Category Archives: Random Access

Random Access, the op-ed.

What? Are They Nuts?

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What? Is he nuts?

Miami-Dade Superintendent of Schools Alberto Carvalho plans to sue the state of Florida to recoup approximately $25 million in “lost revenue” because declining property values have hammered the (new) state funding formula.

Mr. Carvalho also plans to hire outside counsel for the litigation. At $4-500 per hour for Florida attorneys, that makes this a $100,000 lawsuit. Probably more if he hires a white shoe firm.

Sounds fine to me. Let’s replace a couple of good teachers with a lawyer.

And another thing. Everybody wants an increasing slice of this shrinking pie. Doesn’t anybody else notice how ridiculous it is for one agency of government to sue another agency of government? If the school district wins, the Agency of Transportation will be duty bound to sue not the State but the Miami-Dade School District. After all, if the state gives the school district the “lost revenue” that money will arguably come from the highway trust fund.

I can’t believe that Alan Shore won’t be around to litigate that one.

Throw Good Money After Bad

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Congress critters have the right to free speech. They also have the right to remain silent. There is a message there to those who would listen.

Senator Christopher Dodd (D-CT), is a lawyer and Chairman of the Senate Banking Committee. Representative Barney Frank (D-MA), is a lawyer and Chairman of the House Financial Services Committee.

“With regard to the automobile industry, certainly we should not throw good money after bad,” Senator Dodd said, “nor should we subsidize ineffective performance and inefficient production.”

Thank you, Senator, for that insightful, positive, and critical decree.

I need to analyze the players a bit before I get to the main point of this piece.

Senator Dodd and Representative Frank make the perfect pair. Combined, they are the Barney Rubble of the United States Congress.

I looked at the $700 billion Barney Rubble campaign finance bill and it is indeed an interesting pattern. See, Barney Rubble specifically enabled the formerly illegal activities that lead us into the “mortgage crisis,” then rejected all attempts to get Fannie Mae and Freddie Mac under control. Barney Rubble has blocked expanding domestic oil production because it is bad for us. (As an aside, Saudi oil minister Ali Al-Naimi told 60 Minutes last night that he is bullish on oil’s future and that expanding domestic oil production here is bad for us.) Barney Rubble did plenty more but you can Google it yourself.

I have been noodling about how this perfect storm of a financial crisis hit. Few scientists, fewer engineers, and no forensic guy believes in coincidence. It is almost impossible to believe that sheer happenstance conspired to put crooks in the banks, burst the housing bubble, jack oil prices, and more all in the same few months.

Somebody did it on purpose.

I nominate Barney Rubble.

Has our hero ever held a real job? Made anything with his (collective) hands? Yes, I used collective on purpose. Barney Rubble gave away $700 billion in handouts with scarcely a whimper but when three actual manufacturers who are the end source of more than a third of this country’s jobs asked for just five percent of that in loans, Messrs. Rubble know, absolutely know, that Congress needs to micro-manage the supplicants.

Boy, do I feel better about my tax dollars now. Congress gonna protect me from those evil auto makers.

Why?

My friend “Bob” posited the question, “Anyone know how to find which politician got money from which source?

“My guess is,” he said, “you will find that the car companies haven’t been making their proper political contributions like the lads on Wall Street.”

Christopher Dodd has received $21,202,690 in contributions. His top contributors include security brokers and investment companies, lawyers, the insurance “industry,” banks, investment banks and hedge funds, and, of course, lobbyists.

Barney Frank has received only $4,231,044 in contributions. [Piker.] His top contributors include lawyers, UBS Americas, Brown Brothers Harriman & Co, JPMorgan Chase, Ernst & Young, the Credit Union National Association, and Independent Community Bankers Of America.

“Bob” was right. Not a single car company on the list.

Money doesn’t buy influence, right? Our Congress Critters would never sell their votes, right? Right?

To paraphrase “Bob,” if you pay off Barney Rubble, he treats you right. If you diss him, he burns you. Just like the Mafia. Our Congress.

Main Point: Starting today, certainly we should not throw good money after bad, nor should we subsidize ineffective performance.

