1/31/09
One of the most heated topics floating around Wall Street and Washington of late is the issue of compensation in the financial business.
While Senator Claire McCaskill (D., MO) has been saying some perfectly sensible things about “massive self indulgences” (sic; if I am wrong about my “said in context,” and Senator McCaskill did mean to say indulgences, perhaps she share my Catholic religion and meant to say “indulgences” and was talking about something having nothing to do with Wall Street. However, I get the sense that she meant to say “indulgence,” in the singular. But I digress.) and “a bunch of idiots on Wall Street,” she has hatched a perfectly ludicrous plan that proposes to limit Wall Street compensation to $400,000, the salary of the President of the United States. As ludicrous as this piece of central planning might be, however, Senator McCaskill makes a point when she argues that, once these Wall Street Wonderboys started taking Uncle Sam’s money, they left themselves subject to whatever dictates emanated from the sachems who occupy the den of iniquity on the Potomac. (See one of today’s other posts, “GEORGE BAILEY, CALL YOUR OFFICE.”)
Senator McCaskill’s proposal is, of course, not the only example floating in the ether above Washington of drumbeating for limitations on executive. Most of these proposals, like Senator McCaskill’s, are idiotic but entirely justified because, as the old adage says, once you take the man’s money, you do what the man says. And all these guys have taken the man’s money; though there was some duress involved in “persuading” the then apparently healthy banks to take the money (See my 10/14/08 post.), any of these estimable, highly paid, and supposedly big, tough CEOs could have said no. Instead, they went shuffling off, bowing and scraping to their new federal masters.
As moronic as these pay limit proposals are, some of the defenses of the compensation customs on Wall Street are equally imbecilic. As one might expect, the most gormless of these defenses comes from the Wall Street Journal, which still laughingly insists on fancying itself the voice of the free market.
The Journal points out in one of its 1/31/09 editorials that
“That ‘irresponsible' bonus pool of $18 billion was for every worker in the New York financial industry, from top dogs to secretaries. The average bonus (in 2008) was $112,000; bonuses typically make up most of an employee’s salary (sic) on Wall Street.”
First of all, $112,000 is, for most people, even for most people who read the Wall Street Journal, a lot of money. But even aside from this flight from reality, this whopper was alarmingly disingenuous even for the Journal, the most salient feature of which of late has been its disingenuousness. Reading this, the Journal would have us believe that the typical Wall Street trader, salesperson, or investment banker makes a relatively modest, or at least not outrageous salary (less than $112,000) and then gets a bonus of around $112,000 for a total compensation package of around $200,000. Nice money (way too much for the job most of these bozos has done of late), but not eye-popping. But just how naïve does the Journal think people are? The Journal defeats its own argument when it says that the $112,000 average includes everyone, including secretaries. How big a bonus do you suppose the typical secretary or mail room worker will get this year? Probably pretty close to bupkus. Yes, the average is $112,000, but the big guys, the guys who are in a position to really screw things up (and who did so with a special gusto over these last few years) are getting a LOT more than $112,000. Yes, bonuses “make up most of an employee’s salary (sic) on Wall Street.” But for the professionals, the guys who have crippled, if not destroyed, our financial system, that salary isn’t $112,000 (or anything like it) and, yes, the bonus remains the largest part of their compensation, i.e., a large multiple of a salary of which most Americans, even most college educated Americans, can only dream.
People who read this may protest “Don’t you believe in the free market?” Yes, I do, far more than almost all of Wall Street. That is why this pay for failure so appalls me so. Let’s do some simple arithmetic. From 2002 to 2008, Wall Street securities firms paid about $190 billion in bonuses, which spread over six years averages $31.7 billion per year. Spread over seven years (The 2002 to 2008 time frame could be so interpreted if one includes each of the “end” years.), that would average $27.1 billion. During that time frame, those companies showed (post bonus) profits of $76 billion, or either $12.7 billion or $10.9 billion per year. (Some, especially some shareholders, might argue quite legitimately, that these bonuses were outrageous, but let’s leave that argument for another time.) In 2008, these firms paid out bonuses of $26 billion, not substantially below the average for the “good” years, but the firms collectively lost, post bonus, $25.3 billion. One does not have to be a shareholder to argue that these payouts were ridiculous. In a free market economy, one does not pay for failure, and one assumes that payouts should bear some relationship to the profitability of one’s employer. But, as I have said ad nauseam in the past, we are no longer in a free market economy. We are in a fixed, “not what you know but who you know,” “once you are in the club you are set for life even if you are a witless, irresponsible dolt” economy, an abomination before God and man concocted by the interplay of big government, big business, and Wall Street, an abomination that will be a substantial contributor to the rapid and incipient downfall of our once great nation (just in case you wondered how I really feel).
