2/24/11
Page A1 of today’s Wall Street Journal bears news of a proposal by the Bush/Obama Administration to take advantage of the foreclosure fiasco by forcing a settlement whereby loan servicers, primarily big banks like Bank of America, Wells Fargo, and JP Morgan Chase, would pay to have balances of underwater mortgage loans reduced to a level more in line with the values of the underlying collateral. The article stressed that “the costs of those write downs won’t be borne by investors who purchased mortgage-backed securities.” Instead, according to the proposed settlement, the banks that originated and/or who are currently servicing the loans will come up with $20 billion to bear the costs of the write-downs.
Hmm…
The presumption by the Bush/Obama Administration has to be that the banks are financially healthy enough to absorb another $20 billion in such charges. The presumption may very well be correct; after we bailed them out, the banks seem to be on their feet again and many, if not most, have repaid the loans extended to them when the Bushites, and the markets, assumed that the world would end if every counterparty were not made completely whole, no questions asked. But maybe, just maybe, the banks have solved their income statement problems; i.e., they are earning healthy profits, admittedly not much of a feat with the Fed keeping rates low and the yield curve steep. However, they may not have cleared up their balance sheet problems; i.e., the asset sections of such statements remain largely black boxes, still stuffed with assets that are hard to value but remain dependent on continuing recovery, and perhaps a heavy dollop of inflation, to be worth anything. If this is indeed the case, can the banks absorb another $20 billion of charges, as the Bush/Obama people seem to presume? And, if not, who will bail them out? (That last question is completely rhetorical.) So could we see, in this proposed settlement, a situation in which the holder of mortgage backed securities are made whole and the banks are made whole but the taxpayers are, again, left holding the bag? Given the Bush/Obama administration’s track record in such matters, don’t completely discount the possibility.
Thursday, February 24, 2011
“I SAY PUT EVERYTHING YOU GOT AT THOSE TWO TARGETS AND YOU CAN’T MISS!”
2/24/11
I sent the following note to my Investment students at Columbia College, urging them to read two articles in today’s Wall Street Journal. I thought my readers might enjoy the note, especially the first portion, which will remind loyal readers of the almost instantaneous seminality of my 9/3/10 post YOU PROBABLY DIDN’T HAVE TO BE TOLD THIS AFTER THE LAST FEW YEARS BUT…
Thanks.
TWO ARTICLES IN THE 2/24 WALL STREET JOURNAL
Two articles in today’s (i.e., Thursday, 2/24’s) Wall Street Journal merit your attention.
The first is found on the op-ed page, page A15 entitled “Why I Was Wrong About ‘Dow 36,000.’” In it, James K. Glassman repents of his former gormless enthusiasm for an all stock portfolio. This is a point on which I have been harping for years and that we, coincidentally, will be examining in Monday’s class. You would also do well to read the 9/3/10 post on my blog at
http://insightfulpontificator.blogspot.com/
entitled YOU PROBABLY DIDN’T HAVE TO BE TOLD THIS AFTER THE LAST FEW YEARS BUT… on the same subject. The larger issue here is to be wary of the investment shibboleths routinely tossed around by ingénues and, in the case of the likes of Mr. Glassman, by people who ought to know better.
The second article you should read, entitled “Illinois Bond Sale Gets Done At a Cost,” appears on page C1. This one, outlining the high interest rates our state has to pay on its borrowing, hits close to home, literally and figuratively, and gives you some exposure to bond ratings and taxable municipal bonds, a comparatively rare financial instrument.
In this article, its authors, Michael Corkery and Jeannette Neumann, explain
“Illinois tapped the taxable-debt market, where yields tend to be higher than in the tax-exempt municipal bond market, because selling bonds to prop up sagging pensions typically doesn’t qualify for tax-exempt status under the U.S. tax code, say bankers and state officials.”
Two questions:
First, by way of review, the easy one: Why do yields “tend to be higher” in the taxable municipal bond market than in the tax-exempt municipal bond market? We discussed this point extensively last week.
Second, the more difficult one: What other reason could Illinois have had to go the taxable, as opposed to the tax exempt, route for this bond issue? We discussed this point briefly last week.
We’ll discuss both these questions on Monday; the first person to answer the second one correctly might get an extra point or two on the mid-term.
Thanks.
I sent the following note to my Investment students at Columbia College, urging them to read two articles in today’s Wall Street Journal. I thought my readers might enjoy the note, especially the first portion, which will remind loyal readers of the almost instantaneous seminality of my 9/3/10 post YOU PROBABLY DIDN’T HAVE TO BE TOLD THIS AFTER THE LAST FEW YEARS BUT…
Thanks.
TWO ARTICLES IN THE 2/24 WALL STREET JOURNAL
Two articles in today’s (i.e., Thursday, 2/24’s) Wall Street Journal merit your attention.
The first is found on the op-ed page, page A15 entitled “Why I Was Wrong About ‘Dow 36,000.’” In it, James K. Glassman repents of his former gormless enthusiasm for an all stock portfolio. This is a point on which I have been harping for years and that we, coincidentally, will be examining in Monday’s class. You would also do well to read the 9/3/10 post on my blog at
http://insightfulpontificator.blogspot.com/
entitled YOU PROBABLY DIDN’T HAVE TO BE TOLD THIS AFTER THE LAST FEW YEARS BUT… on the same subject. The larger issue here is to be wary of the investment shibboleths routinely tossed around by ingénues and, in the case of the likes of Mr. Glassman, by people who ought to know better.
The second article you should read, entitled “Illinois Bond Sale Gets Done At a Cost,” appears on page C1. This one, outlining the high interest rates our state has to pay on its borrowing, hits close to home, literally and figuratively, and gives you some exposure to bond ratings and taxable municipal bonds, a comparatively rare financial instrument.
In this article, its authors, Michael Corkery and Jeannette Neumann, explain
“Illinois tapped the taxable-debt market, where yields tend to be higher than in the tax-exempt municipal bond market, because selling bonds to prop up sagging pensions typically doesn’t qualify for tax-exempt status under the U.S. tax code, say bankers and state officials.”
Two questions:
First, by way of review, the easy one: Why do yields “tend to be higher” in the taxable municipal bond market than in the tax-exempt municipal bond market? We discussed this point extensively last week.
Second, the more difficult one: What other reason could Illinois have had to go the taxable, as opposed to the tax exempt, route for this bond issue? We discussed this point briefly last week.
We’ll discuss both these questions on Monday; the first person to answer the second one correctly might get an extra point or two on the mid-term.
Thanks.
Wednesday, February 23, 2011
THE FIGHT’S OVER IN THE 47TH
2/23/11
So given that the mayor’s race yesterday was such an anticlimactic bust that would have prompted me to break out a copy of the great Peggy Lee’s “Is That All There Is?” if I had a copy of that classic (That I don’t is surprising even to me; I guess I have to learn how to use that i-Pod my wife gave me a few Christmases ago and download a copy, but I digress.), what race did I find the most interesting?
The most interesting election by far yesterday,, at least in hindsight, took place in the 47th Ward, in which I lived for a year in the early ‘80s and which is easily one of the nicest wards in the city, encompassing Lincoln Square, Welles Park, Queen of Angels Parish, Lutz’s Continental Pastry (still a delight even in its watered down current state), and other vestiges and old haunts of the city’s once thriving, almost dominant, German community. In the former “Fighting 47th,” Tom O’Donnell, despite having been handpicked by Alderman and Committeeman Gene Schulter to succeed him in the former post, was defeated outright by political neophyte Ameya Pawar, 50.8% to 43.5%. This shocked much of the political and media establishment, which assumed, understandably, that the Regular Democratic Organization in the old Fighting 47th could surely elect its handpicked candidate for alderman.
Looking at Mr. Schulter’s history, one can easily come up with some perhaps too conspiratorial reasons for Mr. O’Donnell’s loss; Mr. Schulter has something of a checkered political past. Most recently, he sought a seat on the Board of Review, formerly the Board of (Tax) Appeals, historically a notorious sinecure for hacks, hangers-on, toadies, lackeys, and former somebodies who are simply tired or who have run out of options for further slopping at the public trough. Mr. Schulter, however, was not selected for that post. Why? The best guess is that Mr. Schulter crossed the man he wanted to replace, Joe Berrios, when Mr. Schulter backed Mr. Berrios’s opponent, Forest Claypool, in the race for County Assessor. Mr. Berrios, as nominal head of the Cook County Regular Democratic Organization, has a certain degree of influence, even with the likes of Judge Timothy Evans, who was responsible for selecting the new Board of Review Commissioner.
Earlier in his career, Mr. Schulter crossed (Some might say “stabbed in the back,” but I didn’t…necessarily) his mentor, former 47th Ward Committeeman Ed Kelly, who wrested control of the ward from the Republicans in the ‘70s and installed the then young Mr. Schulter as alderman in 1975. In 2000, Mr. Schulter, not content with the aldermanic job, decided he wanted his mentor’s job as well and ran against Mr. Kelly for Committeeman. Mr. Kelly won by 155 votes after a bruising, highly personalized campaign that prompted Mr. Kelly to say of Mr. Schulter:
"He's a real piece of shit...We're going to retire him."
Source: Paul Green, Crain’s Chicago Business, 4/10/10
Mr. Kelly never succeeded in forcing Mr. Schulter out of the alderman’s job and retired as committeeman in 2003 to be quickly replaced by Mr. Schulter.
Gene Schulter’s a tough guy and an effective alderman and committeeman, but he couldn’t carry for his handpicked successor. Some might speculate that some of the people he crossed over the years, most pertinently Joe Berrios, or perhaps some old timers who came up under Ed Kelly and could still be harboring grudges against Schulter, may have secretly worked for Mr. Pawar only to defeat Mr. O’Donnell. This might make sense and surely would appeal to the conspiracy theorists out there.
While I like a good conspiracy as much as the next guy, I think that Gene Schulter’s inability to carry for Tom O’Donnell was nothing more than a manifestation of a phenomenon that was reflected in the mayor’s race, to wit, the old ward organizations, on life support for decades now, are finished. With the Shakman Decree and other legal action against patronage hiring, the ward bosses no longer have an effective mechanism for keeping the troops, and the voters, in line. It took years for the old loyalties and ways of doing things to finally die off, but die off they did. In the larger elections, like the mayor’s race, the media trumps the precinct captain. In the smaller races, the smaller media, and dedicated groups of volunteers, can, with only a little more difficulty, similarly defeat the precinct captain and the ward organizations.
When a guy as seemingly powerful as Gene Schulter can’t elect an alderman, you can stick a fork in the old-time ward organizations.
So given that the mayor’s race yesterday was such an anticlimactic bust that would have prompted me to break out a copy of the great Peggy Lee’s “Is That All There Is?” if I had a copy of that classic (That I don’t is surprising even to me; I guess I have to learn how to use that i-Pod my wife gave me a few Christmases ago and download a copy, but I digress.), what race did I find the most interesting?
The most interesting election by far yesterday,, at least in hindsight, took place in the 47th Ward, in which I lived for a year in the early ‘80s and which is easily one of the nicest wards in the city, encompassing Lincoln Square, Welles Park, Queen of Angels Parish, Lutz’s Continental Pastry (still a delight even in its watered down current state), and other vestiges and old haunts of the city’s once thriving, almost dominant, German community. In the former “Fighting 47th,” Tom O’Donnell, despite having been handpicked by Alderman and Committeeman Gene Schulter to succeed him in the former post, was defeated outright by political neophyte Ameya Pawar, 50.8% to 43.5%. This shocked much of the political and media establishment, which assumed, understandably, that the Regular Democratic Organization in the old Fighting 47th could surely elect its handpicked candidate for alderman.
Looking at Mr. Schulter’s history, one can easily come up with some perhaps too conspiratorial reasons for Mr. O’Donnell’s loss; Mr. Schulter has something of a checkered political past. Most recently, he sought a seat on the Board of Review, formerly the Board of (Tax) Appeals, historically a notorious sinecure for hacks, hangers-on, toadies, lackeys, and former somebodies who are simply tired or who have run out of options for further slopping at the public trough. Mr. Schulter, however, was not selected for that post. Why? The best guess is that Mr. Schulter crossed the man he wanted to replace, Joe Berrios, when Mr. Schulter backed Mr. Berrios’s opponent, Forest Claypool, in the race for County Assessor. Mr. Berrios, as nominal head of the Cook County Regular Democratic Organization, has a certain degree of influence, even with the likes of Judge Timothy Evans, who was responsible for selecting the new Board of Review Commissioner.
Earlier in his career, Mr. Schulter crossed (Some might say “stabbed in the back,” but I didn’t…necessarily) his mentor, former 47th Ward Committeeman Ed Kelly, who wrested control of the ward from the Republicans in the ‘70s and installed the then young Mr. Schulter as alderman in 1975. In 2000, Mr. Schulter, not content with the aldermanic job, decided he wanted his mentor’s job as well and ran against Mr. Kelly for Committeeman. Mr. Kelly won by 155 votes after a bruising, highly personalized campaign that prompted Mr. Kelly to say of Mr. Schulter:
"He's a real piece of shit...We're going to retire him."
Source: Paul Green, Crain’s Chicago Business, 4/10/10
Mr. Kelly never succeeded in forcing Mr. Schulter out of the alderman’s job and retired as committeeman in 2003 to be quickly replaced by Mr. Schulter.
Gene Schulter’s a tough guy and an effective alderman and committeeman, but he couldn’t carry for his handpicked successor. Some might speculate that some of the people he crossed over the years, most pertinently Joe Berrios, or perhaps some old timers who came up under Ed Kelly and could still be harboring grudges against Schulter, may have secretly worked for Mr. Pawar only to defeat Mr. O’Donnell. This might make sense and surely would appeal to the conspiracy theorists out there.
