Monthly Archives: March 2009

Eminently Outrageous

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We got a chicken
in every pot from FDR.
We’ll get a moped with 110 year payback
in every garage from Obama.

General Motors CEO Rick Wagoner has been told to “resign” by Obama administration. Mr. Wagoner has served in that position for about eight years. The GM Board of Directors appointed him; GM shareholders like me accepted him.

NBC reports that a senior Obama administration official told the network that Wagoner was “asked to step down by the White House.” The Obama administration will announce the automaker’s request for additional government rescue loans, two people familiar with the matter said.

One of my correspondents has shouted that, “This…. is … an…. OUTRAGE!!!”

He’s right.

Apparently Mr. Wagoner is out because he failed to gain the concessions from the UAW that government officials had set as targets to justify further loans. Obviously, the administration has forgotten the UAW strikes that crippled GM just a year ago and the ongoing rancor the union projects.

Mr. Wagoner has a lot of faults — mostly that he is a bean counter, not a car guy — but this drive by the administration to take over GM is a backdoor attempt at eminent domain. They think by sneaking in the backdoor, they can nationalize the company without buying any land.

The legal doctrine of eminent domain allows a government to expropriate property within the law. Without the doctrine, taking property — whether your house or your farm or your business — is either a criminal or a revolutionary act.

Here’s my bottom line; if the Obamanation wants my GM stock, they can indeed buy it. Tanking the business then taking it over from behind is not just plain theft; it is cowardly theft.

Be warned.

If you own a small bank, or a farm, or a restaurant on Main Street, you could very well be next.

Oh, yeah. And rumor has it that the government-run GM new product line-up includes a license to build the Tata.

The Great Global Black Out

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Did you do it? Did you join The Great Global Black Out to celebrate global warming today?

The World Wildlife Federation targeted Earth Hour 2009 on more than one billion people in 1,000 cities worldwide to send a “powerful global message” to the world leaders who will attend the Global Climate Change Conference in Copenhagenin December. Global landmarks including the Golden Gate Bridge, the Colosseum, the Sydney Opera House, and the Coca Cola billboard in Times Square all went dark in this monument to bad science.

I hope, in turning off your lights, you remembered the lights on the VCR and the microwave oven and most assuredly the light in the refrigerator. Opening the fridge for beer would definitely break the spell. After all, the Far Green (that would be the folks who dreamed up the Great Global Black Out) also want us to believe I can burn 167 KW-Hrs per month with the little LEDs and incandescent lights I have running in North Puffin.

We are safe, though. I turned all of my lights on to avoid the Pico Ice Age caused by the sudden cessation of heat-emitting filaments.

It is worth noting that the imagery for Earth Hour includes a person holding an open flame to bring light unto the darkness.

For more facts about “Global Warming” visit the Petition Project where more than 31,000 American scientists have stated unequivocally that no convincing scientific evidence ties human activity to the disruption of the Earth’s climate. Those scientists include the past president of the National Academy of Sciences.

The Times, They Are A Changin’

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“Come writers and critics. Who prophesize with your pen. And keep your eyes wide. The chance won’t come again …” The Seattle Post-Intelligencer has dropped its print edition and become an Internet-only entity. The “P-I” is the largest American paper to do so.

OK, OK. This year it’s the “The Pee Eyes, They Are A Changin’.” It won’t be until next year that The Times gets to changin’. Sorry, Mr. Dylan.

There is good news and bad news in this story.

The bad news is quite simple.

P-I owner Hearst Newspapers has dumped about 145 employees (they all did get some kind of severance but they are out of work). The new P-I site won’t need them. See, they are out of the news business and into the opinion business.

Oh, they won’t fess up to that but let’s take a look at how the opinion pages work in a newspaper. Big national papers like the New York Times or Wall Street Journal invite major government officials, A-list actors, and Nobel Laureates to write op-ed columns for their pages. Medium sized regional papers like the Detroit Free Press or the Seattle Post-Intelligencer have to go to the second team for opinion writers. They get mayors and dog catchers and writers like me to opine.

The new P I dot com has recruited some current and former government officials, including a former mayor, a former police chief, and the (not-yet) former Seattle school superintendent, to write columns (we call them blogs in the trade). It will create pages for some of the print edition’s more popular columnists and bloggers. And it will also update its pages for the legion of (unpaid) local bloggers who already work for them for free.