Others may argue that if Wall Street firms don’t pay (still) gargantuan bonuses, their top talent will flee to more profitable employment. In the first place, it would be a blessing for these firms, or at least for their shareholders, if such “talent” went far, far away. But even I will concede that there remain some bright, talented, hardworking, responsible people on Wall Street, and it would be in their employers’, Wall Street’s, and the nation’s, interest to keep such people toiling away solving the problems their esurient and excerebrose colleagues have created. But the opportunities awaiting those who walk out the door are limited in this environment; Wall Street, and its counterparts overseas, is not lining up to hire people. The opportunities available for those who think they are underpaid simply are not all that abundant. Most sensible people will realize that they are best off remaining where they are, even if doing so entails some financial (hah!) “sacrifice.” If they think otherwise, perhaps they aren’t so smart, or at least not so prudent (I know this from personal experience, but that is a long and distant story best left for another time, or never.), and what we need now, above all, is prudence.
Yes, the proposals coming from Washington to limit pay are ridiculous. But Wall Street brought such potential diktats on itself both by taking federal money and from paying itself according to Alice in Wonderland logic for years.
You made your bed, guys, now enjoy sleeping in it. We can only hope there were some excess nails involved in its construction.
Saturday, January 31, 2009
GEORGE BAILEY, CALL YOUR OFFICE
1/31/09
The Wall Street Journal reports today that many banks, leery of the restrictions about which the big banks who took the government’s money are now whining, have said “No, thank you” to TARP money.
These refusenik banks are, for the most part, not surprisingly, not located in the financial canyons of New York or Chicago. Instead, the include such banks as United Bankshares, Inc., of Charleston, West Virginia, American River Bankshares of Sacramento, California, and Rurban Financial Corp. in Defiance Ohio. Apparently the people who run these banks realize that when one takes the man’s money, one does what the man says and wanted no part of the man, even if the man is Senator Claire McCaskill. (See one of today’s other posts, “SHE ASKS ME WHAT I MAKE…”)
This characteristic bout of good sense and prudence emanating from America’s smaller financial institutions provides further evidence for my long held contention that, if we are ever to emerge from this financial morass, it will be the good sense of the small business person, not the bloviations of the blowhards in New York and Washington, that will lead us to safety.
It would be nice if Mr. Obama or the pooh-bahs on Wall Street would consider hiring some of the people who run such institutions to help solve some of these problems, or at least listening to what they have to say. Such a development, however, is probably impossible. People who run small banks, for the most part, want no part of the hypocrisy, group think, supercilious vanity, and utter insanity that characterizes our nation’s political and economic power centers.
The Wall Street Journal reports today that many banks, leery of the restrictions about which the big banks who took the government’s money are now whining, have said “No, thank you” to TARP money.
These refusenik banks are, for the most part, not surprisingly, not located in the financial canyons of New York or Chicago. Instead, the include such banks as United Bankshares, Inc., of Charleston, West Virginia, American River Bankshares of Sacramento, California, and Rurban Financial Corp. in Defiance Ohio. Apparently the people who run these banks realize that when one takes the man’s money, one does what the man says and wanted no part of the man, even if the man is Senator Claire McCaskill. (See one of today’s other posts, “SHE ASKS ME WHAT I MAKE…”)
This characteristic bout of good sense and prudence emanating from America’s smaller financial institutions provides further evidence for my long held contention that, if we are ever to emerge from this financial morass, it will be the good sense of the small business person, not the bloviations of the blowhards in New York and Washington, that will lead us to safety.
It would be nice if Mr. Obama or the pooh-bahs on Wall Street would consider hiring some of the people who run such institutions to help solve some of these problems, or at least listening to what they have to say. Such a development, however, is probably impossible. People who run small banks, for the most part, want no part of the hypocrisy, group think, supercilious vanity, and utter insanity that characterizes our nation’s political and economic power centers.
“BUT I GOT A DRIVER AND THAT’S A START…”
1/31/09
So former Senator Tom Daschle has joined many of his colleagues, including our esteemed new Treasury Secretary, in having been caught with his hand in the tax cookie jar. It seems that former Senator Daschle, which our hell-bent on bringing change to Washington President has chosen to head the Department of Health and Human Services, paid about $140,000 in back taxes and interest for income that he failed to report when it was earned but was discovered in the process of vetting him for the HHS post. The back taxes were on in-kind income, the luxury car provided him by his new employer, an investment firm that doubtless hired Mr. Daschle for his ability to structure various financial derivatives, not for his ability to have people in Washington return his phone calls, no sir. But I digress.