While I like a good conspiracy as much as the next guy, I think that Gene Schulter’s inability to carry for Tom O’Donnell was nothing more than a manifestation of a phenomenon that was reflected in the mayor’s race, to wit, the old ward organizations, on life support for decades now, are finished. With the Shakman Decree and other legal action against patronage hiring, the ward bosses no longer have an effective mechanism for keeping the troops, and the voters, in line. It took years for the old loyalties and ways of doing things to finally die off, but die off they did. In the larger elections, like the mayor’s race, the media trumps the precinct captain. In the smaller races, the smaller media, and dedicated groups of volunteers, can, with only a little more difficulty, similarly defeat the precinct captain and the ward organizations.
When a guy as seemingly powerful as Gene Schulter can’t elect an alderman, you can stick a fork in the old-time ward organizations.
Tuesday, February 22, 2011
“IT’S OVER, IT’S OVER!!!”
2/22/11
One can say “Wow!” after seeing how quickly and thoroughly Rahm Emanuel dispatched Gery Chico, Miguel del Valle, Carol Braun, et. al. in today’s election. But that’s not all one can say. A few of the things that struck me as interesting:
--Gery Chico carried only one ward on the north side, the 41st, a cop and fire fighter ward that is represented by Alderman Brian Doherty, the only Republican on the nominally non-partisan City Council (until the new Council is seated; Mr. Doherty elected to seek a seat in the state senate last year rather than run for reelection this year. He lost that Senate race. Chances are he will be replaced by a Democrat in an election that looks headed for a run-off.) and that prides itself on being a suburb in the city.
--Chico predictably won the following south side wards:
10th
11th
12th
13th
14th
19th
23rd
Of these, the 10th, 12th, 13th, and 14th have Hispanic majorities. The 11th has a Hispanic plurality. In the 23rd, Hispanics and whites are almost exactly evenly represented. The only majority white wards that Chico carried were the 41st and the 19th. The remaining wards that Chico won, the 22nd and 25th, are west side heavily Hispanic wards. In all the aforementioned wards, the Hispanic population is almost entirely Mexican, as is Gery Chico on his father’s side.
--Carol Moseley Braun carried no (0) wards, which, of course, means that she carried no black wards. In fact, she did not receive even 25% of the vote in any ward, unless something changes between now (10:00 on election night) and the final tallying of the votes.
--Combining the last two bullet points, can we conclude racial voting is dead? Probably, but not quite.
--Note that Chico carried the 11th Ward, the historic bailiwick of the Daley family that is still represented in the Cook County Democratic Central Committee by John Daley. He didn’t carry it by much and didn’t get a majority (46.6% Chico, 42.2% Emanuel), but he carried it. Does this mean that the Daley family didn’t back Emanuel, as was commonly assumed? No. The Daley family has bigger fish to fry than the 11th Ward.
--Note that Chico carried the 19th Ward, another ward associated with Daley allies. Does this mean that the Daleys weren’t backing Emanuel? No. Again, the Daleys have bigger fish to fry than the 19th Ward, and the ward, as more than a few political types have told me, is somewhat fractured, at least as regards the mayoral election. The 19th Ward’s going for Chico does mean, however, that the observations I made in my earlier post today regarding today’s trip through the ward that my wife and I took were insightful and my intuition was pretty decent.
--I am very proud of the fact that the 19th Ward had the highest turnout in the city at 74.3% (as of about 10:00 on election night). No ward was even close; the next highest turnouts were in the 13th Ward (Mike Madigan) at 58.3% and in the 23rd Ward (Mike Zalewski) at 58.1%. The only other wards that exceeded 50% turnout were the 41st, 45th, and 47th. The 19th may be fractured, but the powers-that-be can still turn out the vote. Further, the committeeman in the ward, Matt O’Shea, is crushing his opposition in the race to succeed Ginger Rugai as alderman.
--I hate speeches and I’m not all that fond of Rahm Emanuel, but Mr. Emanuel made a great victory speech. He ran a great campaign and I hope and pray that he will be a great mayor. This wonderful city that many of us love is facing enormous problems and Mr. Emanuel will need those prayers and any other support he can get. Let’s hope that Mr. Emanuel is sincere in his desire to do well in what promises to be a very tough job and is not planning to use the Fifth Floor as a stepping stone to the presidency. Let’s hope, but let’s not be naïve, either.
--Gery Chico did miserably tonight, despite the backing of some very powerful committeemen. He showed very little strength north of Madison Street. He carried only two wards, 19 and 41, without substantial Mexican populations. He didn’t carry any northwest side Puerto Rican wards, despite the backing of Congressman Luis Gutierrez, the city’s most visible Puerto Rican political leader. Gery Chico got trounced by Rahm Emanuel, who had the money to run commercials on television and radio almost incessantly and who had the backing of the mayor’s City Hall political apparatus. In the battle between the new politics of the television and the old politics of the precinct captain, between the new City Hall Machine and the old ward based Machine, the new politics trounced the old politics.
As I’ve said in this blog and in numerous speaking engagements, if Rahm Emanuel were to become mayor by employing money, media, and the Mayor, we could pretty much write the obituary of the old style, ward based political Machine in the city in which it managed to defy the odds and survive through most of the 20th century. So, folks, it’s done; life has imitated art; the story told in my novels, The Chairman and The Chairman’s Challenge, has been played out in real life. The old time Machine is now as dead as Vito Marzullo, Tom Keane, Bernie Neistein, Jake Arvey, Bill Dawson, Paddy Bauler, etc., etc..
One can say “Wow!” after seeing how quickly and thoroughly Rahm Emanuel dispatched Gery Chico, Miguel del Valle, Carol Braun, et. al. in today’s election. But that’s not all one can say. A few of the things that struck me as interesting:
--Gery Chico carried only one ward on the north side, the 41st, a cop and fire fighter ward that is represented by Alderman Brian Doherty, the only Republican on the nominally non-partisan City Council (until the new Council is seated; Mr. Doherty elected to seek a seat in the state senate last year rather than run for reelection this year. He lost that Senate race. Chances are he will be replaced by a Democrat in an election that looks headed for a run-off.) and that prides itself on being a suburb in the city.
--Chico predictably won the following south side wards:
10th
11th
12th
13th
14th
19th
23rd
Of these, the 10th, 12th, 13th, and 14th have Hispanic majorities. The 11th has a Hispanic plurality. In the 23rd, Hispanics and whites are almost exactly evenly represented. The only majority white wards that Chico carried were the 41st and the 19th. The remaining wards that Chico won, the 22nd and 25th, are west side heavily Hispanic wards. In all the aforementioned wards, the Hispanic population is almost entirely Mexican, as is Gery Chico on his father’s side.
--Carol Moseley Braun carried no (0) wards, which, of course, means that she carried no black wards. In fact, she did not receive even 25% of the vote in any ward, unless something changes between now (10:00 on election night) and the final tallying of the votes.
--Combining the last two bullet points, can we conclude racial voting is dead? Probably, but not quite.
--Note that Chico carried the 11th Ward, the historic bailiwick of the Daley family that is still represented in the Cook County Democratic Central Committee by John Daley. He didn’t carry it by much and didn’t get a majority (46.6% Chico, 42.2% Emanuel), but he carried it. Does this mean that the Daley family didn’t back Emanuel, as was commonly assumed? No. The Daley family has bigger fish to fry than the 11th Ward.
--Note that Chico carried the 19th Ward, another ward associated with Daley allies. Does this mean that the Daleys weren’t backing Emanuel? No. Again, the Daleys have bigger fish to fry than the 19th Ward, and the ward, as more than a few political types have told me, is somewhat fractured, at least as regards the mayoral election. The 19th Ward’s going for Chico does mean, however, that the observations I made in my earlier post today regarding today’s trip through the ward that my wife and I took were insightful and my intuition was pretty decent.
--I am very proud of the fact that the 19th Ward had the highest turnout in the city at 74.3% (as of about 10:00 on election night). No ward was even close; the next highest turnouts were in the 13th Ward (Mike Madigan) at 58.3% and in the 23rd Ward (Mike Zalewski) at 58.1%. The only other wards that exceeded 50% turnout were the 41st, 45th, and 47th. The 19th may be fractured, but the powers-that-be can still turn out the vote. Further, the committeeman in the ward, Matt O’Shea, is crushing his opposition in the race to succeed Ginger Rugai as alderman.
--I hate speeches and I’m not all that fond of Rahm Emanuel, but Mr. Emanuel made a great victory speech. He ran a great campaign and I hope and pray that he will be a great mayor. This wonderful city that many of us love is facing enormous problems and Mr. Emanuel will need those prayers and any other support he can get. Let’s hope that Mr. Emanuel is sincere in his desire to do well in what promises to be a very tough job and is not planning to use the Fifth Floor as a stepping stone to the presidency. Let’s hope, but let’s not be naïve, either.
--Gery Chico did miserably tonight, despite the backing of some very powerful committeemen. He showed very little strength north of Madison Street. He carried only two wards, 19 and 41, without substantial Mexican populations. He didn’t carry any northwest side Puerto Rican wards, despite the backing of Congressman Luis Gutierrez, the city’s most visible Puerto Rican political leader. Gery Chico got trounced by Rahm Emanuel, who had the money to run commercials on television and radio almost incessantly and who had the backing of the mayor’s City Hall political apparatus. In the battle between the new politics of the television and the old politics of the precinct captain, between the new City Hall Machine and the old ward based Machine, the new politics trounced the old politics.
As I’ve said in this blog and in numerous speaking engagements, if Rahm Emanuel were to become mayor by employing money, media, and the Mayor, we could pretty much write the obituary of the old style, ward based political Machine in the city in which it managed to defy the odds and survive through most of the 20th century. So, folks, it’s done; life has imitated art; the story told in my novels, The Chairman and The Chairman’s Challenge, has been played out in real life. The old time Machine is now as dead as Vito Marzullo, Tom Keane, Bernie Neistein, Jake Arvey, Bill Dawson, Paddy Bauler, etc., etc..
“KEEP COUNTING THE VOTES ‘TIL THEY COME OUT RIGHT!”
2/22/11
It’s Election Day in Chicago, and the first one in over twenty years featuring a race for mayor that means anything. I have assiduously avoided making predictions about this race, perhaps because the first one I made (“LONG LIVE THE KING!”, 9/7/10):
Forget Rahm Emanuel for mayor of Chicago. He’s been away a long time and never was much of a power in this town. I say this even after saying that money wins elections.
looks so bad at the moment. (Now, if that prediction turns out somehow to be right, I will look like a genius, but, like most pundits who look brilliant in hindsight, I will have turned out have been only lucky.) I explained what went wrong with that prediction in my 2/13/11 post, T MINUS 9:
I had no idea that the Daley family would go so thoroughly into the tank for Mr. Emanuel. They provided the organization, some troops on the ground, and even more money from the business interests in this city that put Mr. Emanuel into the position he currently enjoys.
The funny, and not in “ha-ha funny” type of way, is that the Daleys still deny, officially, that they are backing Emanuel. Loyal readers know that my estimate of the sharpness of the typical American voter approximates that of the late, great H.L. Mencken, but even I don’t take the voters for the fools that Rich Daley apparently does. But I digress.
So while I am making no predictions, I get the sense that the momentum is going toward a run-off. Why? None of these reasons is scientific in any way, but they are all I have, besides my gut:
--Even the punditocracy, which has been so sure for weeks, if not months, that its consanguineous champion, the mighty Rahm, would sweep into office today, has been hedging its bets, opining that Gery Chico just might get enough votes to force a run-off. Of course, they sniff at Mr. Chico’s chances against Mr. Terrific in a one-on-one race, but more on that below.
--My wife and I spent quite a bit of time in the 19th Ward today, which the aforementioned punditocracy considers a “Rahm ward,” a sentiment I shared (“LET’S LOOK AT THE RECORD…”, 1/18/11) until learning a few things in recent weeks. We drove through Beverly, West Beverly, Mt. Greenwood, and my old neighborhood that remains nameless but that is sometimes called West Morgan Park (How stilted does that sound?) or Beverly Woods, apparently after a restaurant that has become something of a neighborhood institution and a niagara of photo-ops for pols of all stripes, but mostly those of Irish-Catholic extraction. In each of these neighborhoods, as far as we could see, Chico signs outnumbered Rahm signs, and the disparity was huge in Mt. Greenwood, where cops and the fire fighters comprise an even greater share of the population than they do in other neighborhoods in the ward.
Two things surprised us more, though, than the sign count’s going in Chico’s direction. First, there weren’t that many political signs out in the 19th, that most political of wards. Could it be that those who don’t back Rahm don’t want certain people in the ward to know that they don’t back Rahm? Or do people just not care, either because of apathy (not likely) or a feeling that this race is over (more, but not highly, likely)? Second, we saw no Braun signs, even I my old neighborhood, which has a very large black population.
--From what I have heard so far, turnout is light city wide. Contrary to what the aforementioned punditocracy thinks, this would seem to favor Gery Chico. The cops and the fire fighters are more likely to vote than is the average person, and they favor Mr. Chico. Further, many of the most powerful ward organizations back Gery Chico, and they get their people to the polls no matter what.
This all might mean nothing, and perhaps I am talking my position. My position? Not that I am so enamored of Mr. Chico, but anyone who has read this blog over the last few months knows that I am a “stop-Rahm” guy through and through. Further, even if I supported Mr. Emanuel, I simply don’t want this to end; a continuing race gives me plenty of grist for this blog and helps sell my books, The Chairman and The Chairman’s Challenge.
Of course, if we do get a run-off, everything changes. But more, hopefully, on that later.
