The tide is turning

The tide seems to be turning a little as the media starts to realize just how badly we have all been abused by the robber barons of Wall Street. It takes a bit of a commitment to read Michael Lewis’ article (link at right) but just few minutes to read what Tom Friedman wrote today about it. These people need to be held accountable; these were not mistakes, these were premeditated acts of larceny that are now costing regular, taxpaying citizens billions.

I’ll probably take a few days off for Thanksgiving. I wish you all a happy holiday. We still have much to be thankful for. I’ll close with this quote from Lincoln’s second annual message to Congress, in December 1862:

“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.”

Will the real stooge please stand up

Why are the auto company CEOs getting so much grief from the press, pundits and Congress, while the Wall Street and banking CEOs are getting so little? Because the critics are gutless and self-serving. Financial organizations give out far more PAC money than the auto companies, and, being primarily New York-based, have a much cozier relationship to the media, who tend to be star-struck by the power and fabulousness of the masters-of-the-universe-types at Goldman and Citi.

But who really deserves the scorn? Running a car company is one of the most complex tasks in business. You must market and sell a very expensive consumer product to a very fickle consumer. You have to design those products for where the market will be in five years. You have highly sophisticated competitors from at least six foreign countries. You have to deal with massive numbers of employees and several very powerful unions. The products you make require the very latest in sophisticated engineering and production techniques, combined with outstanding design. The fluctuations in two very volatile commodities (oil and credit) can make or break you. Oh, and just to keep it interesting, by law, you must sell your products through 10,000 independent businesses, each run by a hoople who is sure he knows more about the car business than you do.

To be a successful banker you have to lend money at a higher interest rate than your cost of capital, look good in a suit, and be able to show the yokels a good time when they visit New York. To be fair, you must do all three of these things well. Two out of three is not good enough, as we are learning in an oh-so-painful fashion now.

Two of the three men running the Detroit auto companies have been there short times and came from other industries, and all three are struggling to overcome the big mistakes that were made over decades by their predecessors.

And yet turn on CNBC or any other news program and you will surely see some pretty face explaining in 90 seconds what Detroit needs to do to fix itself. Like they know. And of course the politicians are all shocked to discover that the auto execs make millions and don’t fly coach.

What stunning, self-righteous, hypocrisy. I never dreamed I’d be writing a post defending auto CEOs, but if they are the Three Stooges, then Lehman, AIG, Goldman and Fannie Mae were led by the Four Horsemen of the Apocalypse.

And when the smoke cleared...

...the score was Ohio State 42, Michigan 7. God's in his heaven. All's right with the world.

I don't know

Should Hillary be Secretary of State? I don’t know. Is bailing out GM the right thing to do, or just what I’d like to see happen? I don’t know. Is Hank Paulson doing yeoman’s work in an impossible situation, or just greasing all his Wall Street pals? I don’t know the answer to that question either. What I do know is that in order for there to be harmony in the universe for the next twelve months, Ohio State must beat Michigan tomorrow. And that is a fact, Jack.

Miscellaneous

A New Yorker cover is often worth the price of the magazine all by itself. This one qualifies easily. Thanks to Wilton for the nomination.

Hankster offers the following quote from Saul Bellows as a prescription for your times: "We are here, in this fallen state, riven by contradictions, given to understand some things but never others, faltering in our wills, flawed in our abilities, uncertain in our actions. But that is where we must begin and there is no excuse for not taking the task seriously."

Most of the talk about an Obama economic stimulus plan centers on creating jobs for people to work on infrastructure projects. If you will pardon a brief moment of self-satisfaction I wish to refer you to my January 23, 2008 post offering the "d’blank Economic Stimulation Plan," which did exactly that, but never made it out of committee. I always knew I’d have been a better President than W. here is the proof.

Finally, this from UPI: “Unhappy people watch significantly more television compared with happy people who are more socially active, according to a University of Maryland analysis of U.S. adults. Happy people attended more religious services, voted more and read more newspapers."

Give GM the money

I know, I know. It’s bad economic policy and probably un-American too, but we can’t let General Motors go under; at least not right now.

I know all the reasons why not, and if we weren’t already in the middle of an economic shit-storm unlike anything else in our lifetimes, I’d be arguing to let them go through Chapter 11 and emerge in a trimmed-down form more befitting the 21st Century. But we are in a terrible economic crisis, and it makes no sense to allow another 200,000 people to be added to the jobless – not to mention tens of thousands more from GM’s supplier companies, who employ as many as three million.

Whatever we lend them now we won’t be spending on unemployment checks, food stamps, job retraining, the support of a bankrupt city of Detroit, etc. I am also persuaded that a viable automotive industry is vital to the national defense.

This money should not be lent without significant strings attached that include management and labor give-backs. But it must be given lest we dig this hole even deeper. Now is not the time to worry about the deficit – we need to keep bailing this boat hard.

Happy Birthday Chuck

I don't care what anyone says, I've always liked Prince Charles, and today is his 60th birthday. He is an accomplished pilot, polo player and organic farmer. He is largely considered to be eccentric because of his long-held beliefs in green topics, which have now become mainstream. He raises tens of millions of pounds every year for the Prince's Trust which serves disadvantaged youth, and he makes over 600 appearances per year on behalf of the crown.

Just imagine being born and raised for only one purpose in life and getting to be 60 without having a chance to do that one thing. It must be hard. I won't go into the whole Dianna/Camilla thing as it is too emotional an issue.

Finally, check out that coat. Not everyone could look good in something like that. I wish I had one.

Pigs at the trough

The market is down big again today, and I’m sitting here waiting to hear how many of my friends will be among the 600 people losing their jobs at Time this week. I know a few of the names already; they are young family men with a couple of kids who will now be out of work, cast-off from an industry that is contracting, sitting at home in a house they can’t afford and can’t sell, with depleted savings and little chance of finding a decent job in the near term.