Mr. Daschle’s tax problems are appalling enough. But what is especially galling, and elucidatory, is Mr. Daschle’s explanation for his “oversight.” He told Senate Finance Committee staff that he had grown used to having a car and a driver as Senate Majority Leader and thus didn’t even think to report the car on his tax return. (Incidentally, we are talking about the period from 2005 to 2007. $140,000 in taxes on a car used for two years? Wow! Must have been a Maybach, a Rolls, or twenty Hyundais. Some of my readers will get that joke, but, in any case, I digress.)
So Mr. Daschle’s experience in Washington had left him so isolated from reality that he didn’t even think he had to report some (approximately) $400,000 in income? He was so used to having his hindquarters smooched on the Hill that he couldn’t relate to the reality of life outside Washington, even a reality that involved being given use of a (n apparently very nice) luxury car as part of his compensation?
Was there ever a better argument for term limits?
So former Senator Tom Daschle has joined many of his colleagues, including our esteemed new Treasury Secretary, in having been caught with his hand in the tax cookie jar. It seems that former Senator Daschle, which our hell-bent on bringing change to Washington President has chosen to head the Department of Health and Human Services, paid about $140,000 in back taxes and interest for income that he failed to report when it was earned but was discovered in the process of vetting him for the HHS post. The back taxes were on in-kind income, the luxury car provided him by his new employer, an investment firm that doubtless hired Mr. Daschle for his ability to structure various financial derivatives, not for his ability to have people in Washington return his phone calls, no sir. But I digress.
Mr. Daschle’s tax problems are appalling enough. But what is especially galling, and elucidatory, is Mr. Daschle’s explanation for his “oversight.” He told Senate Finance Committee staff that he had grown used to having a car and a driver as Senate Majority Leader and thus didn’t even think to report the car on his tax return. (Incidentally, we are talking about the period from 2005 to 2007. $140,000 in taxes on a car used for two years? Wow! Must have been a Maybach, a Rolls, or twenty Hyundais. Some of my readers will get that joke, but, in any case, I digress.)
So Mr. Daschle’s experience in Washington had left him so isolated from reality that he didn’t even think he had to report some (approximately) $400,000 in income? He was so used to having his hindquarters smooched on the Hill that he couldn’t relate to the reality of life outside Washington, even a reality that involved being given use of a (n apparently very nice) luxury car as part of his compensation?
Was there ever a better argument for term limits?
Wednesday, January 28, 2009
“IF YOU’RE INTERESTED IN A CAREER IN POLITICS, AND LOTS OF CASH…”
1/28/09
I sent the following letter to the Chicago Sun-Times in response to a column by Carol Marin, one of our town’s more accomplished political writers:
1/28/09
In her 1/28/09 Commentary piece on the Blagojevich imbroglio, Carol Marin approvingly quotes freshman Democratic Representative Bill Burns of Chicago:
“What drove the impeachment of this governor was the need for campaign cash. Same for George Ryan in the licenses-for-bribes probe, money for his campaign fund.”
Ms. Marin goes on to conclude
“Nothing changes until the (campaign finance) system changes.”
There is a large element of truth in Ms. Marin’s contention, but she omits a substantial point. While it was the quest for campaign money that led to the downfall of Governors Ryan and Blagojevich, that money was not being raised exclusively to fund their campaigns. A truly corrupt politician, or even a mildly corrupt, garden variety Chicago/Illinois politician, has long found ways to funnel “campaign” money into his pocket. Until recently, doing so in Illinois was both simple and legal; all a pol had to do was to report any campaign money converted into personal funds on his or her income tax return. Even after the law was changed and such conversions were made illegal, and doubtless even while that law was in effect, our scrofulous pols channeled money to themselves through jobs or contracts for friends. Money funneled to such friends and supporters easily found its way into the politicians’ pockets through “gifts” or by employing more direct methods, such as channeling such contracts and jobs to the pols’ spouses.
It is not only the need for campaign funds that drives corrupt politicians. Campaign funds, in addition to legitimately funding campaigns, often serve as conduits for channeling money to politicians without having to pay outright bribes. Even if, as Cindy Canary of the Illinois Campaign for Reform prescribes, caps are put on the amounts of campaign money that pols can raise, or even if more drastic campaign reform measures are adopted, pols will simply find other, and perhaps even cruder ways, to put sell their offices for personal gain. Campaign reform will only affect the methodology employed by nefarious pols to line their pockets.