It’s Election Day in Chicago, and the first one in over twenty years featuring a race for mayor that means anything. I have assiduously avoided making predictions about this race, perhaps because the first one I made (“LONG LIVE THE KING!”, 9/7/10):
Forget Rahm Emanuel for mayor of Chicago. He’s been away a long time and never was much of a power in this town. I say this even after saying that money wins elections.
looks so bad at the moment. (Now, if that prediction turns out somehow to be right, I will look like a genius, but, like most pundits who look brilliant in hindsight, I will have turned out have been only lucky.) I explained what went wrong with that prediction in my 2/13/11 post, T MINUS 9:
I had no idea that the Daley family would go so thoroughly into the tank for Mr. Emanuel. They provided the organization, some troops on the ground, and even more money from the business interests in this city that put Mr. Emanuel into the position he currently enjoys.
The funny, and not in “ha-ha funny” type of way, is that the Daleys still deny, officially, that they are backing Emanuel. Loyal readers know that my estimate of the sharpness of the typical American voter approximates that of the late, great H.L. Mencken, but even I don’t take the voters for the fools that Rich Daley apparently does. But I digress.
So while I am making no predictions, I get the sense that the momentum is going toward a run-off. Why? None of these reasons is scientific in any way, but they are all I have, besides my gut:
--Even the punditocracy, which has been so sure for weeks, if not months, that its consanguineous champion, the mighty Rahm, would sweep into office today, has been hedging its bets, opining that Gery Chico just might get enough votes to force a run-off. Of course, they sniff at Mr. Chico’s chances against Mr. Terrific in a one-on-one race, but more on that below.
--My wife and I spent quite a bit of time in the 19th Ward today, which the aforementioned punditocracy considers a “Rahm ward,” a sentiment I shared (“LET’S LOOK AT THE RECORD…”, 1/18/11) until learning a few things in recent weeks. We drove through Beverly, West Beverly, Mt. Greenwood, and my old neighborhood that remains nameless but that is sometimes called West Morgan Park (How stilted does that sound?) or Beverly Woods, apparently after a restaurant that has become something of a neighborhood institution and a niagara of photo-ops for pols of all stripes, but mostly those of Irish-Catholic extraction. In each of these neighborhoods, as far as we could see, Chico signs outnumbered Rahm signs, and the disparity was huge in Mt. Greenwood, where cops and the fire fighters comprise an even greater share of the population than they do in other neighborhoods in the ward.
Two things surprised us more, though, than the sign count’s going in Chico’s direction. First, there weren’t that many political signs out in the 19th, that most political of wards. Could it be that those who don’t back Rahm don’t want certain people in the ward to know that they don’t back Rahm? Or do people just not care, either because of apathy (not likely) or a feeling that this race is over (more, but not highly, likely)? Second, we saw no Braun signs, even I my old neighborhood, which has a very large black population.
--From what I have heard so far, turnout is light city wide. Contrary to what the aforementioned punditocracy thinks, this would seem to favor Gery Chico. The cops and the fire fighters are more likely to vote than is the average person, and they favor Mr. Chico. Further, many of the most powerful ward organizations back Gery Chico, and they get their people to the polls no matter what.
This all might mean nothing, and perhaps I am talking my position. My position? Not that I am so enamored of Mr. Chico, but anyone who has read this blog over the last few months knows that I am a “stop-Rahm” guy through and through. Further, even if I supported Mr. Emanuel, I simply don’t want this to end; a continuing race gives me plenty of grist for this blog and helps sell my books, The Chairman and The Chairman’s Challenge.
Of course, if we do get a run-off, everything changes. But more, hopefully, on that later.
Thursday, February 17, 2011
PICKING UP THE GOVERNOR’S TAB…AGAIN
2/17/11
Governor Pat Quinn (no relation) presented his proposed budget yesterday and there were no surprises: The Governor wants to spend substantially more of your money even after he, and every other Democrat in Illinois, swore up and down that, in exchange for the gargantuan tax hike that was just crammed down the throats of the taxpayers (who acted surprised even after they elected the guy who promised a tax hike and even after they raised nary a peep about all the spending that was the rationalization for that tax hike, but I digress), they would hence forth be tight with the taxpayers’ buck. The legislature even installed some now obviously toothless and risible spending caps which the governor, kicking and screaming (wink, wink), agreed to in order to gain access to more of the fruits of your labor.
How much more does the governor want to spend? $1.7 billion, which is an increase of 4.8% if one uses the state’s operating budget as one’s denominator or 3.2% if one uses the state’s overall budget as a denominator. In any case, it’s real money, unless, of course, it’s not yours. But that’s not all; Mr. Quinn (no relation) also wants to use $1.4 billion of the $8.75 billion in new borrowing he proposes in order to refinance the state’s debt (at a loss, but he doesn’t mention that) not to indeed refinance the debt but to increase state spending.
Even Mike Madigan, House Speaker and Pat Quinn’s boss, has called out the governor on his spending, saying he has blown the spending caps by $750mm. Where Mr. Madigan got $750mm, I don’t know, but, predictably, it is less than half the $1.7 billion in additional net spending. One never knows whether Mr. Madigan’s new found fiscal rectitude has its origins more in politics or in governance, though they always mix in Mr. Madigan’s view of the world and one can usually bet safely by putting one’s chips on political motivations when dealing with Speaker Madigan, but I digress again.
In the case of Mr. Quinn (no relation), however, continuing to live in a fiscal fantasy world is not only bad governance in a state that is broke, but it is also terrible politics for at least two reasons. First, in the future, when Mr. Quinn puts that characteristic smirk on his face and asks the GOPers railing for spending reduction which programs they’d cut, these profiles in courage no longer need to stammer and yammer, confine their preaching to the choir, and then change the subject. They can now instead say that we could cut the budget by at least 3.1% if we simply eliminate Mr. Quinn’s proposed new spending. When Governor Quinn (no relation) goes into his usual soliloquy about how “vital” and “essential” this spending is and how people who “live pay check to pay check” (in many cases, more properly, “government check to government check,” but again I digress) will be hurt by this, some rare Republican with even a modest degree of courage can ask how these people are surviving now without this proposed additional spending. I said “can” because given the condition of the GOP in this state “will” would be too much of a stretch. Yet another digression, but a valuable and piquant one.
Second, Mr. Quinn’s continuing to insist on spending ever more of your money gives further credence, as if more were necessary, to the very legitimate criticism of the Governor that he has no experience in the world of those of us who contribute to the public purse; having spent his whole life on the public payroll (with the exception of those “jobs” he had when the door to public employment had been slammed in his face by a presumably smarter electorate or by a former boss, like Harold Washington, who was on to this popinjay), Mr. Quinn (no relation) knows only the world of those who take from the public payroll, who could not make a living were it not for some access to the budget of some level or branch of government.
Governor Pat Quinn (no relation) presented his proposed budget yesterday and there were no surprises: The Governor wants to spend substantially more of your money even after he, and every other Democrat in Illinois, swore up and down that, in exchange for the gargantuan tax hike that was just crammed down the throats of the taxpayers (who acted surprised even after they elected the guy who promised a tax hike and even after they raised nary a peep about all the spending that was the rationalization for that tax hike, but I digress), they would hence forth be tight with the taxpayers’ buck. The legislature even installed some now obviously toothless and risible spending caps which the governor, kicking and screaming (wink, wink), agreed to in order to gain access to more of the fruits of your labor.
How much more does the governor want to spend? $1.7 billion, which is an increase of 4.8% if one uses the state’s operating budget as one’s denominator or 3.2% if one uses the state’s overall budget as a denominator. In any case, it’s real money, unless, of course, it’s not yours. But that’s not all; Mr. Quinn (no relation) also wants to use $1.4 billion of the $8.75 billion in new borrowing he proposes in order to refinance the state’s debt (at a loss, but he doesn’t mention that) not to indeed refinance the debt but to increase state spending.
Even Mike Madigan, House Speaker and Pat Quinn’s boss, has called out the governor on his spending, saying he has blown the spending caps by $750mm. Where Mr. Madigan got $750mm, I don’t know, but, predictably, it is less than half the $1.7 billion in additional net spending. One never knows whether Mr. Madigan’s new found fiscal rectitude has its origins more in politics or in governance, though they always mix in Mr. Madigan’s view of the world and one can usually bet safely by putting one’s chips on political motivations when dealing with Speaker Madigan, but I digress again.
In the case of Mr. Quinn (no relation), however, continuing to live in a fiscal fantasy world is not only bad governance in a state that is broke, but it is also terrible politics for at least two reasons. First, in the future, when Mr. Quinn puts that characteristic smirk on his face and asks the GOPers railing for spending reduction which programs they’d cut, these profiles in courage no longer need to stammer and yammer, confine their preaching to the choir, and then change the subject. They can now instead say that we could cut the budget by at least 3.1% if we simply eliminate Mr. Quinn’s proposed new spending. When Governor Quinn (no relation) goes into his usual soliloquy about how “vital” and “essential” this spending is and how people who “live pay check to pay check” (in many cases, more properly, “government check to government check,” but again I digress) will be hurt by this, some rare Republican with even a modest degree of courage can ask how these people are surviving now without this proposed additional spending. I said “can” because given the condition of the GOP in this state “will” would be too much of a stretch. Yet another digression, but a valuable and piquant one.
Second, Mr. Quinn’s continuing to insist on spending ever more of your money gives further credence, as if more were necessary, to the very legitimate criticism of the Governor that he has no experience in the world of those of us who contribute to the public purse; having spent his whole life on the public payroll (with the exception of those “jobs” he had when the door to public employment had been slammed in his face by a presumably smarter electorate or by a former boss, like Harold Washington, who was on to this popinjay), Mr. Quinn (no relation) knows only the world of those who take from the public payroll, who could not make a living were it not for some access to the budget of some level or branch of government.
Tuesday, February 15, 2011
INTERVIEW ON VOCALO, 89.5 FM, CHICAGO
2/15/11
This morning, I was interviewed by Molly Adams and Brian Babylon on Vocalo, 89.5 FM, Chicago, on the federal deficit and the budget the President presented yesterday. Here is a link to that interview:
http://vocalo.org/blogs/archive/201102/digesting-deficit
You’ll enjoy the interview. While it covers a weighty and potentially turbid topic, Molly, Brian, and I did a pretty good job of making the interview entertaining as well as informative. I also want to thank one of my Investments students at Columbia, Jennifer Hyde, who interns at Vocalo, for setting up the interview.
Thanks.
This morning, I was interviewed by Molly Adams and Brian Babylon on Vocalo, 89.5 FM, Chicago, on the federal deficit and the budget the President presented yesterday. Here is a link to that interview:
http://vocalo.org/blogs/archive/201102/digesting-deficit
You’ll enjoy the interview. While it covers a weighty and potentially turbid topic, Molly, Brian, and I did a pretty good job of making the interview entertaining as well as informative. I also want to thank one of my Investments students at Columbia, Jennifer Hyde, who interns at Vocalo, for setting up the interview.
Thanks.
WALLOPING WONDERBOY
2/15/11
One has to stop to wonder if the political skills of Rahm Emanuel have been vastly overestimated by the squad of sycophants that passes for the local political press corps. How dare I even venture to question the “Rahm as Superman” scenario that our town’s fawning media have been painting ever since their man on a white horse deigned to favor us by volunteering to be anointed by the press, the Daley family, and the “business community” as our mayor?
One example of a choice that leaves one questioning Rahm’s judgment is the gratuitous slap that Little Big Man took at a fixture in the city’s power structure during last night’s debate:
“The City Council has to share in the sacrifice because residents will be sharing in sacrifice, which means if Ed Burke has six police officers, that just can’t continue. There will be reform of committees. There will be some committees closed, chairmanships will change.”
Given the proximity of the discussion of committee chairmanships’ changing to the mention of Ed Burke’s police detail, one does not have to be too imaginative to see which committee Mr. Emanuel considers ripe for a change. One doe not have to necessarily oppose the policy merits of Mr. Emanuel’s case against Mr. Burke to question its political merits.
By singling out Ed Burke, the most powerful alderman in the City Council, for special criticism, the young and perhaps naïve Mr. Emanuel is performing the political equivalent of waving a red flag in front of the proverbial bull. Mr. Burke has endorsed Gery Chico for mayor and, reportedly, is working hard to elect his former protégé, so Mr. Emanuel, not having spent much time in the last few years (or ever, for that matter) in Chicago, may feel he has nothing to lose by taking a stab at Mr. Burke. However, what Mr. Emanuel may be doing is transforming Mr. Burke’s support for Mr. Chico from a “I like Gery Chico; he used to work for me, I don’t want twenty years of another tyrannical mayor bent on emasculating the City Council, and I never miss an opportunity to stick a fork in the Daley family’s collective eye” type of support to a “I better do everything I possibly can to keep this North Shore sophisticate out of the Council because, if I don’t, I could lose much of what I value in my professional life, holy cow, this thing is desperate now” type of support. Not a great idea, especially considering the political and financial (Think The Burnham Committee and The Friends of Ed Burke; not the type of money that Rahm can raise in Washington, New York, and especially Hollywood, but certainly enough to make Mr. Chico competitive should there be a run-off.) resources that Mr. Burke can bring to bear.
Further, Ed Burke is not the only committeeman who is backing Gery Chico and who is decidedly uncomfortable with Mr. Emanuel. These fellas, too, can bring plenty to the election table and have been further incentivized to do so by the clear indication Mr. Emanuel gave of how he will treat the City Council when he said
“There will be some committees closed, chairmanships will change.”
Rahm’s fans, inspired by the notion that a genuine fine wine sipping North Shore transplant living in one of the city’s “premier” wards can stand up to, and even push around, those nasty, crude fellows who inhabit those tacky wards on the city’s fringe, are probably gloating at Mr. Emanuel’s jab at Mr. Burke, sure that it is yet another sign of Rahm’s toughness, of his “take no prisoners,” punish those who dare punish you approach to politics. I will only repeat quote what I said on this topic in my 9/10/10 post PRESCIENT MR. PONTIFICATOR? NOT YET.