Their fate is due primarily to the failures of the company’s management to adjust to changes in the market that have taken place over nearly a decade. Senior management has rewarded themselves with new, more powerful jobs and contracts.

Meanwhile, the government is pumping tens of billions more into AIG and the other weak sisters of Wall Street like they were force feeding ducks to make a cash pâté. In gratitude, the recipients sit on the dough rather than taking the risk of making loans to either businesses or consumers. That was some deal Paulson and Congress cut.

Fannie Mae reported a $29 billion loss today, wiping out all of their previously reported profits for the decade.

American Express is turning itself into a bank holding company so that it can find a place at the Federal feeding trough, because, God knows, they deserve some of that money, too, after lowering their decades-long conservative standards the past few years to grab some of the easy money in substandard credit.

The GM, Ford and Chrysler managements are threatening the loss of tens of thousands more jobs if they don’t get their share of the pork – billions more. They ended free health care for their white collar retirees this week and would do the same in a heartbeat for the union retirees if there weren’t contracts in place to prevent them. We spent most of the last 25-30 years blaming the unions for the auto industry’s problems, but every time there was a choice to be made management made the wrong one: wrong vehicles, wrong styling, too many brands, bad union contracts, and on and on.

The leaders of these companies made millions in undeserved bonuses, wrote books, became statesmen and retired to Arizona to play some golf. The people they led lost their jobs and their homes.

No plutocrat actually exploded like the Python man above, but they were all just so many pigs at the trough. Shame on them.

Barack the conservative

Barack Obama is going to surprise a lot of people by being more conservative than expected. And by “conservative” I mean both in the sense of cautious as well as ideologically. As David Brook’s quoted Andrew Kohut of the Pew Research Center in his column this morning, “This was an election where the middle asserted itself. There was “no sign” of a “movement to the left.” Brook’s expect Obama to govern that way and makes a persuasive case.

The Rahm Emanuel pick is a good first sign. I remembered and reread a Fortune article from September 2006 in which Democratic strategist Paul Begala, who described Emanuel's aggressive style as a "cross between a hemorrhoid and a toothache." But the point of the article was more that Emanuel is both smart and pragmatic and he knows how things work at both ends of Pennsylvania Avenue.

A funny quote is attributed to Bill Clinton just after the ’92 election, in which after being asked how he felt, he was reported to have said, “like a dog that finally caught the pickup truck he’d been chasing.” That may have contributed to his waiting until just a week or so before taking office to pick his WH staff, which turned out to be the wrong people. Obama did this first and picked pros.

Did you know Obama is considered to be a pretty good poker player? If you did it was despite his campaign staff’s strenuous efforts to keep it under wraps until after the election. It’s not a bad skill for a President to have.

How much interest is there in the election? By noon on Wednesday you couldn’t find a copy of the New York Times anywhere for love nor money. Copies are for sale on eBay starting at $40 and going up from there. Time magazine is out today. They normally put out office copies for employees first thing in the morning, but there were none today and they have gone back to press to print an additional 200,000 copies. I think a lot of people are starting their own family time capsules.

Here’s a quote I heard the other day, apropos of nothing special: “Experience is the name that everyone gives to their mistakes.” Oscar Wilde.

Counting the days

It has felt to me for some time like the White House had been taken over by a band of corrupt, stupid, frat boys bent on sacking the Treasury and rubbing everyone’s nose in it for fun. Well, we can count the days now until they are gone. They could do a lot more damage in the two and a half months they have left, but frat-boy-cheerleader-in-chief seems inclined to keep a low profile and just slink out of town. Good riddance.

If nothing else, it will be great to have a President who can stand up and make a speech like the one President-elect Obama made last night in Chicago. It was genuinely inspiring, and I think we’re going to need lots of inspiration in the coming years. At least we won’t have to cringe with embarrassment every time our nation’s leader opens his mouth to speak. No one will “misunderestimate” Obama.

At the risk of being schmaltzy, this really only could happen in America and I feel a lot of pride in my country this morning for showing the world we have not forgotten our ideals.

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Kaz wins the “prize of marginal value” with the closest guess to Obama’s Electoral College total of 338. Kaz had the highest guess in the pack at 344. rsb was second at 319. jb was last, guessing McCain with 275. I’ll report later this week on the prize once I figure out what it is.

It feels like...

...the whole world is holding its collective breath today.

The worst person in the world

I should have called this post “Ben Aflac is actually a really good actor.” His Keith Olbermann take off last night on SNL was brilliant – revealing him as the pompous, self-righteous, tool that he is. I saw Olbermann walking down 49th Street, near the GE Building, recently, and had to restrain myself from greeting him with a hearty “hello douche bag” as we passed, which was my strong inclination.

I’m happy to report that he looks much worse in person than on TV. He’s kind of short, at least compared to what I had expected, and really soft looking. He has one of those gushy, wide rear ends. In fact he looked really soft all over -- what my high school football coaches used to call “a real cake-eater.” Plus, he was wearing his studio makeup – lipstick, rouge, the whole schmegeggie. (Or maybe I’m giving him too much credit – maybe it was his everyday street makeup.) In any event it made the whole package truly frightening.

Speaking of SNL, I thought John McCain was funny and personable; everything he hasn’t been on the campaign trail. But did anyone else detect a hint of surrender in the opening bit? I was surprised McCain went along with the part where Tina Fey did her little aside, pitching the “Palin 2012” tee-shirts. It seemed a little too close to the reality of the situation to me. I would have thought he have balked at including it.

[Happy Birthday Charly!]