I sent the following letter to the Chicago Sun-Times in response to a column by Carol Marin, one of our town’s more accomplished political writers:
1/28/09
In her 1/28/09 Commentary piece on the Blagojevich imbroglio, Carol Marin approvingly quotes freshman Democratic Representative Bill Burns of Chicago:
“What drove the impeachment of this governor was the need for campaign cash. Same for George Ryan in the licenses-for-bribes probe, money for his campaign fund.”
Ms. Marin goes on to conclude
“Nothing changes until the (campaign finance) system changes.”
There is a large element of truth in Ms. Marin’s contention, but she omits a substantial point. While it was the quest for campaign money that led to the downfall of Governors Ryan and Blagojevich, that money was not being raised exclusively to fund their campaigns. A truly corrupt politician, or even a mildly corrupt, garden variety Chicago/Illinois politician, has long found ways to funnel “campaign” money into his pocket. Until recently, doing so in Illinois was both simple and legal; all a pol had to do was to report any campaign money converted into personal funds on his or her income tax return. Even after the law was changed and such conversions were made illegal, and doubtless even while that law was in effect, our scrofulous pols channeled money to themselves through jobs or contracts for friends. Money funneled to such friends and supporters easily found its way into the politicians’ pockets through “gifts” or by employing more direct methods, such as channeling such contracts and jobs to the pols’ spouses.
It is not only the need for campaign funds that drives corrupt politicians. Campaign funds, in addition to legitimately funding campaigns, often serve as conduits for channeling money to politicians without having to pay outright bribes. Even if, as Cindy Canary of the Illinois Campaign for Reform prescribes, caps are put on the amounts of campaign money that pols can raise, or even if more drastic campaign reform measures are adopted, pols will simply find other, and perhaps even cruder ways, to put sell their offices for personal gain. Campaign reform will only affect the methodology employed by nefarious pols to line their pockets.
Tuesday, January 27, 2009
“YOU CAN GET ANYTHING THAT YOU WANT AT ALICE’S RESTAURANT”
1/27/09
This morning, the hosts of a WGN-AM 720 talk show chose as a topic an article in today’s Wall Street Journal concerning waiters’ and waitresses’ now being required, at certain restaurants, to bus their own tables as store managers seek to cut costs. The program, generally one of the lightest of WGN’s typically light fare, featured an assortment of waiters and waitresses calling expressing their opinions concerning this latest development and relating some of their experiences. Light and anecdotal, but nonetheless entertaining and informative.
One of the callers was a waitress at what she described as an upscale Oak Brook restaurant (For those of you who don’t know the Chicago area, Oak Brook is a VERY upscale suburb.), and she spent most of her time comparing and contrasting her experience there with her prior experience at the Maggiano’s Little Italy location in Oak Brook. As many of you know, Maggiano’s is a nice place (“good food, everyone minds his business”…okay, maybe not as nice as Bruno’s in the Bronx, but a nice place nonetheless), and isn’t cheap, but only the Quinns would consider it an upscale establishment. The waitress’s main point was not nearly as interesting to me as her response to one of the host’s questions regarding how she was doing, given the economic situation. She responded that she hasn’t felt much of the economic downturn because Oak Brook, being a wealthy community, hadn’t felt much of the recession and because much of her business was corporate.
Two major observations are in order here. This woman’s job puts her in a good position to detect economic trends, a far better position than those of about 99.5% of people on Wall Street. If she is right, and Oak Brook has not slowed down, it means to me that we are in at least as bad an economic situation as I had thought. Why? Let’s use Oak Brook as a surrogate for any, or all, “wealthy” communities throughout the country. If indeed they haven’t been hit, it’s just a matter of time; they merely haven’t been hit YET. Why do I say that? There are two reasons. First, many, if not most, of the people who are considered “rich,” by themselves and by casual and not so casual observers, are not rich at all. Today, when we consider someone wealthy, usually because of appearances or self-delusion, we don’t mean that s/he is wealthy but, rather, that s/he has access to liability creation. That ability to create liabilities is gone or soon will be. Second, even those who are, or were, truly wealthy have been hit hard in their real estate and stock portfolios. Don’t believe the commonly held, yet ludicrous, proposition that the “wealthy” somehow know a great deal about investing money; witness the Madoff fiasco. His “victims” weren’t working stiffs. Not only have those who had some legitimate claim to being wealthy been hit in their portfolios but, in many cases, their jobs are in jeopardy. Don’t believe in the myth that those who are wealthy are necessarily smart, hard working, or immensely talented. Given the structure of our post-free market economy, many are none of those. They are simply well connected, lucky, or were audacious in an economic set of circumstances in which audacity was well rewarded. Their true economic value, under normal economic circumstances, is a tiny fraction of what they managed to accumulate under the Alice-in-Wonderland economy that we had experienced, until recently, for the last twenty years.