Can you imagine Rahm Emanuel, even a Mayor Rahm Emanuel, “coming in, pointing his finger at people and calling them mother------s?” when the “them” in that sentence includes the likes of Mike Madigan, Ed Burke, Jimmy DeLeo, Jerry Joyce, Skinny Sheahan, John Daley, Dick Mell, Ed Smith, etc., etc.? That might work with the lily-livered twits who inhabit Washington, D.C., but, believe me, it’s not going to work in this town. And Emanuel’s just full enough of himself to think he can treat the real guys that way.
While that quote is somewhat dated by the news that the likes of Messrs. Daley and Mell are firmly in Rahm’s camp and hence will not feel the presumed new mayor’s wrath (but, perhaps, rather, his own obsequiousness, but I digress), the general point remains the same: Rahm can think he’s a real tough guy; after all, the press keeps telling him so. But he better not try this hard guy routine with the real hard guys who hold sway in this city.
While, as I have said ad nauseam during this campaign, making predictions about this race is precarious, but it sure looks like Mr. Emanuel will win this election, maybe even next week. So why is he running the risk of antagonizing Ed Burke, et. al.? Not only does he dial up their incentive to defeat him, but, should they fail, he will need these guys to run the city. It makes no sense, especially for the modern day Metternich the press would have us believe Rahm Emanuel has become.
One has to stop to wonder if the political skills of Rahm Emanuel have been vastly overestimated by the squad of sycophants that passes for the local political press corps. How dare I even venture to question the “Rahm as Superman” scenario that our town’s fawning media have been painting ever since their man on a white horse deigned to favor us by volunteering to be anointed by the press, the Daley family, and the “business community” as our mayor?
One example of a choice that leaves one questioning Rahm’s judgment is the gratuitous slap that Little Big Man took at a fixture in the city’s power structure during last night’s debate:
“The City Council has to share in the sacrifice because residents will be sharing in sacrifice, which means if Ed Burke has six police officers, that just can’t continue. There will be reform of committees. There will be some committees closed, chairmanships will change.”
Given the proximity of the discussion of committee chairmanships’ changing to the mention of Ed Burke’s police detail, one does not have to be too imaginative to see which committee Mr. Emanuel considers ripe for a change. One doe not have to necessarily oppose the policy merits of Mr. Emanuel’s case against Mr. Burke to question its political merits.
By singling out Ed Burke, the most powerful alderman in the City Council, for special criticism, the young and perhaps naïve Mr. Emanuel is performing the political equivalent of waving a red flag in front of the proverbial bull. Mr. Burke has endorsed Gery Chico for mayor and, reportedly, is working hard to elect his former protégé, so Mr. Emanuel, not having spent much time in the last few years (or ever, for that matter) in Chicago, may feel he has nothing to lose by taking a stab at Mr. Burke. However, what Mr. Emanuel may be doing is transforming Mr. Burke’s support for Mr. Chico from a “I like Gery Chico; he used to work for me, I don’t want twenty years of another tyrannical mayor bent on emasculating the City Council, and I never miss an opportunity to stick a fork in the Daley family’s collective eye” type of support to a “I better do everything I possibly can to keep this North Shore sophisticate out of the Council because, if I don’t, I could lose much of what I value in my professional life, holy cow, this thing is desperate now” type of support. Not a great idea, especially considering the political and financial (Think The Burnham Committee and The Friends of Ed Burke; not the type of money that Rahm can raise in Washington, New York, and especially Hollywood, but certainly enough to make Mr. Chico competitive should there be a run-off.) resources that Mr. Burke can bring to bear.
Further, Ed Burke is not the only committeeman who is backing Gery Chico and who is decidedly uncomfortable with Mr. Emanuel. These fellas, too, can bring plenty to the election table and have been further incentivized to do so by the clear indication Mr. Emanuel gave of how he will treat the City Council when he said
“There will be some committees closed, chairmanships will change.”
Rahm’s fans, inspired by the notion that a genuine fine wine sipping North Shore transplant living in one of the city’s “premier” wards can stand up to, and even push around, those nasty, crude fellows who inhabit those tacky wards on the city’s fringe, are probably gloating at Mr. Emanuel’s jab at Mr. Burke, sure that it is yet another sign of Rahm’s toughness, of his “take no prisoners,” punish those who dare punish you approach to politics. I will only repeat quote what I said on this topic in my 9/10/10 post PRESCIENT MR. PONTIFICATOR? NOT YET.
Can you imagine Rahm Emanuel, even a Mayor Rahm Emanuel, “coming in, pointing his finger at people and calling them mother------s?” when the “them” in that sentence includes the likes of Mike Madigan, Ed Burke, Jimmy DeLeo, Jerry Joyce, Skinny Sheahan, John Daley, Dick Mell, Ed Smith, etc., etc.? That might work with the lily-livered twits who inhabit Washington, D.C., but, believe me, it’s not going to work in this town. And Emanuel’s just full enough of himself to think he can treat the real guys that way.
While that quote is somewhat dated by the news that the likes of Messrs. Daley and Mell are firmly in Rahm’s camp and hence will not feel the presumed new mayor’s wrath (but, perhaps, rather, his own obsequiousness, but I digress), the general point remains the same: Rahm can think he’s a real tough guy; after all, the press keeps telling him so. But he better not try this hard guy routine with the real hard guys who hold sway in this city.
While, as I have said ad nauseam during this campaign, making predictions about this race is precarious, but it sure looks like Mr. Emanuel will win this election, maybe even next week. So why is he running the risk of antagonizing Ed Burke, et. al.? Not only does he dial up their incentive to defeat him, but, should they fail, he will need these guys to run the city. It makes no sense, especially for the modern day Metternich the press would have us believe Rahm Emanuel has become.
Sunday, February 13, 2011
T MINUS 9
2/13/11
My thoughts on Chicago’s mayoral election, nine days before the 2/22 first, and maybe final, round of that contest:
The race between Gery Chico and Rahm Emanuel is a manifestation, perhaps the culmination, of a two developments in Chicago politics that have been going on for at least the last fifty years and which are reflected in my books, The Chairman and The Chairman’s Challenge: the shift in power from the old ward based machines to a new machine centered on the fifth floor of City Hall and the demise of either type of political machine in favor of mass-media based political campaigns. Gery Chico is running with the support of a number of powerful ward organizations that form a geographic ring, with some interruptions (most notably the 19th Ward Organization, which is little more than an arm of the Daley organization), around the city from the lake on the Indiana border to the lake on the Evanston border. Rahm Emanuel is running with a huge media budget and the support of the Daley family and its minions. Rahm Emanuel is winning big and might, some say probably will, win outright next Tuesday with no need for a runoff. While the old ward based machines drew some hope from the victory they provided last Fall for their nominal chieftain, Joe Berrios, in his run for Cook County Assessor over Forest Claypool, who can best be described as a 2/3 scale Rahm Emanuel, the tides of history have more or less finished them off, at least in high profile races like the mayoral election.
There is also the Carol Moseley Braun conundrum. Some will say that her being an also-ran in this race is a reflection of the end of racial politics in this city. There may be something to that, but there is more to the increasingly obvious fact that Ms. Braun is a miserable, horrible, incompetent, caricature of a self-absorbed diva, or worse, who not only has no even remotely discernible qualifications to be mayor and has also apparently lost the one positive she brought to this contest: her former skill as a campaigner. Note I said “campaigner,” not “candidate,” two different things. She is a joke. A stronger black candidate (Danny Davis, for example, or even James Meeks) would still be in the race, and largely, and justifiably, on the basis of his or her race.
Ms. Braun presents a conundrum for Gery Chico. He wants to come out ahead of her for second place but doesn’t want her to implode to the point at which Rahm Emanuel wins outright on 2/22; as black support leaves Ms. Braun, it is more likely to go to Rahm Emanuel than to Gery Chico. So Mr. Chico has to go after Ms. Braun without going after her too vociferously, a very difficult task.
As loyal readers know, I am quite surprised that Rahm Emanuel may be on the verge of winning outright next Tuesday. As I wrote on 9/7/10, the day Mayor Daley announced he would not run for reelection (See my 9/7/10 post “LONG LIVE THE KING!”):
The big talk is about Rahm Emanuel. While I don’t like to make predictions, this is one I will make: Forget Rahm Emanuel for mayor of Chicago. He’s been away a long time and never was much of a power in this town. I say this even after saying that money wins elections.
What changed? I had no idea that the Daley family would go so thoroughly into the tank for Mr. Emanuel. They provided the organization, some troops on the ground, and even more money from the business interests in this city that put Mr. Emanuel into the position he currently enjoys.
An interesting question is why the Daley family, and their supporters in the 11th Ward, the 19th Ward, and most importantly, their loyal acolytes in the business community, is so enthusiastic for Mr. Emanuel. The obvious answer is that the city badly needs federal money to get itself out of the financial jam for which Mr. Daley is largely responsible and to keep Daley’s supporters and friends at least decently ladled with no-bid and lightly bid contracts. Mr. Emanuel, as a close friend of President Obama and other powers-that-be in the Imperial City, is seen as most likely to be able to extract that money from the federal government. The flaw in this line of reasoning is that the federal government itself is pretty much out of money and the new Congress is in no mood to borrow more money to dispense to the political organization that controls Chicago, but hope springs eternal in those who have made their fortunes through their close association with the people who have controlled City Hall for the last 21 years or so.
An alternative, and probably accompanying, theory regarding the Daleys’ support of Mr. Emanuel involves the psychology of Richard II. According to this theory, Mr. Daley is not nearly as proud of his Bridgeport roots as was his father. He far prefers the near north side and north shore crowd to the types of people who live in the wards of the city. He actually believes that the aforementioned “better” crowd actually likes him for him, garbled speech, still rough-hewn Bridgeport mannerisms, lack of a degree from what is considered up there to be a “better” institution, and all, not for what he has been able as mayor to do for this crowd. He actually believes that, when he is out of the mayor’s office, this crowd will still like him because they like Rich Daley, not Mayor Richard M. Daley. (Those of us who came out of the neighborhoods and once managed large pools of institutional money can relate to this feeling, but I digress.) Since Rahm Emanuel is the archetype of the “better” type of person, who grew up on the North Shore and lives in one of the gentrified neighborhoods that line our north side lake shore, it is natural that the Daleys would back him rather than a guy who grew up in one of the neighborhoods they’d rather forget. So Gery Chico and Miguel del Valle could forget about Mr. Daley’s support no matter what they did; they simply are not among the glitterati to which Mr. Daley either aspires or of which he genuinely believes he is a part. This is perhaps a harsh assessment, but some people believe it. Once again, what I’ll think about and what I’ll believe are two different things.
So how is this going to turn out? As I have said since this race started, it is foolish to make predictions at this time, or at any time, about this race. I will only point out a quote in the Chicago Tribune this morning in the Tribune (Sunday, 2/23, page 7) from Gery Chico:
“We have a lot of good friends in the wards that are working alongside (sic) us.”
And a quote in the same article from a “Chico adviser”:
“It’s a street battle. Get your people to the polls.”
These two are obviously talking their position, but please note that the unions are also largely behind Chico and the cops and firefighters have no love for Rahm Emanuel, largely because he is seen, increasingly correctly, as a surrogate for the Daleys. That combination of ward organization, union, and cop and firefighter support would have made this election a foregone conclusion thirty years ago. That it hasn’t had a remotely similar effect this year just shows how much the politics of this city have evolved; again, see my books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics.
My thoughts on Chicago’s mayoral election, nine days before the 2/22 first, and maybe final, round of that contest:
The race between Gery Chico and Rahm Emanuel is a manifestation, perhaps the culmination, of a two developments in Chicago politics that have been going on for at least the last fifty years and which are reflected in my books, The Chairman and The Chairman’s Challenge: the shift in power from the old ward based machines to a new machine centered on the fifth floor of City Hall and the demise of either type of political machine in favor of mass-media based political campaigns. Gery Chico is running with the support of a number of powerful ward organizations that form a geographic ring, with some interruptions (most notably the 19th Ward Organization, which is little more than an arm of the Daley organization), around the city from the lake on the Indiana border to the lake on the Evanston border. Rahm Emanuel is running with a huge media budget and the support of the Daley family and its minions. Rahm Emanuel is winning big and might, some say probably will, win outright next Tuesday with no need for a runoff. While the old ward based machines drew some hope from the victory they provided last Fall for their nominal chieftain, Joe Berrios, in his run for Cook County Assessor over Forest Claypool, who can best be described as a 2/3 scale Rahm Emanuel, the tides of history have more or less finished them off, at least in high profile races like the mayoral election.
There is also the Carol Moseley Braun conundrum. Some will say that her being an also-ran in this race is a reflection of the end of racial politics in this city. There may be something to that, but there is more to the increasingly obvious fact that Ms. Braun is a miserable, horrible, incompetent, caricature of a self-absorbed diva, or worse, who not only has no even remotely discernible qualifications to be mayor and has also apparently lost the one positive she brought to this contest: her former skill as a campaigner. Note I said “campaigner,” not “candidate,” two different things. She is a joke. A stronger black candidate (Danny Davis, for example, or even James Meeks) would still be in the race, and largely, and justifiably, on the basis of his or her race.
Ms. Braun presents a conundrum for Gery Chico. He wants to come out ahead of her for second place but doesn’t want her to implode to the point at which Rahm Emanuel wins outright on 2/22; as black support leaves Ms. Braun, it is more likely to go to Rahm Emanuel than to Gery Chico. So Mr. Chico has to go after Ms. Braun without going after her too vociferously, a very difficult task.
As loyal readers know, I am quite surprised that Rahm Emanuel may be on the verge of winning outright next Tuesday. As I wrote on 9/7/10, the day Mayor Daley announced he would not run for reelection (See my 9/7/10 post “LONG LIVE THE KING!”):
The big talk is about Rahm Emanuel. While I don’t like to make predictions, this is one I will make: Forget Rahm Emanuel for mayor of Chicago. He’s been away a long time and never was much of a power in this town. I say this even after saying that money wins elections.
