Saturday, November 7, 2009

“I WISH YOU COULD HAVE COME UP WITH A BETTER STORY; I FELT DISTINCTLY LIKE AN IDIOT REPEATING IT.”

11/7/09

There are plenty of decent arguments against the House health insurance bill, which most of the media, and the country, continues to mistakenly call a “health care” bill (See my numerous posts on this subject over the last few months.), but the GOP persists in making a decidedly asinine argument against the measure. In fact, this argument is so inane that it makes the House bill look far better than it probably is by exposing its main opponents for the frauds that they are.

House Minority Leader John Boehner, never one to make an intelligent argument when advancing an idiotic argument is easier, repeated this risible contention yesterday when he said:

“American do not want a trillion dollar government takeover of health care that increases costs and lets Washington bureaucrats make decisions that should be made by doctors and patients.” (Emphasis mine)

Mr. Boehner’s specious argument provides yet more evidence, as if more evidence were needed, of the complete separation from reality that characterizes the political class, regardless of Party. Just what planet does Mr. Boehner inhabit? Where are medical decisions made by doctors and patients? Medical decisions are currently made by insurance companies. Under the “health care” schemes being hatched by the Democrats, such decisions will either continue to be made either by health insurance companies, who, as it turns out, will (Surprise!) be the chief beneficiaries of both the House and Senate bills, or by government health bureaucrats. But the doctor and the patient? They will remain as they are now…nearly completely out of the decision making loop…regardless of what happens with the “health care” bill.

One would think that the Republicans would be able to make a more compelling argument against the proposed “health care” legislation. That they can’t tells us a great deal about either the mental firepower these patheticos wield or the underlying strength of the House “health care” legislation. I suspect the former.

Thursday, November 5, 2009

“IF YOU CAN FIND A BETTER CAR (OR A REALLY CHEAP CHRYSLER), BUY IT!”

11/5/09

Chrysler told analysts and dealers yesterday that it is on the way back, vowing to return to profitability by 2011 and to repay its debt to the U.S. government by 2014. Chrysler broke even in September and has been cash flow positive in the last few months. The latter is good news, but not much of a feat with cash for clunkers providing a taxpayer financed shot in the arm and with most of Chrysler’s debt having been eliminated, courtesy of the long suffering, but still magnanimous, taxpayers. The former is a fantasy.

Why am I so pessimistic (besides my general nature) about Chrysler’s future? As I’ve said before (See, most saliently, my 5/1/09 post “CAN THEY MAKE IT? CAN THEY MAKE IT?”), it boils down to product, which the analysts don’t understand at all, mostly because few would be caught dead in a domestically branded car, and which one would think the dealers would understand if one were not as familiar as is yours truly with how dealers do business. With my usual caveat that there is no really bad product out there, and if one can get a really good deal on a Chrysler, and one seeks only transportation from one’s automobile, one should buy a Chrysler, it is clear that, in relative terms, Chrysler’s product line is pathetic and there is nothing in the pipeline, with the possible exception of the new Grand Cherokee, to change that any time in the near future.

In order to meet its goal of returning to profitability in 2011 and getting off the dole by 2014, Chrysler yesterday told its audience that it would:

--boost sales of its Ram trucks by 50% over the next five years.
--increase global Jeep sales by 60% over the next five years.
--double U.S. sales of Chrysler branded products over the next five years.
--power half of Chrysler’s products with engines based on Fiat technology by 2014.

Hmm…

Even if we assume that the economy and car sales will return to the halcyon days of 2005-2007 by 2014, one has the following questions:

--What is it about the Ram that will cause its sales to increase 50% by 2014? The Ram is one of the few competitive products that Chrysler produces, but its sales still come in third in a field of three. Pickup driver are a loyal bunch; getting such a customer into a rival’s product, even when that product is clearly superior, is difficult. Getting an F-150 or a Silverado driver into a merely competitive Ram is well nigh impossible.

--How are Jeep sales going to increase by 60% over five years? As I’ve said before, only Wall Street thinks Jeep is a great brand, probably because Jeep is one of the few domestic products a Wall Street, or even a buy side, analyst would consider, probably because Jeeps make them feel extra manly, but I digress. Jeep’s momentary day in the sun was eclipsed when other manufacturers jumped on the SUV wagon about fifteen years ago. Now that the world has moved to crossovers, Jeep gives us the Compass and the Patriot and, some might argue, the new Grand Cherokee. Oh boy.