If Oak Brook and towns like it do remain largely unscathed, it is only a matter of time before they are, for lack of a better term, scathed. That shoe, then, is yet to drop.
My second major observation: If our waitress friend is wrong about the health of the economy of Oak Brook and it has indeed already slowed down, her mere perceptions say something. As I said above, given her position at the one of the fulcra of the economy, her perceptions are, if they are right (and not just in this case), far more valid than those of the average seven or eight figure Wall Streeter. If her perceptions are wrong, however, they are not nearly as valuable as the equally mistaken perceptions of the typical Wall Street culprit because she is not in as good a position to act upon those incorrect perceptions, largely due to her having to work like a slave for a merely decent (or, in better restaurants, slightly better than decent) livelihood while our Wall Street Wonder Kids make large multiples of what she makes for pretending to be important, telling each other how brilliant they are, and decimating venerable institutions of American finance with their latest bright, or outright criminal, trading and investment schemes. But I digress. However, even if she is wrong, and her perceptions do not have nearly as much value as they would if they were right, they are still valuable because they are not hers alone; they are doubtless reflective of other people’s perceptions and, given that she is at least as perceptive as most of the people on whom she waits, reflective of the opinions of at least some people with a degree of influence.
So if the economies of our “wealthy” enclaves are largely undamaged, it merely means that another shoe, and a big one, is about to drop. If, on the other hand, if such economies are, as I believe, hurting, enough people are laboring under the perception that “the ‘rich’ simply do not suffer in these things” to give the markets and, to a lesser extent, the economy, something of a prop. Neither bodes well for the economy or the equity markets and tells me that, if anything, I am being far too optimistic about the economy and the market. Loyal readers know that if I am being far too optimistic, we are in such a state of economic dyspepsia that even my occasionally skillful verbosity cannot begin to describe its wretched depths.
Perhaps a third observation, but a minor and rather obvious one: Much of one’s business being “corporate” should be, in this economy, grounds for trepidation rather than optimism or complacency.
The experts will scoff at these observations. Why, they are purely anecdotal and are based on the perceptions of a mere waitress. But these are the same experts who told us that the “housing problem” was a mere blip that would have a negligible impact on the economy, after they told us that the worst that could possibly happen in the housing market was that prices would stop going up; a decline in housing prices? Ha! The rantings of a misinformed fear monger! And a misinformed fear monger who values the opinions of mere waitresses and other such riff-raff.
This morning, the hosts of a WGN-AM 720 talk show chose as a topic an article in today’s Wall Street Journal concerning waiters’ and waitresses’ now being required, at certain restaurants, to bus their own tables as store managers seek to cut costs. The program, generally one of the lightest of WGN’s typically light fare, featured an assortment of waiters and waitresses calling expressing their opinions concerning this latest development and relating some of their experiences. Light and anecdotal, but nonetheless entertaining and informative.
One of the callers was a waitress at what she described as an upscale Oak Brook restaurant (For those of you who don’t know the Chicago area, Oak Brook is a VERY upscale suburb.), and she spent most of her time comparing and contrasting her experience there with her prior experience at the Maggiano’s Little Italy location in Oak Brook. As many of you know, Maggiano’s is a nice place (“good food, everyone minds his business”…okay, maybe not as nice as Bruno’s in the Bronx, but a nice place nonetheless), and isn’t cheap, but only the Quinns would consider it an upscale establishment. The waitress’s main point was not nearly as interesting to me as her response to one of the host’s questions regarding how she was doing, given the economic situation. She responded that she hasn’t felt much of the economic downturn because Oak Brook, being a wealthy community, hadn’t felt much of the recession and because much of her business was corporate.