What changed? I had no idea that the Daley family would go so thoroughly into the tank for Mr. Emanuel. They provided the organization, some troops on the ground, and even more money from the business interests in this city that put Mr. Emanuel into the position he currently enjoys.
An interesting question is why the Daley family, and their supporters in the 11th Ward, the 19th Ward, and most importantly, their loyal acolytes in the business community, is so enthusiastic for Mr. Emanuel. The obvious answer is that the city badly needs federal money to get itself out of the financial jam for which Mr. Daley is largely responsible and to keep Daley’s supporters and friends at least decently ladled with no-bid and lightly bid contracts. Mr. Emanuel, as a close friend of President Obama and other powers-that-be in the Imperial City, is seen as most likely to be able to extract that money from the federal government. The flaw in this line of reasoning is that the federal government itself is pretty much out of money and the new Congress is in no mood to borrow more money to dispense to the political organization that controls Chicago, but hope springs eternal in those who have made their fortunes through their close association with the people who have controlled City Hall for the last 21 years or so.
An alternative, and probably accompanying, theory regarding the Daleys’ support of Mr. Emanuel involves the psychology of Richard II. According to this theory, Mr. Daley is not nearly as proud of his Bridgeport roots as was his father. He far prefers the near north side and north shore crowd to the types of people who live in the wards of the city. He actually believes that the aforementioned “better” crowd actually likes him for him, garbled speech, still rough-hewn Bridgeport mannerisms, lack of a degree from what is considered up there to be a “better” institution, and all, not for what he has been able as mayor to do for this crowd. He actually believes that, when he is out of the mayor’s office, this crowd will still like him because they like Rich Daley, not Mayor Richard M. Daley. (Those of us who came out of the neighborhoods and once managed large pools of institutional money can relate to this feeling, but I digress.) Since Rahm Emanuel is the archetype of the “better” type of person, who grew up on the North Shore and lives in one of the gentrified neighborhoods that line our north side lake shore, it is natural that the Daleys would back him rather than a guy who grew up in one of the neighborhoods they’d rather forget. So Gery Chico and Miguel del Valle could forget about Mr. Daley’s support no matter what they did; they simply are not among the glitterati to which Mr. Daley either aspires or of which he genuinely believes he is a part. This is perhaps a harsh assessment, but some people believe it. Once again, what I’ll think about and what I’ll believe are two different things.
So how is this going to turn out? As I have said since this race started, it is foolish to make predictions at this time, or at any time, about this race. I will only point out a quote in the Chicago Tribune this morning in the Tribune (Sunday, 2/23, page 7) from Gery Chico:
“We have a lot of good friends in the wards that are working alongside (sic) us.”
And a quote in the same article from a “Chico adviser”:
“It’s a street battle. Get your people to the polls.”
These two are obviously talking their position, but please note that the unions are also largely behind Chico and the cops and firefighters have no love for Rahm Emanuel, largely because he is seen, increasingly correctly, as a surrogate for the Daleys. That combination of ward organization, union, and cop and firefighter support would have made this election a foregone conclusion thirty years ago. That it hasn’t had a remotely similar effect this year just shows how much the politics of this city have evolved; again, see my books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics.
Friday, February 11, 2011
NEED A LITTLE RAIN ON YOUR PARADE? I’M YOUR MAN!
2/11/11
As I write this, I’m watching the CNN coverage of the events in Egypt in the wake of Hosni Mubarak’s stepping down and, presumably, high-tailing it to Sharm El Shiekh. To call CNN’s treatment of the subject “coverage” is stretching the definition of the term; what I am watching is not reporting but unabashed cheerleading for the crowd (mob?) in Tahrir Square. Wolf Blitzer, Anderson Cooper, a bunch of people I don’t recognize (I am not a regular CNN, or Fox News, for that matter, watcher. I prefer news. When I want cheerleading, I will watch a Hawkeye or Fighting Illini game, but I digress.), and their identically minded colleagues simply cannot contain their joy at this turn of events. They, at one point, stopped speaking (an enormous sacrifice for these notables) to allow the viewers to just listen to the celebrating in the streets. They have urged viewers to simply “drink in” the sounds of unbridled joy of these “extraordinary developments.” One reporter tells us that this will be one of those occasions during which we will always remember where we were when it was taking the place. (The more sober among us remember where we were during many momentous events that took place before this ingenuous reporter was born. This gives us a perspective that these youthful cheerleaders have yet to attain. I only digress mildly here.) We are constantly being reminded of how peaceful the crowd is. We are told of the “dancing in the streets” that is taking place in Tahrir Square (What sane man “dances in the streets?” Is anyone actually “dancing” in any of these streets? I digress.) A 20 something protestor was put on the air to proclaim that “Egypt will be a democracy. You will be surprised at the progress we make.” He went on to say, and not at the prompting of the CNN crew, that “We are dreamers.” Never have truer words been uttered.
The reporters, of course, continue to talk of Mr. Mubarak yielding to the will of “the people,” confusing, as I said in yesterday’s (“DID YOU SEE WHAT I DID THERE?”) and February 3’s (AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II) posts, the will of those with the time and means to demonstrate in the street with the will of the people. Doubtless those Egyptians who are too busy scratching out a living to “dance in the streets” and/or those who own property and actually have a stake in the system wanted Mr. Mubarak to leave, but they wanted him to do so in a more orderly manner than that which is being cheered from the safe distances of New York and Washington. See again, yesterday’s post “DID YOU SEE WHAT I DID THERE?”
Listening to the CNN coverage of these events (and I suspect most of the hyper-yuppified media is engaging in similar fulsome, unapologetic cheerleading, but I can only listen to one network at a time), one gets the impression that, given the age and the mindset of the “reporters,” these estimables are fondly remembering those evenings of their youth, when their parents would gather them around the kitchen table and regale them with tales of their halcyon days of burning down our nation’s campuses in the ‘60s. How else does one account for the stunning, starry-eyed naiveté of such “coverage?” Further, given the brief comments from Joe Biden, who is old enough to know better, we can expect that President Obama’s speech will be more of the same ingenuous drivel. After all, Mr. Obama’s administration is peopled with similar descendents of the “peace, pot, and power to the people” crowd.
One supposes that none of these people have stopped to think that, with both Hosni Mubarak and Vice-President Omar Suleiman having stepped down, no one is in charge in Egypt. Supposedly, power has been handed to something called a governing council, composed primarily, but not exclusively, of the military and the judiciary, but since when has government by a committee, which in this case make take on many characteristics of revolutionary France’s Committee of Public Safety, or by the military been such a source of unbridled joy for the scions of the “Wow, man, like far out!” generation? The wise men at the CNN desk are now interviewing Mohammed El Baradei, the Rahm Emanuel of Egypt (See my 1/29/11 post “…HE’S AN EGYPTIAN…” ???) in the hopes that this poseur, who has spent scant time in Egypt the last twenty or so years, will somehow lead Egypt to nirvana. Good luck with that one, kids. Egypt had a chance, and only a chance, to be free had Mr. Mubarak’s exit been done in an orderly, reasoned, and sane manner. Now? The best bet now is chaos, chaos, and more chaos.
Have any of these silly people stopped to think that this sort of thing may, and likely will, spread to other places in the Middle East? Have they considered that the enormous limousines in which they are driven around actually use petroleum products for motivation? Nah; they are too caught up with their naïve conceptions of how the world ought to work…or not work
Two final notes:
I am now even more comfortable with my bullish oil and gold bets and am seeing rays of hope for my continuing bearishness on stocks as Wall Street, apparently increasingly populated by those ignorant or naïve about foreign affairs, apparently think what is happening in Egypt is great news.
In keeping with my overall approach to foreign policy, it looks like the Egyptians, not we, have a problem, as do lots of people in the Middle East. The best thing we can do is nothing. Doing anything is a no-win situation, as we are seeing in Egypt at this very moment. But don’t count on it; the Bush/Obama Administration, and the geniuses in Congress, are quite confident that their manifest wisdom does not stop at the water’s edge.
As I write this, I’m watching the CNN coverage of the events in Egypt in the wake of Hosni Mubarak’s stepping down and, presumably, high-tailing it to Sharm El Shiekh. To call CNN’s treatment of the subject “coverage” is stretching the definition of the term; what I am watching is not reporting but unabashed cheerleading for the crowd (mob?) in Tahrir Square. Wolf Blitzer, Anderson Cooper, a bunch of people I don’t recognize (I am not a regular CNN, or Fox News, for that matter, watcher. I prefer news. When I want cheerleading, I will watch a Hawkeye or Fighting Illini game, but I digress.), and their identically minded colleagues simply cannot contain their joy at this turn of events. They, at one point, stopped speaking (an enormous sacrifice for these notables) to allow the viewers to just listen to the celebrating in the streets. They have urged viewers to simply “drink in” the sounds of unbridled joy of these “extraordinary developments.” One reporter tells us that this will be one of those occasions during which we will always remember where we were when it was taking the place. (The more sober among us remember where we were during many momentous events that took place before this ingenuous reporter was born. This gives us a perspective that these youthful cheerleaders have yet to attain. I only digress mildly here.) We are constantly being reminded of how peaceful the crowd is. We are told of the “dancing in the streets” that is taking place in Tahrir Square (What sane man “dances in the streets?” Is anyone actually “dancing” in any of these streets? I digress.) A 20 something protestor was put on the air to proclaim that “Egypt will be a democracy. You will be surprised at the progress we make.” He went on to say, and not at the prompting of the CNN crew, that “We are dreamers.” Never have truer words been uttered.
The reporters, of course, continue to talk of Mr. Mubarak yielding to the will of “the people,” confusing, as I said in yesterday’s (“DID YOU SEE WHAT I DID THERE?”) and February 3’s (AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II) posts, the will of those with the time and means to demonstrate in the street with the will of the people. Doubtless those Egyptians who are too busy scratching out a living to “dance in the streets” and/or those who own property and actually have a stake in the system wanted Mr. Mubarak to leave, but they wanted him to do so in a more orderly manner than that which is being cheered from the safe distances of New York and Washington. See again, yesterday’s post “DID YOU SEE WHAT I DID THERE?”
Listening to the CNN coverage of these events (and I suspect most of the hyper-yuppified media is engaging in similar fulsome, unapologetic cheerleading, but I can only listen to one network at a time), one gets the impression that, given the age and the mindset of the “reporters,” these estimables are fondly remembering those evenings of their youth, when their parents would gather them around the kitchen table and regale them with tales of their halcyon days of burning down our nation’s campuses in the ‘60s. How else does one account for the stunning, starry-eyed naiveté of such “coverage?” Further, given the brief comments from Joe Biden, who is old enough to know better, we can expect that President Obama’s speech will be more of the same ingenuous drivel. After all, Mr. Obama’s administration is peopled with similar descendents of the “peace, pot, and power to the people” crowd.
One supposes that none of these people have stopped to think that, with both Hosni Mubarak and Vice-President Omar Suleiman having stepped down, no one is in charge in Egypt. Supposedly, power has been handed to something called a governing council, composed primarily, but not exclusively, of the military and the judiciary, but since when has government by a committee, which in this case make take on many characteristics of revolutionary France’s Committee of Public Safety, or by the military been such a source of unbridled joy for the scions of the “Wow, man, like far out!” generation? The wise men at the CNN desk are now interviewing Mohammed El Baradei, the Rahm Emanuel of Egypt (See my 1/29/11 post “…HE’S AN EGYPTIAN…” ???) in the hopes that this poseur, who has spent scant time in Egypt the last twenty or so years, will somehow lead Egypt to nirvana. Good luck with that one, kids. Egypt had a chance, and only a chance, to be free had Mr. Mubarak’s exit been done in an orderly, reasoned, and sane manner. Now? The best bet now is chaos, chaos, and more chaos.
Have any of these silly people stopped to think that this sort of thing may, and likely will, spread to other places in the Middle East? Have they considered that the enormous limousines in which they are driven around actually use petroleum products for motivation? Nah; they are too caught up with their naïve conceptions of how the world ought to work…or not work
Two final notes:
I am now even more comfortable with my bullish oil and gold bets and am seeing rays of hope for my continuing bearishness on stocks as Wall Street, apparently increasingly populated by those ignorant or naïve about foreign affairs, apparently think what is happening in Egypt is great news.
In keeping with my overall approach to foreign policy, it looks like the Egyptians, not we, have a problem, as do lots of people in the Middle East. The best thing we can do is nothing. Doing anything is a no-win situation, as we are seeing in Egypt at this very moment. But don’t count on it; the Bush/Obama Administration, and the geniuses in Congress, are quite confident that their manifest wisdom does not stop at the water’s edge.
Thursday, February 10, 2011
“DID YOU SEE WHAT I DID THERE?”
2/10/11
The Egyptian demonstrators are absolutely apoplectic that President Hosni Mubarak did not step down Thursday. The Bush/Obama Administration seems only slightly less incensed, not only because Mubarak has not stepped down but also because, by not doing so, he made the Administration look rather foolish after its intelligence apparatus and its Middle Eastern experts were assuring us all day Thursday that Mubarak’s exit was imminent. While I might be able to understand the disappointment, given that neither street mobs nor U.S. administrations are given to anything more than the veneer of what passes for thought, I’m not convinced that Mr. Mubarak has not given both the Egyptian people and the Bush/Obama most of what they purport to want.