Oops. Sorry. Former mayors and dog catchers and writers like me.

Nowhere in that list are any actual reporters. Nowhere in that list are any editors. Nowhere in that list are any fact checkers.

The bad news is this: American readers have a belief that “if it’s in the paper, it must be true.” Newspapers have polished that belief with staffs of reporters, editors, and fact checkers.

The “demise of the great American newspaper” isn’t looming as we lose advertising and move onto the Internet. That’s just a problem for the wood pulp industry. The demise of the great American newspaper came when newspaper management decided opinion was interchangeable with fact.

I said at the beginning that there would be good news and bad news in this story. Let me know when you find the good news.

Are We Managing this Mess?

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Some neighbors call Roy Haynes “the World’s Cheapest Man.” I was outraged since I think of myself that way; I reckoned they missed a bet until I saw him dumpster diving on the local news. He dives every day. I do it only when I see something really good and then almost never if there are news cameras about.

Mr. Haynes says to live like “every year is a recession.”

Meanwhile, outspoken California food activist Alice Waters knows we have to make tough choices. She wants us to give up our Nikes to buy organic grapes. Never mind that organic grapes cost four times as much as the Chilean grapes on sale this week or that I have never been able to buy Nikes in the first place.

Methinks Mr. Haynes gets it more than Ms. Waters.

The lead recession story today is that A.I.G. released the names of dozens of the financial institutions they shuffled our bailout money to. We provided $12 billion each for Société Générale, and Deutsche Bank, and “smaller amounts to Barclays and UBS. Wachovia, a bank that is already defunct got $1.5 billion more defuncter.

Now I really can’t buy any Nikes.

National Economic Council chair Lawrence Summers appeared on Face The Nation to talk about it.

The NY Times cherry picked this quote from Mr. Summers’ 15 minutes in the spotlight, “There are a lot of terrible things that have happened … but what’s happened at A.I.G. is the most outrageous.” That irks me because Mr. Summers told Bob Shieffer that the government can’t do much to stop insurance giant’s payout of millions “because they [the bonusees] all have contracts.”

Mr. Shieffer reminded him that A.I.G. managed to cut salaries and bonuses and jobs for all their other people and that there were plenty of “financial wizards at Starbucks with their laptops open, looking for work.”

Mr. Summers, who, despite the NY Times article, apparently thinks the Administration is doing a good job managing this mess, had no reply.

In other news, “Financial fraud is focus of attack by prosecutors” as Bernie Madoff went to jail. Fortunately, it’s not just Mr. Madoff. Unfortunately it’s not Congress. “Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont — all stemming from home loan scams.”

I’m thinking the foot soldiers will go to jail but anybody with a bonus over a million bucks is home free.

I had a nice chat with bank president Rick Manahan last week. Mr. Manahan heads the Peoples Trust Company, a privately held community bank with branches in Enosburg Falls, Essex Town Center, Georgia (the town, not the state), St. Albans, and Swanton, Vermont. Like almost all “real” banks1 Rick has no toxic loans; unfortunately like almost all real banks he is now forced to stave off the regulatory nightmare sure to envelop the community banks. His bank will hold the funds for the CapCancer event this summer and will sponsor us as well.

The regulatory issue is a real one. Doctors’ offices have about 6 staff members per doc now because they have so many regulatory and insurance demands to meet. Banks already seem to have about a 1:1 ratio of employees to customers (I made that up) to meet their legal obligations. I don’t think we need to saddle them with more.

“Rules don’t work if people have no fear of them,” Barney Rubble said last week. I think Joe Stalin said it first.

Back to Mr. Summers. He is the (drummed out) Harvard president who said that women have lesser aptitude for work in the highest levels of math and science. The economics prof was Clinton’s Secretary of the Treasury and now heads Obama’s National Economic Council. He is one of more than two dozen members of the Obama inner circle who served in previous administrations.

Change?

I don’t think so.

I do think Mr. Summers must be the brains behind calling the 9,000 earmarks “old business.”

Are we managing this mess?

I don’t think so.

I had hoped I wouldn’t have to blog about this mess any more. I guess that really means I had hoped the people we elect to represent us were at least three quarters as smart as I am.

BROKEN NEWS

The President said today that he will do “everything possible” to get the $165 million of toxic A.I.G. bonuses back. Whoopee. All the pundits said today the checks have already been paid. It’s too late.