Two major observations are in order here. This woman’s job puts her in a good position to detect economic trends, a far better position than those of about 99.5% of people on Wall Street. If she is right, and Oak Brook has not slowed down, it means to me that we are in at least as bad an economic situation as I had thought. Why? Let’s use Oak Brook as a surrogate for any, or all, “wealthy” communities throughout the country. If indeed they haven’t been hit, it’s just a matter of time; they merely haven’t been hit YET. Why do I say that? There are two reasons. First, many, if not most, of the people who are considered “rich,” by themselves and by casual and not so casual observers, are not rich at all. Today, when we consider someone wealthy, usually because of appearances or self-delusion, we don’t mean that s/he is wealthy but, rather, that s/he has access to liability creation. That ability to create liabilities is gone or soon will be. Second, even those who are, or were, truly wealthy have been hit hard in their real estate and stock portfolios. Don’t believe the commonly held, yet ludicrous, proposition that the “wealthy” somehow know a great deal about investing money; witness the Madoff fiasco. His “victims” weren’t working stiffs. Not only have those who had some legitimate claim to being wealthy been hit in their portfolios but, in many cases, their jobs are in jeopardy. Don’t believe in the myth that those who are wealthy are necessarily smart, hard working, or immensely talented. Given the structure of our post-free market economy, many are none of those. They are simply well connected, lucky, or were audacious in an economic set of circumstances in which audacity was well rewarded. Their true economic value, under normal economic circumstances, is a tiny fraction of what they managed to accumulate under the Alice-in-Wonderland economy that we had experienced, until recently, for the last twenty years.
If Oak Brook and towns like it do remain largely unscathed, it is only a matter of time before they are, for lack of a better term, scathed. That shoe, then, is yet to drop.
My second major observation: If our waitress friend is wrong about the health of the economy of Oak Brook and it has indeed already slowed down, her mere perceptions say something. As I said above, given her position at the one of the fulcra of the economy, her perceptions are, if they are right (and not just in this case), far more valid than those of the average seven or eight figure Wall Streeter. If her perceptions are wrong, however, they are not nearly as valuable as the equally mistaken perceptions of the typical Wall Street culprit because she is not in as good a position to act upon those incorrect perceptions, largely due to her having to work like a slave for a merely decent (or, in better restaurants, slightly better than decent) livelihood while our Wall Street Wonder Kids make large multiples of what she makes for pretending to be important, telling each other how brilliant they are, and decimating venerable institutions of American finance with their latest bright, or outright criminal, trading and investment schemes. But I digress. However, even if she is wrong, and her perceptions do not have nearly as much value as they would if they were right, they are still valuable because they are not hers alone; they are doubtless reflective of other people’s perceptions and, given that she is at least as perceptive as most of the people on whom she waits, reflective of the opinions of at least some people with a degree of influence.
So if the economies of our “wealthy” enclaves are largely undamaged, it merely means that another shoe, and a big one, is about to drop. If, on the other hand, if such economies are, as I believe, hurting, enough people are laboring under the perception that “the ‘rich’ simply do not suffer in these things” to give the markets and, to a lesser extent, the economy, something of a prop. Neither bodes well for the economy or the equity markets and tells me that, if anything, I am being far too optimistic about the economy and the market. Loyal readers know that if I am being far too optimistic, we are in such a state of economic dyspepsia that even my occasionally skillful verbosity cannot begin to describe its wretched depths.
Perhaps a third observation, but a minor and rather obvious one: Much of one’s business being “corporate” should be, in this economy, grounds for trepidation rather than optimism or complacency.
The experts will scoff at these observations. Why, they are purely anecdotal and are based on the perceptions of a mere waitress. But these are the same experts who told us that the “housing problem” was a mere blip that would have a negligible impact on the economy, after they told us that the worst that could possibly happen in the housing market was that prices would stop going up; a decline in housing prices? Ha! The rantings of a misinformed fear monger! And a misinformed fear monger who values the opinions of mere waitresses and other such riff-raff.
Monday, January 26, 2009
OOOHHH, ZSA ZSA!!!
1/26/09
Who says the Pontificator is not at the forefront of modern pop culture? I sent the following response to a great friend and former colleague who sent me news of Zsa Zsa Gabor’s being “victimized,” to the tune of $10mm, by Smiling Bernie Madoff:
1/26/09
Ooohhh, Zsa Zsa!!!
Several thoughts come to mind:
First, being famous for being famous, or serially marrying many rich men, must pay well. Can Paris Hilton be far behind on the list of those whose money Bernie made off with? Given her relative youth, and the head start with her chunk of the Hilton fortune (of which I am sure Zsa Zsa also has a piece), such as it is, has afforded her, she is in a good position to surpass even the 1936 Miss Hungary contestant and star of “Queen of Outer Space” in the marvels fame for the sake of fame, and not giving anything away, can do for one’s portfolio. Well, perhaps we have to scratch the latter in Ms. Hilton’s case.