As we have been incessantly reminded these last few days, the Egyptian constitution stipulates that if the president resigns, elections must be held within 60 days. None but the most starry-eyed optimist from an Ivy League faculty, the UN, or the Bush/Obama foreign policy apparatus believes that Egypt is even remotely ready for elections in 60 days. In order to prevent an election which would be a prelude to inevitable chaos, mob rule, or both, President Mubarak must at least nominally remain head of state in order to put off elections until the country is ready for such a still dicey exercise in self-rule in a country that hasn’t experienced anything like representative government in…well, ever. I suspect that is exactly what Mubarak is doing; i.e., remaining nominally in power, little more than a figurehead, while newly appointed Vice-President Omar Suleiman and other prominent figures, including elements of the opposition, in Egypt manage a transition to a point at which elections in Egypt have at least a remote chance of producing anything more than the usual one man, one vote, one time that constitutes “democracy” in much of the Third World. Mubarak has, I suspect, ceded power in all but the formal sense; he is no longer in charge. He will formally resign when those charged with managing the transition determine, rightly or wrongly, that Egypt is ready for elections. To do so earlier would result in only mayhem and misery.
The demonstrators are, understandably, uncomfortable with Mr. Suleiman, who has been a Mubarak henchman most of his adult life, and clearly have a hard time trusting any transition that he might be managing. They want Mubarak out of the country, or hanging on a gallows, and they want it now. But, as I said in my 2/3/11 post, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II, most of the media, and much of the foreign policy braintrust, in our country tend to confuse the wishes of those with enough time on their hands to demonstrate in the streets with the needs of a nation as a whole. Most Egyptians want stability, bread, and jobs. Mr. Mubarak’s hanging on the end of a rope is not going to provide any of those three, and neither will farcical elections in the name of “democracy.” While the typical Egyptian wants Mubarak out, he is more than willing, perhaps even demanding, that his exit be done in a manner that assures that Mubarak’s exit will effect an enduring change and leave the nation with a chance at the stability, bread, and jobs its people so crave.
The Egyptian demonstrators are absolutely apoplectic that President Hosni Mubarak did not step down Thursday. The Bush/Obama Administration seems only slightly less incensed, not only because Mubarak has not stepped down but also because, by not doing so, he made the Administration look rather foolish after its intelligence apparatus and its Middle Eastern experts were assuring us all day Thursday that Mubarak’s exit was imminent. While I might be able to understand the disappointment, given that neither street mobs nor U.S. administrations are given to anything more than the veneer of what passes for thought, I’m not convinced that Mr. Mubarak has not given both the Egyptian people and the Bush/Obama most of what they purport to want.
As we have been incessantly reminded these last few days, the Egyptian constitution stipulates that if the president resigns, elections must be held within 60 days. None but the most starry-eyed optimist from an Ivy League faculty, the UN, or the Bush/Obama foreign policy apparatus believes that Egypt is even remotely ready for elections in 60 days. In order to prevent an election which would be a prelude to inevitable chaos, mob rule, or both, President Mubarak must at least nominally remain head of state in order to put off elections until the country is ready for such a still dicey exercise in self-rule in a country that hasn’t experienced anything like representative government in…well, ever. I suspect that is exactly what Mubarak is doing; i.e., remaining nominally in power, little more than a figurehead, while newly appointed Vice-President Omar Suleiman and other prominent figures, including elements of the opposition, in Egypt manage a transition to a point at which elections in Egypt have at least a remote chance of producing anything more than the usual one man, one vote, one time that constitutes “democracy” in much of the Third World. Mubarak has, I suspect, ceded power in all but the formal sense; he is no longer in charge. He will formally resign when those charged with managing the transition determine, rightly or wrongly, that Egypt is ready for elections. To do so earlier would result in only mayhem and misery.
The demonstrators are, understandably, uncomfortable with Mr. Suleiman, who has been a Mubarak henchman most of his adult life, and clearly have a hard time trusting any transition that he might be managing. They want Mubarak out of the country, or hanging on a gallows, and they want it now. But, as I said in my 2/3/11 post, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II, most of the media, and much of the foreign policy braintrust, in our country tend to confuse the wishes of those with enough time on their hands to demonstrate in the streets with the needs of a nation as a whole. Most Egyptians want stability, bread, and jobs. Mr. Mubarak’s hanging on the end of a rope is not going to provide any of those three, and neither will farcical elections in the name of “democracy.” While the typical Egyptian wants Mubarak out, he is more than willing, perhaps even demanding, that his exit be done in a manner that assures that Mubarak’s exit will effect an enduring change and leave the nation with a chance at the stability, bread, and jobs its people so crave.
Monday, February 7, 2011
IRISH AMERICAN NEWS REVIEWER FRANK WEST ON QUINN’S BOOKS
2/7/11
Please pick up a copy of the February, 2011 issue of the Irish American News. The IAN is always a good read, but this month it is especially cogent and entertaining. Check out the review, on page 15, of both The Chairman and The Chairman’s Challenge by Frank West, the IAN’s long time, widely followed book reviewer. Frank has done an outstanding job capturing the essence of both the books and their lead character; you will find his reviews insightful, entertaining, and persuasive.
Thanks.
Please pick up a copy of the February, 2011 issue of the Irish American News. The IAN is always a good read, but this month it is especially cogent and entertaining. Check out the review, on page 15, of both The Chairman and The Chairman’s Challenge by Frank West, the IAN’s long time, widely followed book reviewer. Frank has done an outstanding job capturing the essence of both the books and their lead character; you will find his reviews insightful, entertaining, and persuasive.
Thanks.
“I’D JUST BE ANOTHER GUY FROM THE NEIGHBORHOOD…”
2/7/11
The residency requirement for all city workers excepting, seemingly, the mayor, is a hot topic in the mayoral race. Gery Chico has said he is willing to discuss, as part of contract negotiations, eliminating the requirement that city workers live in the city. Miguel Del Valle and Carol Moseley Braun seem to be adamantly against removing the requirement. Rahm Emanuel falls somewhere in the middle, but closer to Mr. Chico. Mr. Emanuel, for some curious reason, seems to be unusually reticent about residency requirements, but I digress.
I don’t have strong opinions on this issue. On the one hand, it seems pretty clear that perhaps the largest factor in keeping Chicago an attractive place for middle class families to live is the salubrious effect the residency requirement has had on the neighborhoods on the geographic fringes of the city. It’s not a stretch to imagine that a wholesale flight from these neighborhoods in the wake of a potential lifting of the residency requirement would leave our city a home only for the very well off and the poor, much like some of its post-industrial brethren.
On the other hand, if I were a cop, a firefighter, or other city worker, I would legitimately be asking why I had to make the financial sacrifice living in the city entails in order to keep the city viable. A logical answer might be “to preserve your jobs,” but there are many factors that go into keeping a city able to capably and effectively man a work force that have nothing to do with its workers and everything to do with its managers, as we are now seeing in Chicago. Further, since I have friends and family living with the residency requirement, it is easy for me to sympathize, and almost empathize, with the “Why me?” argument.
Two things, though, should be noted as we examine this issue. First, the immediate impact of a lifting of the residency requirement would be a decided negative for the cops, firefighters, and others who live in such places as Beverly, West Beverly, Mt. Greenwood, Archer Heights, Garfield Ridge, Jefferson Park, Norwood Park, Edison Park, etc.: a drop, and maybe a big drop, in the value of their homes as the “cop and fireman bid” vanishes. City workers know this, so let’s not assume that there is uniform enthusiasm for eliminating the residency requirement.
Second, even if the residency requirement is eliminated, it isn’t safe to assume that neighborhoods like the aforementioned will suddenly crumble. First, there is the factor posited in the last paragraph; people won’t sell their houses if doing so involves taking a big hit on the price of the home. But, probably more important, these are nice neighborhoods, great places to raise kids and just to enjoy a way of life that seems to be vanishing into the cul-de-sacs and subdivisions of the suburbs. As happy and content as I am living in the suburbs, and Naperville in particular, I have to admit to pangs of envy when visiting friends and family who still live in genuine city neighborhoods, and I know I am far from alone in those feelings. People who live in neighborhoods like the aforementioned, for the most part, like living there; their complaints have a lot more to do with the expense of living there, which arises from the artificial inflation of the prices in these neighborhoods that results from the “cop and fireman” bid wrought of the residency requirement. Thus we get back to the economic consequences for neighborhood residents of eliminating that bid.
The residency requirement for all city workers excepting, seemingly, the mayor, is a hot topic in the mayoral race. Gery Chico has said he is willing to discuss, as part of contract negotiations, eliminating the requirement that city workers live in the city. Miguel Del Valle and Carol Moseley Braun seem to be adamantly against removing the requirement. Rahm Emanuel falls somewhere in the middle, but closer to Mr. Chico. Mr. Emanuel, for some curious reason, seems to be unusually reticent about residency requirements, but I digress.
I don’t have strong opinions on this issue. On the one hand, it seems pretty clear that perhaps the largest factor in keeping Chicago an attractive place for middle class families to live is the salubrious effect the residency requirement has had on the neighborhoods on the geographic fringes of the city. It’s not a stretch to imagine that a wholesale flight from these neighborhoods in the wake of a potential lifting of the residency requirement would leave our city a home only for the very well off and the poor, much like some of its post-industrial brethren.
On the other hand, if I were a cop, a firefighter, or other city worker, I would legitimately be asking why I had to make the financial sacrifice living in the city entails in order to keep the city viable. A logical answer might be “to preserve your jobs,” but there are many factors that go into keeping a city able to capably and effectively man a work force that have nothing to do with its workers and everything to do with its managers, as we are now seeing in Chicago. Further, since I have friends and family living with the residency requirement, it is easy for me to sympathize, and almost empathize, with the “Why me?” argument.
Two things, though, should be noted as we examine this issue. First, the immediate impact of a lifting of the residency requirement would be a decided negative for the cops, firefighters, and others who live in such places as Beverly, West Beverly, Mt. Greenwood, Archer Heights, Garfield Ridge, Jefferson Park, Norwood Park, Edison Park, etc.: a drop, and maybe a big drop, in the value of their homes as the “cop and fireman bid” vanishes. City workers know this, so let’s not assume that there is uniform enthusiasm for eliminating the residency requirement.
Second, even if the residency requirement is eliminated, it isn’t safe to assume that neighborhoods like the aforementioned will suddenly crumble. First, there is the factor posited in the last paragraph; people won’t sell their houses if doing so involves taking a big hit on the price of the home. But, probably more important, these are nice neighborhoods, great places to raise kids and just to enjoy a way of life that seems to be vanishing into the cul-de-sacs and subdivisions of the suburbs. As happy and content as I am living in the suburbs, and Naperville in particular, I have to admit to pangs of envy when visiting friends and family who still live in genuine city neighborhoods, and I know I am far from alone in those feelings. People who live in neighborhoods like the aforementioned, for the most part, like living there; their complaints have a lot more to do with the expense of living there, which arises from the artificial inflation of the prices in these neighborhoods that results from the “cop and fireman” bid wrought of the residency requirement. Thus we get back to the economic consequences for neighborhood residents of eliminating that bid.
“THIS ISN’T NEW YORK CITY, OR THE SECOND CITY, OR SIN CITY, AND WE’RE CERTAINLY NO ONE’S EMERALD CITY”
2/7/11
I’d like to say that the Chrysler ad (almost mini-documentary about Detroit, really) that ran during the Super Bowl was the best ad that ran during the game, but that would be saying that the aforementioned ad merely stepped over a bar that happened to be rolling around on the ground only because there was not an indent into which it could fall. So I will say that the Chrysler ad was one of the best five or so commercials I have ever seen in my life. It was simply GREAT: awe inspiring, tear jerking, get up and cheer, let’s show ‘em what were made of, we can do what no one says we can do GREAT. And I say this despite the almost indetectible slap the ad made at the greatest city on earth.
Perhaps my enthusiasm for the ad had more to do with my affection for Detroit and the role it played in our nation’s achieving the greatness that it has since flushed down the sewer. But one did not have to be an enthusiast for Detroit to experience a flash of emotion for the paean the ad comprised for the industrial might that our country once displayed and may (but probably doesn’t) have a chance at recovering. Further, this ad was the greatest of a series of quite good Chrysler ads of late (“We are what we make.”), though I still haven’t decided what I think about the ad in which George Washington charges the British line in a hemi-equipped Challenger.
Despite the Detroit ad’s greatness, it did have two downsides. First, it was narrated by a young man with whom I was at first impressed, especially at the end in which he joined a choir on a very old and somewhat ornate stage, until my daughters informed me that this young man was none other than Eminem, a practitioner of the “art” of rap, a form of music emblematic of the decline of our society that the commercial argues can somehow be countered. At least the young man has some pride in the city whence he came, though, and is willing to show it, so he deserves some credit for that.
Second, the car featured at the very end of the ad, the Chrysler 200, is a mediocre entry for which no manual transmission is available, so it will be nearly impossible for me to act on my enthusiasm for the ad. Now, if the ad had featured the new Chrysler 300 and some day I were to get over my obsession with manual transmissions, then I might conceivably be able to tangibly act on my enthusiasm for the ad. But two points need making: First, Chrysler is trying to sell cars to millions of people, not to me and to those with my peculiar tastes in automotive transportation. Second, Chrysler is wise, at least for the time being, to emphasize its heritage, rather than its product line, in its ads.
I can’t wait to see this ad again; I’d hate to think it was a one-off for the Super Bowl.
I’d like to say that the Chrysler ad (almost mini-documentary about Detroit, really) that ran during the Super Bowl was the best ad that ran during the game, but that would be saying that the aforementioned ad merely stepped over a bar that happened to be rolling around on the ground only because there was not an indent into which it could fall. So I will say that the Chrysler ad was one of the best five or so commercials I have ever seen in my life. It was simply GREAT: awe inspiring, tear jerking, get up and cheer, let’s show ‘em what were made of, we can do what no one says we can do GREAT. And I say this despite the almost indetectible slap the ad made at the greatest city on earth.
