avoid.
We need more people in Congress who have shown enough initiative and savvy to be able to make the dough necessary to self-finance a campaign and who have had to live with the obstacles the aforementioned professional politicians have thrown in their paths. Then perhaps we will have a Congress that includes more people whose skills extend beyond self-promotion and popinjayism and who know the real impact of the fundraising disguised as legislating that goes on atop the Hill.
On the other hand, I am not as sanguine as is Jeff Longstreth, campaign manager for Cleveland car dealer Tom Ganley who is running for the 13th District House seat in Ohio, on another beneficial aspect of self-funding. Mr. Longstreth contends
“When Tom (Ganley) gets to Washington, and we are confident he will, he won’t owe anyone anything.”
Well, perhaps not immediately. But note that most of these self-funders, including Mr. Ganley, are, understandably, loaning, rather than giving, money to their campaigns. Should they win their races (And I, perhaps obviously, share Mr. Longstreth’s hope that Mr. Ganley and others like him will win their races.), they will be raising money to pay back those loans, only from the much fortified position of an incumbent Congressperson. Then these guys will surely owe their contributors something. Perhaps given the character most of these aspirants have shown building their businesses, they will not, like so many of the current crop of parasites that inhabits Capitol Hill, become beholden to the people who financed their campaigns, or, if they do, that obligation will not extend beyond the ideological.
As a good friend and avid reader likes to say, we can only hope.
Monday, May 3, 2010
“WHEN WILL WE EVER LEARN?”
5/3/10
I received the following News Alert from the Wall Street Journal this (i.e., Monday, 5/3) morning:
U.S. consumer spending rose twice as fast as income in March as saving dropped
to its lowest level in 18 months and a closely watched indicator of inflation
remained stable, the Commerce Department reported.
Consumer spending increased by 0.6% from the prior month, likely lifted by
government efforts to spur economic growth, but personal income rose just 0.3%
on a weak labor market. As a result, the U.S. saving rate dropped to 2.7%, its
lowest level since September 2008.
The mewing flock of analysts and deep thinkers in the financial media and the analytical community took this as unmitigated good news.
Give this just a little time; we’ll get savings rates below zero again. And, of course, the financial media and the analytical community will take our crossing that line as the financial equivalent of the Second Coming. We will be assured, again, by the mewing class that negative savings rates are both misleading and healthy because of our ever growing wealth in the forms of our houses and stock portfolios.
One is tempted to say that the American people have very short memories, but such an observation would assume that we indeed have memories.
I received the following News Alert from the Wall Street Journal this (i.e., Monday, 5/3) morning:
U.S. consumer spending rose twice as fast as income in March as saving dropped
to its lowest level in 18 months and a closely watched indicator of inflation
remained stable, the Commerce Department reported.
Consumer spending increased by 0.6% from the prior month, likely lifted by
government efforts to spur economic growth, but personal income rose just 0.3%
on a weak labor market. As a result, the U.S. saving rate dropped to 2.7%, its
lowest level since September 2008.
The mewing flock of analysts and deep thinkers in the financial media and the analytical community took this as unmitigated good news.
Give this just a little time; we’ll get savings rates below zero again. And, of course, the financial media and the analytical community will take our crossing that line as the financial equivalent of the Second Coming. We will be assured, again, by the mewing class that negative savings rates are both misleading and healthy because of our ever growing wealth in the forms of our houses and stock portfolios.
One is tempted to say that the American people have very short memories, but such an observation would assume that we indeed have memories.
Sunday, May 2, 2010
“(DON’T) THROW SOME MEAT AT ‘EM!”
5/2/10
I highly recommend Steve Chapman’s Commentary piece in today’s (i.e., Sunday, 5/2/10’s) Chicago Tribune, in which he argues that the “starving the beast” approach to government, long advocated by conservatives from Ronald Reagan to Sarah Palin simply does not work. I sent Steve the following letter in response to the article, and I think it bears posting on the Pontificator:
5/2/10
Great Commentary piece today, Steve, on the theory that we can somehow reduce the government by starving the beast, as advocated by deep thinker Sarah Palin. Especially brilliant was your application of basic microeconomic principles to government, to wit:
“If you want people to consume more of something, you reduce the price.”
We have reduced the price of government, or at least its immediate price, by living on the next generation’s credit card. Should we be surprised that government has grown exponentially, even under such self-styled champions of small government as Ronald Reagan and George W. Bush?
I used to eschew such schemes as balanced budget amendments as mere backdoor ways for politicians to justify tax increases, as in “Hey, I don’t want to raise taxes, but the Constitution now says I have to, so too bad for you.” Over the last few years (about ten, really), I have come to realize that there is little resistance to the growth of government if such expansion costs us the mere interest on the accompanying expenditures, especially at today’s low rates. But if people were forced to actually pay for the government that they, or their elected representatives, are demanding, the citizenry could do a more enlightened cost/benefit analysis. Under these circumstances, more government would lose in most cases.
Or perhaps by assuming that the current prime time TV addled generation of Americans can even approach an “enlightened cost/benefit” analysis, I am suspending my cynicism to a much greater degree than is warranted.
Thanks, Steve; keep up the good work.
I highly recommend Steve Chapman’s Commentary piece in today’s (i.e., Sunday, 5/2/10’s) Chicago Tribune, in which he argues that the “starving the beast” approach to government, long advocated by conservatives from Ronald Reagan to Sarah Palin simply does not work. I sent Steve the following letter in response to the article, and I think it bears posting on the Pontificator:
5/2/10
Great Commentary piece today, Steve, on the theory that we can somehow reduce the government by starving the beast, as advocated by deep thinker Sarah Palin. Especially brilliant was your application of basic microeconomic principles to government, to wit:
“If you want people to consume more of something, you reduce the price.”
We have reduced the price of government, or at least its immediate price, by living on the next generation’s credit card. Should we be surprised that government has grown exponentially, even under such self-styled champions of small government as Ronald Reagan and George W. Bush?
I used to eschew such schemes as balanced budget amendments as mere backdoor ways for politicians to justify tax increases, as in “Hey, I don’t want to raise taxes, but the Constitution now says I have to, so too bad for you.” Over the last few years (about ten, really), I have come to realize that there is little resistance to the growth of government if such expansion costs us the mere interest on the accompanying expenditures, especially at today’s low rates. But if people were forced to actually pay for the government that they, or their elected representatives, are demanding, the citizenry could do a more enlightened cost/benefit analysis. Under these circumstances, more government would lose in most cases.
Or perhaps by assuming that the current prime time TV addled generation of Americans can even approach an “enlightened cost/benefit” analysis, I am suspending my cynicism to a much greater degree than is warranted.
Thanks, Steve; keep up the good work.
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