Second, Zsa Zsa’s husband just noticed this last week when he “checked on the couple’s finances.” Either these two are a couple of witless dolts or they have so much money that they never even bothered to check on their mere $10mm investment with Madoff when the story broke. See my first comment again.
Third, if Merv Griffin were still alive, none of this would have happened to Zsa Zsa. He doubtless would have counseled the object of his constant adoration, and the woman whose career he sustained in its later years, to avoid the clutches of the wily and slimy Bernie Madoff. Either that or Merv would have been one of Madoff’s major investors.
Ooohhh, Zsa Zsa!!!
mightydad@wowway.com
Who says the Pontificator is not at the forefront of modern pop culture? I sent the following response to a great friend and former colleague who sent me news of Zsa Zsa Gabor’s being “victimized,” to the tune of $10mm, by Smiling Bernie Madoff:
1/26/09
Ooohhh, Zsa Zsa!!!
Several thoughts come to mind:
First, being famous for being famous, or serially marrying many rich men, must pay well. Can Paris Hilton be far behind on the list of those whose money Bernie made off with? Given her relative youth, and the head start with her chunk of the Hilton fortune (of which I am sure Zsa Zsa also has a piece), such as it is, has afforded her, she is in a good position to surpass even the 1936 Miss Hungary contestant and star of “Queen of Outer Space” in the marvels fame for the sake of fame, and not giving anything away, can do for one’s portfolio. Well, perhaps we have to scratch the latter in Ms. Hilton’s case.
Second, Zsa Zsa’s husband just noticed this last week when he “checked on the couple’s finances.” Either these two are a couple of witless dolts or they have so much money that they never even bothered to check on their mere $10mm investment with Madoff when the story broke. See my first comment again.
Third, if Merv Griffin were still alive, none of this would have happened to Zsa Zsa. He doubtless would have counseled the object of his constant adoration, and the woman whose career he sustained in its later years, to avoid the clutches of the wily and slimy Bernie Madoff. Either that or Merv would have been one of Madoff’s major investors.
Ooohhh, Zsa Zsa!!!
mightydad@wowway.com
Sunday, January 25, 2009
“DON’T MAKE NO WAVES, DON’T BACK NO LOSERS.”
1/25/09
One of the theories that is being bandied about by those who love Chicago politics, most notably by John Kass, is that the grand plan of the people who really matter in the politics of our nation’s greatest city is to get rid of Rod (“I thought of Mandela, Dr. King, and Gandhi”) Blagojevich (Blago has been very cooperative in this aspect of the plan.) and then pass a massive tax increase that will enrage the voters and force out Governor Pat Quinn, putting Lisa Madigan in the governor’s office with a potful of revenue to spend on the people who provide the financial support for the political shenanigans that often pass for government in this state.
As loyal readers know, I had, and in a sense, have, my own theory regarding the regular Democrats’ approach to the Blagojevich imbroglio. I thought that a deal was struck whereby Blagojevich would be put out of office and Governor Quinn would appoint Lisa Madigan to President Obama’s Senate seat. This would give Lisa a nice plum, though perhaps not the plum she really wanted, and assure that things would go smoothly for Governor Quinn in the legislature, controlled by Lisa’s father, House Speaker, 13th Ward Committeeman, and (probably) second most powerful man in Illinois Mike Madigan. Then they would go from there. That plan fell apart when our jello-spined senior senator, Dick Durbin, turned tail and ran at the first cry of racism and acceded to Roland Burris’s ascension to the United States Senate. So my not being entirely onboard with what I’ll call the Kass conjecture might be construed as a case of my talking my own position, but I’ll risk that and spell out my problems with the theory.
On its face, the Kass conjecture makes sense: The pols get rid of a reformer (Quinn) for good, Mike Madigan gets more power, or at least the fatherly pride of seeing his daughter in high office, and the pols get lots of money to spend on their pals and financial supporters. But one cog that seems out of place is Mike Madigan himself. Madigan, despite his Party, does not come across as a reflexive tax increaser. In fact, certainly socially and in many cases financially, he comes across as something of a conservative who would not be a Democrat if he were not from the 13th ward but was raised in, say, Elmhurst. He has spoken in a not entirely hostile manner toward a tax increase, but, as he has said, this is a concession to fiscal reality: If the state is going to continue spending like it does, it simply must raise taxes. The Illinois constitution does not allow deficit spending.