Perhaps my enthusiasm for the ad had more to do with my affection for Detroit and the role it played in our nation’s achieving the greatness that it has since flushed down the sewer. But one did not have to be an enthusiast for Detroit to experience a flash of emotion for the paean the ad comprised for the industrial might that our country once displayed and may (but probably doesn’t) have a chance at recovering. Further, this ad was the greatest of a series of quite good Chrysler ads of late (“We are what we make.”), though I still haven’t decided what I think about the ad in which George Washington charges the British line in a hemi-equipped Challenger.
Despite the Detroit ad’s greatness, it did have two downsides. First, it was narrated by a young man with whom I was at first impressed, especially at the end in which he joined a choir on a very old and somewhat ornate stage, until my daughters informed me that this young man was none other than Eminem, a practitioner of the “art” of rap, a form of music emblematic of the decline of our society that the commercial argues can somehow be countered. At least the young man has some pride in the city whence he came, though, and is willing to show it, so he deserves some credit for that.
Second, the car featured at the very end of the ad, the Chrysler 200, is a mediocre entry for which no manual transmission is available, so it will be nearly impossible for me to act on my enthusiasm for the ad. Now, if the ad had featured the new Chrysler 300 and some day I were to get over my obsession with manual transmissions, then I might conceivably be able to tangibly act on my enthusiasm for the ad. But two points need making: First, Chrysler is trying to sell cars to millions of people, not to me and to those with my peculiar tastes in automotive transportation. Second, Chrysler is wise, at least for the time being, to emphasize its heritage, rather than its product line, in its ads.
I can’t wait to see this ad again; I’d hate to think it was a one-off for the Super Bowl.
Sunday, February 6, 2011
“TO SERVE MAN”
2/5/11
In his most recent television ad (not the ad in which President Obama tells us what a great guy Emanuel is, what a sacrifice it was for him and his wife to leave Chicago, and how Emanuel had no choice but to go to Washington to work for the President; the latter two aspects of that ad apparently have lost their usefulness), Rahm Emanuel states:
"We're going to deliver a service to the taxpayers. We're going to get them the best price for what they pay for, and that means making sure that everyone that works for the city government knows that they're (sic) actually a public servant representing and helping the people that pay them."
Source: http://www.nbcchicago.com/blogs/ward-room/chicago-fraternal-order-of-police-rahm-emanuel-ad-115330389.html#ixzz1DCp2sUsG
Who can argue with the sentiment Mr. Emanuel expresses regarding the taxpayers’ getting what they pay for? Taxpayers in Chicago are certainly used to getting, for the most part, good services but at a price that seems astronomical compared to that paid in other cities, hence the term “corruption tax.” However, the last part of that sentence, in which Rahm Emanuel, of all people, lectures city workers in Chicago that they are public servants, so reeks of hypocrisy and poor timing that it calls into question his temperament, political skills, and, certainly, the breadth of his experience and his capacity for self-evaluation.
City workers are indeed public servants and, if we are to examine the true nature of work and the reasons for which we are all here, all of us, regardless of our employers, are public servants, but I digress on the latter point. However, city workers do not need to hear Rahm Emanuel proclaiming pious platitudes on the virtues of public service for at least three reasons:
First, it is politicians, not typical public sector workers whose jobs consist of actual work rather than preening for the cameras and effecting concern for anyone who can write a campaign check or cast a vote, who most need reminding that they are public servants. The politician who goes into his or her field (“Politician” should not be a job at all in a democratic republic, such as America is supposed to be, but I digress.) out of a sense of public service, rather than a febrile, insatiable desire for self-aggrandizement, is a rare bird indeed.
Second, of the preening popinjay class that comprises our modern crop of politicians, Rahm Emanuel is among those most exposed to charges that his career in “public service” has achieved far more for him than for any of his constituents, however defined. He has made millions in his “investment banking” job that consisted of no more than selling his influence and in his high level patronage “job” on the board of Freddie Mac. That a guy who has made millions in the pursuit of “public service” should be telling the typical cop, fireman, garbage man, or snow plow driver that s/he should be mindful that s/he should be serving the public displays a degree of hypocrisy that is shocking even by standards of the typical Washington politician, the class into which Mr. Emanuel falls.
Third, the timing of Mr. Emanuel’s homily on public service was outrageously poor, coming right after what has been labeled the Blizzard of 2011. No one saw Mr. Emanuel responding to fires, or answering other 911 calls, down impassable streets, digging through the snow to get to garbage cans (which killed Streets and San man Mr. William King yesterday), or plowing snow encrusted streets morning, noon, and night. His job consists of feigning fawning concern in neighborhoods he had never heard of before moving back here to run for mayor and convincing us that he is a “real Chicagoan” while tallying up money flowing in from Hollywood, Washington, and New York. As Fraternal Order of Police President Mark Donahue put it,
“None of these public servants need a lecture from Rahm Emanuel on the meaning of public service."
If the obtuseness, hypocrisy, and tin-eared timing Mr. Emanuel displayed with this ad are indicative of his judgment and ability, perhaps he is not the political and administrative Superman that his sui generis cheerleaders in the city’s media are trying to convince us he is.
In his most recent television ad (not the ad in which President Obama tells us what a great guy Emanuel is, what a sacrifice it was for him and his wife to leave Chicago, and how Emanuel had no choice but to go to Washington to work for the President; the latter two aspects of that ad apparently have lost their usefulness), Rahm Emanuel states:
"We're going to deliver a service to the taxpayers. We're going to get them the best price for what they pay for, and that means making sure that everyone that works for the city government knows that they're (sic) actually a public servant representing and helping the people that pay them."
Source: http://www.nbcchicago.com/blogs/ward-room/chicago-fraternal-order-of-police-rahm-emanuel-ad-115330389.html#ixzz1DCp2sUsG
Who can argue with the sentiment Mr. Emanuel expresses regarding the taxpayers’ getting what they pay for? Taxpayers in Chicago are certainly used to getting, for the most part, good services but at a price that seems astronomical compared to that paid in other cities, hence the term “corruption tax.” However, the last part of that sentence, in which Rahm Emanuel, of all people, lectures city workers in Chicago that they are public servants, so reeks of hypocrisy and poor timing that it calls into question his temperament, political skills, and, certainly, the breadth of his experience and his capacity for self-evaluation.
City workers are indeed public servants and, if we are to examine the true nature of work and the reasons for which we are all here, all of us, regardless of our employers, are public servants, but I digress on the latter point. However, city workers do not need to hear Rahm Emanuel proclaiming pious platitudes on the virtues of public service for at least three reasons:
First, it is politicians, not typical public sector workers whose jobs consist of actual work rather than preening for the cameras and effecting concern for anyone who can write a campaign check or cast a vote, who most need reminding that they are public servants. The politician who goes into his or her field (“Politician” should not be a job at all in a democratic republic, such as America is supposed to be, but I digress.) out of a sense of public service, rather than a febrile, insatiable desire for self-aggrandizement, is a rare bird indeed.
Second, of the preening popinjay class that comprises our modern crop of politicians, Rahm Emanuel is among those most exposed to charges that his career in “public service” has achieved far more for him than for any of his constituents, however defined. He has made millions in his “investment banking” job that consisted of no more than selling his influence and in his high level patronage “job” on the board of Freddie Mac. That a guy who has made millions in the pursuit of “public service” should be telling the typical cop, fireman, garbage man, or snow plow driver that s/he should be mindful that s/he should be serving the public displays a degree of hypocrisy that is shocking even by standards of the typical Washington politician, the class into which Mr. Emanuel falls.
Third, the timing of Mr. Emanuel’s homily on public service was outrageously poor, coming right after what has been labeled the Blizzard of 2011. No one saw Mr. Emanuel responding to fires, or answering other 911 calls, down impassable streets, digging through the snow to get to garbage cans (which killed Streets and San man Mr. William King yesterday), or plowing snow encrusted streets morning, noon, and night. His job consists of feigning fawning concern in neighborhoods he had never heard of before moving back here to run for mayor and convincing us that he is a “real Chicagoan” while tallying up money flowing in from Hollywood, Washington, and New York. As Fraternal Order of Police President Mark Donahue put it,
“None of these public servants need a lecture from Rahm Emanuel on the meaning of public service."
If the obtuseness, hypocrisy, and tin-eared timing Mr. Emanuel displayed with this ad are indicative of his judgment and ability, perhaps he is not the political and administrative Superman that his sui generis cheerleaders in the city’s media are trying to convince us he is.
Thursday, February 3, 2011
YOU PARK IN THIS SPACE AND I’LL TURN YOUR CAR INTO A POPSICLE
2/3/11
There is a proud tradition in Chicago, and in other parts of the country, which some refer to as “dibs.” According to this tradition, someone who digs a parking spot out of the snow, sometimes, but not always, directly in front of his or her house, is entitled, by virtue of his or her effort, to exclusive use of that space for a limited period of time, usually a few days or until the snow melts to the point at which parking is no longer inhibited by the depth of the snow. The digger may claim those legitimate rights by placing lawn chairs, saw horses, old mops or brooms, or other bits of household detritus in that spot.
People are quite serious about defending their dibsian rights. Tales, perhaps, but probably not, apocryphal, tell of people who have removed the claims staking geegaws and parked in a space that someone else spent hours digging out returning to their cars to find them keyed, more seriously damaged, or frozen and rendered inaccessible by fulsome application of a garden hose to their vehicle in sub-freezing weather. Thus justice is served.
Some argue that the tradition of dibs is outrageous. This small and generally shy (especially at this time of the year) minority, many of whom live in high rise condos with parking garages, argue that no one owns the public streets and that therefore no one can claim a space. These self-styled arbiters of justice see no problem, apparently, with their parking their BMWs and Volvos in spaces someone else cleared for his or her own Chevy. So much for such self-proclaimed guardians’ of public virtue protestations of their sympathy for the “working person;” such sympathy apparently ends when it conflicts when their comforts or sense of entitlement, but I digress.
Not only do the proponents of dibs have the better of the moral end of this argument; they also can turn the dazzling urbanites’ high falutin’ property rights against them. I think it was Art Laffer who came up with the free market property rights argument in favor of dibs. I’m not sure it was Laffer, but I am sure it wasn’t I, but I wish I had come up with this argument because it is so beautiful in its simplicity, so clearly logical, and so in line with the free market philosophy to which I have adhered most of my life, as has, obviously, Art Laffer. This argument says that if a city (say, Chicago) wants to get the streets cleared quickly, the city ought to encourage and even enforce dibs. If one can claim a cleared space, then one would have an incentive to clear the space, thus spaces, and, collectively (bad adverb in this case, I know), the street get cleared. But if dibs are routinely ignored, then no one has an incentive to clear spaces, spaces don’t get cleared, and the streets remain snowbound. Note that, with encouraged or enforced dibs, the spaces get cleared not by the government but by private citizens acting in their own self-interest. Thus, encouragement or enforcement of dibs is an elegant free market way of resurrecting parking spaces after a heavy snow eliminates them with minimal expenditure of public funds.
Yes, it is a wonderful thing when neighbors help neighbors during snowfalls. Despite straining my back to the points of rather intense pain, I thoroughly enjoyed digging out from yesterday’s snowfall because it gave all of us neighbors a chance to help each other out, to dig out each other’s driveways and walkways, and to foster a sense of camaraderie and community spirit that some think doesn’t exist in the suburbs, where I now live. Not only did we have a good time, but the whole subdivision was up and operational by mid-afternoon because neighbors helped neighbors. And I am sure that many of the dibsters in the city were also out there helping their neighbors clear walks, alleys, and parking spaces to which those neighbors could stake a claim. But if we have to rely exclusively on the goodwill of others to get things done, few things will get done. Better to have a system, like dibs, which helps the process along by marrying private self-interest with the public good.
There is a proud tradition in Chicago, and in other parts of the country, which some refer to as “dibs.” According to this tradition, someone who digs a parking spot out of the snow, sometimes, but not always, directly in front of his or her house, is entitled, by virtue of his or her effort, to exclusive use of that space for a limited period of time, usually a few days or until the snow melts to the point at which parking is no longer inhibited by the depth of the snow. The digger may claim those legitimate rights by placing lawn chairs, saw horses, old mops or brooms, or other bits of household detritus in that spot.
People are quite serious about defending their dibsian rights. Tales, perhaps, but probably not, apocryphal, tell of people who have removed the claims staking geegaws and parked in a space that someone else spent hours digging out returning to their cars to find them keyed, more seriously damaged, or frozen and rendered inaccessible by fulsome application of a garden hose to their vehicle in sub-freezing weather. Thus justice is served.
Some argue that the tradition of dibs is outrageous. This small and generally shy (especially at this time of the year) minority, many of whom live in high rise condos with parking garages, argue that no one owns the public streets and that therefore no one can claim a space. These self-styled arbiters of justice see no problem, apparently, with their parking their BMWs and Volvos in spaces someone else cleared for his or her own Chevy. So much for such self-proclaimed guardians’ of public virtue protestations of their sympathy for the “working person;” such sympathy apparently ends when it conflicts when their comforts or sense of entitlement, but I digress.
Not only do the proponents of dibs have the better of the moral end of this argument; they also can turn the dazzling urbanites’ high falutin’ property rights against them. I think it was Art Laffer who came up with the free market property rights argument in favor of dibs. I’m not sure it was Laffer, but I am sure it wasn’t I, but I wish I had come up with this argument because it is so beautiful in its simplicity, so clearly logical, and so in line with the free market philosophy to which I have adhered most of my life, as has, obviously, Art Laffer. This argument says that if a city (say, Chicago) wants to get the streets cleared quickly, the city ought to encourage and even enforce dibs. If one can claim a cleared space, then one would have an incentive to clear the space, thus spaces, and, collectively (bad adverb in this case, I know), the street get cleared. But if dibs are routinely ignored, then no one has an incentive to clear spaces, spaces don’t get cleared, and the streets remain snowbound. Note that, with encouraged or enforced dibs, the spaces get cleared not by the government but by private citizens acting in their own self-interest. Thus, encouragement or enforcement of dibs is an elegant free market way of resurrecting parking spaces after a heavy snow eliminates them with minimal expenditure of public funds.