--Double U.S. sales of the Chrysler brand in five years? How? Chrysler has nothing, except for its minivans, and even those, while selling well, are widely acknowledged to trail both their Honda and Toyota competitors in any measure, other than post heavily incentivized price. Chrysler cars are a relative joke and there is nothing on the reasonable horizon to change that. Does the “analytical community” think the Fiat 500, about the size of a Mini-Cooper, will make a significant dent in the U.S. market? Does anyone not on the Chrysler payroll think the rest of the proposed Fiat based products, which fit awkwardly into standard U.S. size classifications and represent no discernible breakthroughs, will suddenly become smash hits in the U.S.? If those products don’t result in at least a few tectonic shifts in the U.S. car market, there is no basis for even fantasizing about Chrysler’s doubling sales in five years.

--Why does the idea of having Fiat designed engines’ powering half of Chrysler products by 2014 get the juices flowing so salubriously? There will be some savings involved, and that is a good thing. But beyond that, why the excitement? If there is such pent-up demand for Fiat products and technology in this country, if there are indeed legions of Americans out there saying, or even thinking, “Boy, I’d really like a Fiat, but I guess I’ll just have to settle for a Toyota,” why has Fiat been out of this country for over fifteen years? Why has it waited for Chrysler to offer itself for nothing in order to attempt to repenetrate this market?

I’ve said it before and I’ll say it again: Unless the government has decided that it will do whatever is necessary to keep Chrysler alive, Chrysler is doomed because its products simply are not competitive, and companies, especially car companies, are a collection of products, not numbers on financial statements. Fiat is by no means the joke it was ten years ago; it has made remarkable progress under the very coolly named (even in an industry characterized by executives with very cool names) Sergio Marchionne. But Fiat is not Toyota, Honda, VW, or even Daimler, which could not turn around Chrysler. Americans are not crying out for Fiats or Alfa Romeos. And they certainly aren’t buying Chryslers.

Wednesday, November 4, 2009

THE CHAIRMAN, A NOVEL OF BIG CITY POLITICS IS NOW AVAILABLE AT SEVERAL INDEPENDENT BOOK STORES

11/4/09

I’m delighted to let you know that my book The Chairman, A Novel of Big City Politics is now available at the following independent bookstores:

--Anderson’s Book Shop in Naperville, where we have a signing scheduled for Saturday, 11/21 at 11:00 AM

--57th Street Books in Hyde Park, at the corner of 57th and Kimbark

--Town House Books in St. Charles.

I am trying to get the book into more independent book stores; if you know of such a store that I should approach about carrying the book, please let me know.

The Chairman, of course, remains available at Amazon.com, at BookSurge.com, and by calling BookSurge at 866 308 6235, Option 6 or at 843 789 5000, option 6.

Several of you have read the book and sent me your comments and/or written reviews of the book on Amazon; thanks! I can’t tell you how much I appreciate that.

Mark
Mightydad@att.net

“PEOPLE IN THESE PARTS GET THE TIME OF DAY FROM THE ATCHISON TOPEKA AND THE SANTA FE…”

11/4/09

The big business news story of yesterday was Warren Buffett’s Berkshire Hathaway’s purchase for $100 in either cash or Berkshire stock of the 77% of Burlington Northern it didn’t already own.

Mr. Buffett, displaying his usual, and lately grossly misplaced, optimism, called the purchase “…an all-in wager on the economic future of the United States. I love these bets,” quickly adding that the deal was “not a bet on next month or next year.”

The press and the analytical community quickly busied itself with trying to discern the Oracle of Omaha’s possible additional, or at least more specific, motivations for buying BN at a 31% premium to the stock’s price before the announcement and/or with opining on the merits of the purchase. Being interested in the thought processes of truly consistently sage investors, a class that Mr. Buffett, though not infallible, seems to define, I have joined in this game of speculation.

Clearly, the BN purchase was a big “green” bet by Mr. Buffett, a motivation generally acknowledged by all concerned. Moving freight by rail is far more efficient than moving freight by truck. As fuel gets more expensive and concern for hydrocarbon emissions increases, both of which still appear to be secular trends, rail will become and increasingly sensible and fashionable way to move freight.

BN is also attractive to Mr. Buffett because it is one of the industries not subject to foreign competition and outsourcing. It is also heavily regulated and provides steady, though not spectacular, returns.