Not one single Representative or Senator has offered to work for $1 per year. The car company CEOs are.

Not one single Representative or Senator has offered to give up their aircraft. The car company CEOs are.

BROKEN NEWS

We are doomed. Sell your automobile stock right now. Representatives Nancy Pelosi and Barney Frank held a news conference today.“Come March 31,” Speaker Pelosi said, “it is our hope that there will be a viable automotive industry in our country with transparency and accountability to the taxpayer.”

Under the plan, automakers will be given $15 Billion in loans.

That’s a win–win for Congress. Barney Rubble can say “We did all we could but they screwed the pooch.” Sure enough. Since $15 billion is less than half what the companies need to weather the crisis, they might as well fold their tents now.

“How could you possibly accept the same management to run restructured companies that have driven us into the ditch we are in?” Senator Dodd asked.

Was he talking about the automakers or the Congress?

Paraphrasing Senator Richard Shelby (R-AL), The model of this Congress is failure. This Congress has already failed and should we rescue them? I say no.

Senator Dodd almost said it. Starting today, with regard to the United States government, certainly we should not throw good money after bad, nor should we subsidize ineffective performance.

Thanks to Senator Dodd, we don’t have to.

Say, hey, IRS. It’s been real but I’m afraid you won’t be getting any more checks this year. Senator Dodd says NO to throwing good money after bad.

And about Barney Rubble? I’ve said it before. It’s time to throw da bums out and start over.

The Russians are Coming! The Russians are Coming!

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“Everybody to get from street!”

I was late to bed and early to rise but it could have been worse. Somebody triggered a backup alarm somewhere within earshot about 0:dark:30; it woke me. I folded the pillow over my head but I didn’t really sleep that well from then until the alarm.

Speaking of alarms…

I know where the Russians are. I want to know where American reporters are.

The Russian navy announced Carribean maneuvers with the Venezuelans about 2-1/2 months ago or during the height of the presidential campaign season. Nobody noticed, caught up as we were in the color barrier and the cost of Sarah Palin’s wardrobe. Speaking of color, a Cuban poll released this morning noted that no black man would ever ascend to a leadership position in Cuba.

Cuba? CUBA? The biggest foreign policy problem for the new administration is not Iran, Afghanistan, or Iraq. The biggest foreign policy problem is having missile-toting, nuclear-powered warships some 150 miles from my personal front door. (Remember the now-fabled “90 miles from the Bay of Pigs”? Regular readers may recall that my house in the Keys is about that distance away from Cuba).

Four Russian North Fleet and 12 Venezuelan ships lead by nuclear cruiser Peter the Great sailed today from Venezuela’s La Guaira port. The joint naval exercises began this morning and will last two days. You can read the entire story from Novosti, the English-language Russian News and Information Agency.

The Russian and Venezuelan ships-of-war will “practice sea rescue operations and maneuvering, and conduct live-firing artillery drills.” The public reason for the exercises is to plan terrorism and drug trafficking countermeasures but the exercises include aircraft, missiles, and 1,600 Russian marines. Russian strategic bombers overflew South America last month.

Russian President Dmitry Medvedev called the military cooperation “very useful.”

Indeed.

Russia’s entire economy is based on petrodollars. Oil has tanked and they are getting very nervous. When Russia or China (or both together) get nervous, we need to be very worried.

If that’s not enough to get your attention, Venezuelan president Hugo Chavez believes he is the second coming of Castro. Except he may be nastier.

I remember the original Missile Crisis in the Carribean. “Duck and cover” is not a particularly useful exercise against nuclear attack but it is a great exercise to scare fifth-graders.

Here’s the bigger question: I googled and found that the closest American media to notice this is Voice of America. I wonder why no major American reporter seems to remember the last crisis and why no major American news organization is covering this one.

Change?

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Change has come to America and Republicans can rejoice. After 8 scandal free years inside the Beltway, the Clinton Administration is back!