Yes, it is a wonderful thing when neighbors help neighbors during snowfalls. Despite straining my back to the points of rather intense pain, I thoroughly enjoyed digging out from yesterday’s snowfall because it gave all of us neighbors a chance to help each other out, to dig out each other’s driveways and walkways, and to foster a sense of camaraderie and community spirit that some think doesn’t exist in the suburbs, where I now live. Not only did we have a good time, but the whole subdivision was up and operational by mid-afternoon because neighbors helped neighbors. And I am sure that many of the dibsters in the city were also out there helping their neighbors clear walks, alleys, and parking spaces to which those neighbors could stake a claim. But if we have to rely exclusively on the goodwill of others to get things done, few things will get done. Better to have a system, like dibs, which helps the process along by marrying private self-interest with the public good.
AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II
2/3/11
One fears that the media and the Bush/Obama Administration, comprised of so many young people who are so far removed from the lives of not only the average Egyptian but also the average American, are making a mistake that has been repeated throughout our history by isolated policymakers and even more isolated press corps: They are confusing the opinions and actions of those who have enough time to demonstrate in the streets with the opinions and thoughts of those who are too busy working for a living to get the attention of the cameras.
Doubtless the anti-Mubarak demonstrators have legitimate grievances. And doubtless many, if not most, of the counter-demonstrators are thugs hired by Mubarak and his henchmen. But the average Egyptian has other things on his mind, like survival. (See today’s other post on Egypt, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US.) Today’s Wall Street Journal quotes numerous typical Egyptians who, while no friends of Mubarak, are satisfied with his offer not to stand for reelection and who fear that the demonstrators are going too far:
--Ahmed Sharif, a 47 year old engineer, marching with his wife and twenty year old daughter: “If the protestors in Tahir Square don’t leave, we will drive them out. He (President Hosni Mubarak) has made some mistakes but I respect him.”
--Mr. Sharif’s daughter, Noha: “He (Mubarak) has said he is open to discussion, so why should we not meet with him? He wants a peaceful transition.”
--Tamer Sadek, a 51 year old owner of a real estate and hotel firm: “He agreed to all of their demands, so what right does anyone have to tell him to leave?”
--Giehan Shoukry, a 38 year old public relations worker for a construction company: “We appreciate what the youth have done to bring this about, but enough is enough.”
--Mohammed Sayed, a 37 year old “supporter of Mr. Mubarak”: “The situation is unacceptable. The majority of protestors are young people and aren’t aware of their actions and consequences.”
Too bad we didn’t have people like Mr. Sayed around in this country in the ‘60s when my generation was in college and knew everything.
One fears that the media and the Bush/Obama Administration, comprised of so many young people who are so far removed from the lives of not only the average Egyptian but also the average American, are making a mistake that has been repeated throughout our history by isolated policymakers and even more isolated press corps: They are confusing the opinions and actions of those who have enough time to demonstrate in the streets with the opinions and thoughts of those who are too busy working for a living to get the attention of the cameras.
Doubtless the anti-Mubarak demonstrators have legitimate grievances. And doubtless many, if not most, of the counter-demonstrators are thugs hired by Mubarak and his henchmen. But the average Egyptian has other things on his mind, like survival. (See today’s other post on Egypt, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US.) Today’s Wall Street Journal quotes numerous typical Egyptians who, while no friends of Mubarak, are satisfied with his offer not to stand for reelection and who fear that the demonstrators are going too far:
--Ahmed Sharif, a 47 year old engineer, marching with his wife and twenty year old daughter: “If the protestors in Tahir Square don’t leave, we will drive them out. He (President Hosni Mubarak) has made some mistakes but I respect him.”
--Mr. Sharif’s daughter, Noha: “He (Mubarak) has said he is open to discussion, so why should we not meet with him? He wants a peaceful transition.”
--Tamer Sadek, a 51 year old owner of a real estate and hotel firm: “He agreed to all of their demands, so what right does anyone have to tell him to leave?”
--Giehan Shoukry, a 38 year old public relations worker for a construction company: “We appreciate what the youth have done to bring this about, but enough is enough.”
--Mohammed Sayed, a 37 year old “supporter of Mr. Mubarak”: “The situation is unacceptable. The majority of protestors are young people and aren’t aware of their actions and consequences.”
Too bad we didn’t have people like Mr. Sayed around in this country in the ‘60s when my generation was in college and knew everything.
AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US
2/3/11
One has to be very careful when considering the events currently taking place in Egypt and should scrutinize them for clues regarding ramifications for our economy beyond the obvious.
The press would have you believe that the current bout of upheaval in the street in Egypt has its origins in discontent with President Hosni Mubarak’s trampling on the fundamental rights of the people, denying them the democracy they so ardently desire (See today’ other post on Egypt, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II) with a little bit of economic discontent thrown in for good measure. But since when has Hosni Mubarak ever been respectful of people’s rights? When was he ever, since taking power, NOT been a dictator? And when have economic conditions ever been good for the typical Egyptian, who works, if he has a job, for slave wages?
The above questions are, of course, rhetorical. Something must be different today in Egypt to have sparked the demonstrations and counter-demonstrations that will lead to Mr. Mubarak’s ouster, one way or the other. What is different?
It seems to me that the skyrocketing prices of basic food commodities were the trigger in this case. Note that Egypt is both a poor country and the world’s largest importer of wheat. When the price of wheat goes up, the price of bread goes up. In a country like the United States, we hardly notice the change in the price of wheat because most of our foods, including bread, are highly processed and thus the prices of the underlying commodities are negligible in the retail price of the product. Further, in any advanced country, food is a relatively small portion of our household budgets. But in Egypt, where many, if not most, people buy their bread from local bakeries every day soon after it emerges from the oven, food comprises the majority of a household’s expenditures, and people are barely scraping by, an increase in the price of wheat is a BIG deal. It makes a tough life nearly unsustainable and obviously fosters discontent. From the comfort of the West, we can tut-tut about abuse of rights all we want, but for poor people just scraping by, the price of their daily bread is a far higher priority, as Mr. Maslow argued some time ago in his hierarchy of needs.
So what does this have to do with us, other than its obvious humanitarian implications? Perhaps we shouldn’t be so smug in our confidence that the skyrocketing prices of commodities are inconsequential because they have nothing to do with “core” inflation. Not only do increasing commodity prices have geopolitical ramifications, but they don’t always stay limited to commodity prices. Note two articles in today’s (i.e., Thursday, 2/3’s) Wall Street Journal: “Fearing Inflation, Firms Stocking Up,” page C1, and “Steel-Price (sic) Rises Pressure Supply Chain,” page B1.
One has to be very careful when considering the events currently taking place in Egypt and should scrutinize them for clues regarding ramifications for our economy beyond the obvious.
The press would have you believe that the current bout of upheaval in the street in Egypt has its origins in discontent with President Hosni Mubarak’s trampling on the fundamental rights of the people, denying them the democracy they so ardently desire (See today’ other post on Egypt, AFTER ALL THESE CENTURIES, THE EGYPTIANS STILL HAVE SOMETHING TO TEACH US, PART II) with a little bit of economic discontent thrown in for good measure. But since when has Hosni Mubarak ever been respectful of people’s rights? When was he ever, since taking power, NOT been a dictator? And when have economic conditions ever been good for the typical Egyptian, who works, if he has a job, for slave wages?
The above questions are, of course, rhetorical. Something must be different today in Egypt to have sparked the demonstrations and counter-demonstrations that will lead to Mr. Mubarak’s ouster, one way or the other. What is different?
It seems to me that the skyrocketing prices of basic food commodities were the trigger in this case. Note that Egypt is both a poor country and the world’s largest importer of wheat. When the price of wheat goes up, the price of bread goes up. In a country like the United States, we hardly notice the change in the price of wheat because most of our foods, including bread, are highly processed and thus the prices of the underlying commodities are negligible in the retail price of the product. Further, in any advanced country, food is a relatively small portion of our household budgets. But in Egypt, where many, if not most, people buy their bread from local bakeries every day soon after it emerges from the oven, food comprises the majority of a household’s expenditures, and people are barely scraping by, an increase in the price of wheat is a BIG deal. It makes a tough life nearly unsustainable and obviously fosters discontent. From the comfort of the West, we can tut-tut about abuse of rights all we want, but for poor people just scraping by, the price of their daily bread is a far higher priority, as Mr. Maslow argued some time ago in his hierarchy of needs.
So what does this have to do with us, other than its obvious humanitarian implications? Perhaps we shouldn’t be so smug in our confidence that the skyrocketing prices of commodities are inconsequential because they have nothing to do with “core” inflation. Not only do increasing commodity prices have geopolitical ramifications, but they don’t always stay limited to commodity prices. Note two articles in today’s (i.e., Thursday, 2/3’s) Wall Street Journal: “Fearing Inflation, Firms Stocking Up,” page C1, and “Steel-Price (sic) Rises Pressure Supply Chain,” page B1.
ASK NOT WHAT YOU CAN DO FOR YOUR COUNTRY; ASK WHAT YOUR COUNTRY CAN DO FOR YOU
2/3/11
Today’s Wall Street Journal (Thursday, 2/3/11, page C1) reports that a panel of Wall Street experts is urging the Treasury to take advantage of current low interest rates by issuing plenty of long term debt and even to consider extending the 30 year limit on maturities of new treasury debt, perhaps extending maturities to 100 years.
This idea makes all the financial sense in the world. Why not save the taxpayers money by locking in today’s low rates for a century? But it won’t happen. Why? Because the typical politicians’ time frame is not a century or 30 years or 10 years, but, rather, the time until the next election. As I write this, the yield curve, with the 2 year to 10 year spread at 284 basis points and the 2 year to 30 year spread at 396 basis points, is at near historic steepness. So it will cost the Treasury 3%, 4%, or more to lock in low rates. While this will save billions upon billions of dollars over the life of the bonds, it will cost the treasury billions, albeit far fewer billions, over the typical politician’s preferred time frame; i.e., the few years to the next election. With political pressure on the politicians to save money, why should they risk the wrath of the voters, and their reelection prospects, for something so ephemeral to them as the good of the taxpayers, the public purse, and the Republic? Does anyone think these poltroons went into public life to serve anyone other than themselves?
No wonder the idea was shot down by the Bush/Obama Treasury.
Today’s Wall Street Journal (Thursday, 2/3/11, page C1) reports that a panel of Wall Street experts is urging the Treasury to take advantage of current low interest rates by issuing plenty of long term debt and even to consider extending the 30 year limit on maturities of new treasury debt, perhaps extending maturities to 100 years.
This idea makes all the financial sense in the world. Why not save the taxpayers money by locking in today’s low rates for a century? But it won’t happen. Why? Because the typical politicians’ time frame is not a century or 30 years or 10 years, but, rather, the time until the next election. As I write this, the yield curve, with the 2 year to 10 year spread at 284 basis points and the 2 year to 30 year spread at 396 basis points, is at near historic steepness. So it will cost the Treasury 3%, 4%, or more to lock in low rates. While this will save billions upon billions of dollars over the life of the bonds, it will cost the treasury billions, albeit far fewer billions, over the typical politician’s preferred time frame; i.e., the few years to the next election. With political pressure on the politicians to save money, why should they risk the wrath of the voters, and their reelection prospects, for something so ephemeral to them as the good of the taxpayers, the public purse, and the Republic? Does anyone think these poltroons went into public life to serve anyone other than themselves?
No wonder the idea was shot down by the Bush/Obama Treasury.
MAYBE THEY’LL BE TOO BUSY KEEPING UP WITH “DANCING WITH THE STARS” TO NOTICE
2/3/11
European leaders are meeting in Brussels on Friday to consider further approaches to the fiscal and financial contagion that is spreading on the geographic and economic fringes of the eurozone. One of the approaches they will consider has been bandied about for the last few weeks or so: having the European Financial Stability Facility (“EFSF”) lend money to Greece so the Greeks can buy back their government bonds at, as the Wall Street Journal calls it (page A8, Thursday, 2/3/11), “current, depressed prices.”
Okay, maybe I, the EFSF luminaries, or Wall Street Journal reporters were absent for at least a few classes in Econ 101, but I have to ask a question: If it is announced that the EFSF is lending money to Greece to buy its bonds at “current, depressed prices,” how long with those prices remain “depressed”? Won’t potential sellers, knowing that the EFSF is insistent on throwing good money after bad, hold out for higher prices, perhaps even par?
Perhaps a more political, rather than economic, question: Just how will the typical German taxpayer feel about this latest episode of making speculators in Greek debt whole, or better, at the expense of the frugal German?
Just asking.
European leaders are meeting in Brussels on Friday to consider further approaches to the fiscal and financial contagion that is spreading on the geographic and economic fringes of the eurozone. One of the approaches they will consider has been bandied about for the last few weeks or so: having the European Financial Stability Facility (“EFSF”) lend money to Greece so the Greeks can buy back their government bonds at, as the Wall Street Journal calls it (page A8, Thursday, 2/3/11), “current, depressed prices.”
Okay, maybe I, the EFSF luminaries, or Wall Street Journal reporters were absent for at least a few classes in Econ 101, but I have to ask a question: If it is announced that the EFSF is lending money to Greece to buy its bonds at “current, depressed prices,” how long with those prices remain “depressed”? Won’t potential sellers, knowing that the EFSF is insistent on throwing good money after bad, hold out for higher prices, perhaps even par?
Perhaps a more political, rather than economic, question: Just how will the typical German taxpayer feel about this latest episode of making speculators in Greek debt whole, or better, at the expense of the frugal German?
Just asking.
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