Unlike talk radio hosts who somehow caught lightning in a bottle and assume that such bits of luck make them qualified to opine on subjects about which they know less than nothing, I don’t second guess the financial and investment prowess of Warren Buffett. He remains the foremost investor in the world. However, while I don’t question what Mr. Buffett does, I do question what Mr. Buffett tells us about what he does. Like any good investor, Mr. Buffett knows not to tell his inquisitors too much about his motivations or his plans.

Think for a moment what railroads do. They move commodities, such as coal and wheat. They also move bulky manufactured goods, including cars, electronic products, and any number of other consumer and capital goods. Increasingly, the direction of these movements has been commodities toward ports for export and manufactured goods away from ports toward final purchase points inside the U.S. Indeed, the railroads have enjoyed something of a resurgence over the last few years, and not only because of their ability to move freight relatively efficiently; much of their resurgence has arisen as the aforementioned directions of the freight it moves have become a more permanent feature of world trade patterns…commodities out of the U.S., manufactured goods into the U.S.

So, yes, Mr. Buffett’s purchase of BN is “…an all-in wager on the economic future of the United States.” But I would like to add a few words to that anodyne aphorism. Given the rail industry’s relative immunity to foreign competition, and, more importantly, its role in exporting commodities and importing manufactured goods, a bet on rail is, even though Mr. Buffett would never say this, an all-in wager on the economic future of the United States as a Third World country. As with most of Mr. Buffett’s bets, I’d say this was a pretty good one.

Tuesday, November 3, 2009

ANOTHER GREAT WRITER EMERGES FROM THE SOUTH SIDE

11/3/09


Today I read perhaps the greatest letter to the editor in the history of such missives and found it imperative to share the letter, and my feelings thereon, with both the readers of both the Chicago Sun-Times and the Insightful Pontificator:


11/3/09

In today’s Sun-Times, I read what is possibly concurrently both the funniest and the saddest, and perhaps the greatest, letter in the history of letters to the editor in any paper, the following letter from Kevin Duffin, who resides in my old neighborhood, Morgan Park:

“I agree wholeheartedly with Alderman Carrie Austin—aldermen should not be subjected to a search when they enter the city’s central headquarters for administrative hearings. They should be subjected to a search when they leave.”

I don’t know what Mr. Duffin does for a living, but the stand-up stage, or the world of punditry, is calling.

Congratulations, Mr. Duffin!


Mark Quinn
Naperville

THE CAR GUY ALSO RISES

11/3/09

As I watched CNBC this morning, an ad appeared for the new Caddy SRX, which, from what I’ve read, is either a terrific vehicle or a major disappointment. I haven’t driven this one yet, so I have no opinion of my own on this vehicle, but this uncharacteristic lack of an opinion has no bearing on this post. The ad, typical of most Caddy ads since the “Welcome to the world of gentlemen, gentlemen” ad of several years ago, was quite inane. (Clearly, the quality of Cadillac ads has clearly not kept pace with the continuing improvement in the Cadillac product, but I digress.) One particular annoyance in this ad caught my attention: The camera zooms in on the young driver’s right hand as she pretends to shift her automatic transmission. Okay, maybe it was one of those vestigial manumatics that she was pretending to shift, but it wasn’t a manual; the SRX is unavailable with a manual. This “let’s pretend we’re really driving” approach is by no means unique to Caddy advertising; I distinctly remember a Buick ad of a few years ago when a similar young driver pretended to shift her automatic equipped LaCrosse. If you watch enough car ads, you’ll notice legions of steerers pretending to be drivers.

So as an aficionado of real manual transmissions, and as an observer of human nature, I have one question:

How many drivers of manual transmissions pretend they have automatic transmissions?

Sunday, November 1, 2009

“THERE HE GOES AGAIN…”

11/1/09

A story in today’s (i.e., Sunday, 11/1’s) Chicago Tribune reports that Carol Adams, a former Secretary of the Illinois Department of Human Services, has decided to decline a job offer from Governor, Pat “I know you’re a man of honor and a different kind of public servant” Quinn. Ms. Adams was offered a newly created $110,000 per year post as “Illinois representative to Africa.” After the fiscally prudent governor’s decision to create this new position out of whole cloth, doubtless due to the brobdingnagian surplus of cash causing the state’s coffers to burst, drew criticism, Ms. Adams decided that “pressing family medical issues,” which doubtless came up only after Quinn’s decision was ripped for once again laying bare the showboating and pandering that characterizes the man who made it, “made my relocation to South Africa prohibitive,” despite Ms. Brown’s contention that “The opportunity to work in Africa has been a career long desire of mine.” Isn’t it fortuitous that politicians’ “family and medical issues” always seem to coincide with times in which political pressure seems to intensify?