U.S. President-elect Barack Obama formally nominated Timothy Geithner as Treasury secretary and Lawrence Summers for the National Economic Council. Geithner worked for Summers who was Treasury secretary under Clinton. Hillary Clinton looks to be Secretary of State. Gov. Bill Richardson of New Mexico is the likely Secretary of Commerce. He was Energy Secretary and U.N. Ambassador under Clinton. Tom Daschle as Secretary of HHS may not sound like a Clintonite but he did lead the defense in the Senate.

Slightly more nebulous, Eric Holder served as deputy attorney general under Clinton and may get a promotion from Obama. Gov. Janet Napolitano of Arizona at Homeland Security served as attorney for Anita Hill in the Senate hearings and is a former U.S. attorney appointed by Clinton.

I’m thinking it is time to pull that biological-fluids-coated dress away from Gil Grissom and give it back to the media.

Bashing – III

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I love that General Motors has retired two of five corporate jets.

I do not love that Congress spent their time bashing Ford CEO Alan Mulally, Chrysler CEO Robert Nardelli, and General Motors CEO Rick Wagoner for flying privately to the hearings. What should the CEOs have done? Driven to Washington?

Has anybody in Congress ever looked at the Presidential fleet?

Has anybody looked at how Congress Critters prefer to travel? Can you spell c-o-r-p-o-r-a-t-e jet? Or the Air Force C-20? The C-20 aircraft provide “distinguished visitor airlift” for military and government officials. What’s a C-20? That would be a Gulfstream IV. As an aside, General Motors leases the G-IV aircraft Mr. Wagoner used. We taxpayers own the C-20 G-IVs.

Gee, ya think the Congress critters could maybe perhaps be bashing the wrong target?

It is far, far easier to tear down what you cannot possibly create on your own than it is to create something tangible.

I promised a solution somewhere in this series. Here it is.

Warren Buffett says the only possibilities left for the automakers are a bailout or bankruptcy.

Sorry, Mr. Buffett. You’re wrong. Bankruptcy is not an option.

Bankruptcy is attractive because it allows the companies to void their union contracts and turn over their horrendously expensive pension obligations to the taxpayers. The serious downside is that no manufacturing company recovers from bankruptcy. Would you buy a $30 grand widget if you knew there would be no warranty service or even parts available next year? Nobody would. The serious downside is that half of American manufacturing workers will find themselves out of work within 12 months. The serious downside is that some huge number of individual American shareholders (including me) will lose even more from their retirement funds because bankrupt company stocks evaporate.

But a bailout isn’t the answer, either.

I have a three-part plan. 1: Americans need an attitude adjustment. 2: Carmakers need an attitude adjustment. 3: Congress needs an attitude adjustment.

First, remember what your mother taught you: If you can’t say anything nice, don’t say it at all. Bashing a business leader for doing something you know nothing about does absolutely nothing productive. If you do that, stop. The corollary to mom’s adage is simple. If you hear someone else bashing American business, stop them.

Second, American automakers need to get ahead of the curve on market prediction, manufacturing planning, and management.

GM is now working overtime in Texas to make trucks because they shut their truck plants down too early. Not enough of the American auto production lines are flexible. And ongoing layoffs have stripped American companies of their best and brightest workers (that’s not just an automaker problem. At Motorola, for example, product developers with excellent rankings are next up for layoff because all of the “average” and “good” engineers are already gone.)

Finally, the automakers do need some Congressional help. Congress can pass a law. Change labor laws to let the automakers void their union contracts. Then give those horrendously expensive pension obligations to the Fed. That’s going to happen whether we taxpayers like it or not.

Give us that kind of bailout and Messrs. Mulally, Nardelli, and Wagoner can take UAW President Ron Gettelfinger out to the woodshed and beat him until they have appropriate contracts for all the employees as well as for Messrs. Mulally, Nardelli, and Wagoner. After all, if the union folk must give up half their pay, the CEOs can give up most (90%?) of theirs.

We need to do something. Chrysler is probably worth about a billion dollars on the market. Ford’s market cap is $4.04 billion today. GM’s market cap is below Ford at just $1.91 billion. Bill Gates, Mr. Buffet, or the U.S. Congress could simply buy all three on the open market and even though it would be a better investment than the bank bailout has proven to be, that latter is a bleak thought.