I don’t think so.

All it takes is a little tax change. Democrats called it a “windfall profits tax” when they wanted to do it to the oil companies. Now they can call it a “windfall bonus tax.” Set the rate at 100%.

All it takes is the political will to go against the very people who underwrote every congressional campaign this year.
Huh.

I don’t get it. I have spent most of a year hammering our Congress critters about how they just don’t listen and look at what happened. I floated this whacko “windfall bonus tax” and, for first time, they listened!

Let’s see if I have this right: The White House is still trying to “formulate a policy” and the Congress is scrambling to “implement new rules.” Sounds like no one in Washington deserves their bonuses, either.

On the other hand, Mr. Summers apparently still believes the Administration is doing a good job managing this mess. Must not be any female mathematicians on the team, innit.

1“Real” banks means the kind of community bank we used to have. These companies might be large, even statewide, depositories but they have concentrated on banking instead of getting into trouble with reinsurance and other playgrounds outside their areas of expertise.

Best Friends Forever

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I saw Missy and Biff when I stopped for the daily fishwrap at the general store and bait emporium here in North Puffin this morning.

“Obama’s attack dogs have it wrong,” Missy said before I had even knocked the snow off my boots. Attack dogs? Missy wears bling which dangles and jangles when she dips her minnows out of the bait tank. She usually prefers to talk about fishing and motorcycles and her job with the state so I put down my newspaper and paid attention.

“Even Biff notices that they go off and drag Monica Lewinsky or A-Rod on steroids or Global Warming through the news,” she pointed to my newspaper, “when they want to distract us from what’s going on in Washington.”

Missy is right. It’s not that anyone, particularly Biff the Plumber, wants the much vaunted (and incalculably expensive) recovery to fail. It’s simply that the much vaunted (and incalculably expensive) recovery has no chance to succeed and everyone in the Administration is afraid we might notice.

I am not a national economist nor do I play one on television. I have, however, run a small business for more than 20 years and kept a budget for more than 40. I may not show my butt crack on the job but I’m obviously closer to Biff the Plumber than to my Congress Critters.

“Last month Obama said the Republicans were his BFFs,” she said. “Now he’s acting like they stole the ball in Keep-Away again.”

Indeed. The current spat lets the Administration skate past the fact that not one single solitary penny spent by a government creates wealth. Oh, don’t get me wrong. Government spending makes plenty of people — particularly elected people — wealthy but it does not create wealth; it just moves the money from one pocket to another. The GDP not only does not rise, it falls when all spending is government spending.

Government spending is the country-wide equivalent of taking in each other’s laundry.

Government borrowing is the country-wide equivalent of taking a reverse mortgage on your house.

But wait! A reverse mortgage sounds like a pretty good idea. You still can’t take it with you but you get to spend it all before you go.

“We decided against a reverse mortgage last year,” Missy said. “The cost is too high and we figure we should leave at least a little something for the kids if we can.”

When the government takes a reverse mortgage on our national house, the kids will get less than nothing. That means the much vaunted (and incalculably expensive) recovery may ruin us.

Missy said she asked Vermont’s lone Congressman if he could prove the G.R.A.F.T. Act would work.

“‘The President understands what Vermonters know: our economy is struggling and bold action is required’,” she said Peter Welch told her. “‘This plan is a major step toward restoring our lost jobs, lost wages and lost opportunities. This bill achieves those goals.'”

She asked him how.

“It relieves pressure on Vermont taxpayers, creates sustainable green jobs, and provides relief,” he said.

When she said she wants some data to back that up, he went on to the next question.

I agree. When 32,000 thousand scientists say “Hey, global warming doesn’t happen the way the politicians say it does,” I’d rather listen to the data than to some rock star with an advertising budget. And when the impartial Congressional Budget Office tells Peter Welch the G.R.A.F.T. Act won’t work, perhaps he should listen. Unless the CBO (his BFF just last week) is no longer his sandbox sweetheart.

And, just in case you thought the friendly pranks had, well, grown up, the Democratic Congressional Campaign Committee took time out from spending money to divert us with some fun.

We ought to be past the schoolyard BFF stage.

If we don’t stop acting like spoiled little kids, the people wearing ties inside the Beltway will bankrupt our proudest industries. And then they surely will bankrupt the entire country.