One could not be accused of being overly cynical if one were to conclude that Ms. Adams’ decision to give up her “career long desire” was not entirely voluntary. Mr. Quinn (no relation, by the way) simply cannot withstand the fully justifiable criticism that came in the wake of his creating this position. Some of the criticism arose because Ms. Adams is perceived by some as being in the Blagojevich camp. This may not be fair; while Ms. Adams was appointed to her DHS job by Governor Blagojevich, this does not necessarily make her one of Blago’s people. But even if she is complete Blago lackey, and I suspect she’s not, the more justifiable criticism should arise from Governor Quinn’s cavalier attitude toward the state budget. He tells us we are in a time of deep fiscal distress, caused by the recession and, to a greater extent, by a combination of years of fiscal mismanagement by financial dunces and/or a willingness of people who ought to know better to put short term political expediency ahead of fiscal prudence. He tells us that the people who make Illinois work have to sacrifice by paying higher taxes so the people who make their livings sucking the public teat can continue business as usual. The governor tells us that we can’t possibly have wholesale layoffs in the sacrosanct public sector despite such layoffs, and worse, taking place in the private sector, no sir. In times of distress, we have to continue “vital services,” as defined by the people who dispense, not the people who provide, the funds for those services.

Mr. Quinn’s insouciant attitude toward the working people of the state, the people about whom he claims to be so concerned, is illustrated by his creation of something called a “public health advocate” (See my already seminal 10/28/09 post, “OH, SO YOU’RE IN FAVOR OF JUVENILE DIABETES, EH?”) and now something called an “Illinois representative to Africa” when we have less than no money in the state’s coffers and we have to demand (not “ask,” as the politicians like to say. There is nothing voluntary about the taxing power of the state.) that the “working people” cough up more money so the pols can send their friends off to exotic locales to collect high salaries and fend off the (Horrors!) dreaded day when such luminaries might have to get real jobs.

Some might argue that trade missions, such as the proposed Africa post, are especially necessary in these times of economic distress. We need such outposts, we are told, to bring business to Illinois. Think about it, though; in a time of worldwide economic distress, which is hitting the developing world at least as hard as the developed world, just how much business are we going to get out of Africa, or any place, for that matter? And how can a government office help in such an effort? You guessed it…by handing out tax breaks or subsidies of one kind or another to attract what the pols and hangers-on, with their vast experience in financial matters, decide is “business.” So the governor proposes, in a time of fiscal deprivation, to spend money to create a post to hand out more of the money we don’t have.

But it gets better. Governor Quinn, a man of vast foresight that transcends the tawdry world of business and finance, envisions the South African outpost as transcending the role of a traditional trade outpost to focus on building relationships with universities and the South African academic community. Establishing relationships with universities and the academic community? That’s a burning priority in a time of fiscal dystopia if I ever saw one!

The question that arises from Governor Quinn’s oh so typical of political types latest plan to spend money we don’t have transcends our poltroonish governor to encompass just about every politician who currently represents us: Just what planet do these popinjays inhabit? I used to think that term limits would be a solution to our problems, and I still do. But we need more. After all, term limits would not save us from the likes of Pat Quinn, who has never held a particular public office long enough to have any kind of proposed term limit kick in; the Pat Quinns of the world, with the full acquiescence of the brain-dead voters, just leap from sinecure to sinecure. What we need is a requirement that, before an individual can hold public office, s/he has to have held some kind of non-political job. I don’t necessarily mean a private sector job, though that, of course, would be nice. How about a public sector job in which one does actual work, like the legions of honest, hardworking government workers who have actual responsibilities, whose jobs don’t consist of bloviating in front of TV cameras as part of an endless campaign to hornswoggle voters who are too consumed with situation comedies and late night talk shows to pay attention to their responsibilities as citizens?

How about some politicians with some kind of experience in the real world of work, be it in the public or private sector, rather than a career that never transcends the narcissistic world of the public officeholder?