The most important reason that Mr. Madigan is probably not plotting some sort of massive tax increase lies not in ideology, which matters little to him (This very wise eschewal of the bounds of ideology is also the reason that I am sure Mr. Madigan would have been a Republican if he were raised in DuPage County.), but in pure politics. Mr. Madigan is very protective of his majority in the State House of Representatives. He realizes that a big tax increase will not play well, especially in suburban Cook County and the collar counties and could threaten his majority; he could not place ALL the blame for a tax increase on Governor Quinn. Therefore, while a tax increase of some sort is inevitable, don’t look for it to be large or for Mr. Madigan to be one of its chief proponents. His having to be dragged, kicking and screaming, into such a tax increase may be largely smoke and mirrors, as some will inevitably suggest, but I suspect otherwise. Further, even with a tax increase, there won’t be a lot of money to spend on favored constituencies; we will have to use the money to dig ourselves out of the hole Mr. Blagojevich, and his accomplices in the General Assembly, have dug for us.
I also think that the people who matter in Chicago and Illinois politics do not look as far ahead as a “put Pat Quinn in, raise taxes, dump Quinn, put Lisa in” plan would necessitate. This is not because they are not smart; it is because they are, by and large, very smart and know that planning too far ahead in politics is a dangerous, and ossifying, strategy.
One of the theories that is being bandied about by those who love Chicago politics, most notably by John Kass, is that the grand plan of the people who really matter in the politics of our nation’s greatest city is to get rid of Rod (“I thought of Mandela, Dr. King, and Gandhi”) Blagojevich (Blago has been very cooperative in this aspect of the plan.) and then pass a massive tax increase that will enrage the voters and force out Governor Pat Quinn, putting Lisa Madigan in the governor’s office with a potful of revenue to spend on the people who provide the financial support for the political shenanigans that often pass for government in this state.
As loyal readers know, I had, and in a sense, have, my own theory regarding the regular Democrats’ approach to the Blagojevich imbroglio. I thought that a deal was struck whereby Blagojevich would be put out of office and Governor Quinn would appoint Lisa Madigan to President Obama’s Senate seat. This would give Lisa a nice plum, though perhaps not the plum she really wanted, and assure that things would go smoothly for Governor Quinn in the legislature, controlled by Lisa’s father, House Speaker, 13th Ward Committeeman, and (probably) second most powerful man in Illinois Mike Madigan. Then they would go from there. That plan fell apart when our jello-spined senior senator, Dick Durbin, turned tail and ran at the first cry of racism and acceded to Roland Burris’s ascension to the United States Senate. So my not being entirely onboard with what I’ll call the Kass conjecture might be construed as a case of my talking my own position, but I’ll risk that and spell out my problems with the theory.
On its face, the Kass conjecture makes sense: The pols get rid of a reformer (Quinn) for good, Mike Madigan gets more power, or at least the fatherly pride of seeing his daughter in high office, and the pols get lots of money to spend on their pals and financial supporters. But one cog that seems out of place is Mike Madigan himself. Madigan, despite his Party, does not come across as a reflexive tax increaser. In fact, certainly socially and in many cases financially, he comes across as something of a conservative who would not be a Democrat if he were not from the 13th ward but was raised in, say, Elmhurst. He has spoken in a not entirely hostile manner toward a tax increase, but, as he has said, this is a concession to fiscal reality: If the state is going to continue spending like it does, it simply must raise taxes. The Illinois constitution does not allow deficit spending.
The most important reason that Mr. Madigan is probably not plotting some sort of massive tax increase lies not in ideology, which matters little to him (This very wise eschewal of the bounds of ideology is also the reason that I am sure Mr. Madigan would have been a Republican if he were raised in DuPage County.), but in pure politics. Mr. Madigan is very protective of his majority in the State House of Representatives. He realizes that a big tax increase will not play well, especially in suburban Cook County and the collar counties and could threaten his majority; he could not place ALL the blame for a tax increase on Governor Quinn. Therefore, while a tax increase of some sort is inevitable, don’t look for it to be large or for Mr. Madigan to be one of its chief proponents. His having to be dragged, kicking and screaming, into such a tax increase may be largely smoke and mirrors, as some will inevitably suggest, but I suspect otherwise. Further, even with a tax increase, there won’t be a lot of money to spend on favored constituencies; we will have to use the money to dig ourselves out of the hole Mr. Blagojevich, and his accomplices in the General Assembly, have dug for us.
I also think that the people who matter in Chicago and Illinois politics do not look as far ahead as a “put Pat Quinn in, raise taxes, dump Quinn, put Lisa in” plan would necessitate. This is not because they are not smart; it is because they are, by and large, very smart and know that planning too far ahead in politics is a dangerous, and ossifying, strategy.
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