No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for posts by Shoebox.

December 11, 2008

The Bill Of The Living Dead

by @ 5:40. Filed under Economy, Politics - National.

By a vote of 237 to 170, the House of Representatives passed the Auto bail out bill this evening.

The Auto bill is being sold as funding to ensure that Detroit can survivef the recession and restructure their businesses so that they are leaner and better competitors once the restructuring is complete.  

After reading the bill, I’ve come to the conclusion that the bill will not allow for the survival of the Detroit automakers.   Rather, the bill is a disguised suicide pact.

You’ve probably heard about most of the provisions in the bill:   There will be an auto czar who will have significant influence over the indebted auto manufacturers, all private airplanes must go, salaries and bonuses have been capped, the Government will get stock warrants for 20% of the company.   What you may not have heard about is the process that the Auto Czar will use to determine who gets loans and how much they get.

The process of doling out “loans” is two fold.   The three auto makers will go to the Czar for bridge loans.   These loans are intended to keep the manufacturers solvent while they work on their “Restructuring Plan.”   According to the legislation, the Czar must consider the following criteria, in the order presented, when determining who gets how much:

SEC. 9. ALLOCATION.

PRIORITIZING ALLOCATION
The President’s designee shall prioritize allocation of the provision of financial assistance under this Act to any eligible automobile manufacturer, based on

(1) the necessity of the financial assistance for the continued operation of the eligible automobile manufacturer;
(2) the potential impact of the failure of the eligible automobile manufacturer on the United States economy; and
(3) the ability to utilize the financial assistance optimally to satisfy the operational and long-term restructuring requirements of the eligible automobile manufacturer.

That seems reasonable.   If we’re really working to have the companies survive and be able to repay the loans we would want to put their financial viability as a first priority.

After the companies are approved for the bridge loan, they are given until March 31, 2009 to put detail to the plans they presented to Congress and produce a “Restructuring Plan.”   The “Restructuring Plan” is the plan they will execute, and that the Czar will hold them to, until they have paid their loans back to the Government.   Based on this plan, the Czar will make determinations about any additional money that the auto company may receive.

The Auto Czar is supposed to use the same criteria, as noted above, to evaluate the “Restructuring Plan.”   However, the legislation provides for a different priority to consider and weight the three criteria:

(c) ORDER OF PRIORITY; SECTION 7."”For purposes of allocating financial assistance for restructuring pursuant to section 7, the President’s designee shall prioritize the considerations set forth in subsection (a) in the following order: paragraph (3), paragraph (2), and paragraph (1).

Well gee, that’s kind of odd.   Rather than focusing on the financial viability of the company, the long term plan is to be evaluated based upon:

the ability to utilize the financial assistance optimally to satisfy the operational and long-term restructuring requirements of the eligible automobile manufacturer.

What do you suppose that means?

Along with the list of provisions that I gave you early in this post, are a couple of others that you’ve likely heard in passing:   If the automaker does not comply with the federal fuel efficiency standards, they can have their loan called, to commence domestic manufacturing of advanced technology vehicles (read that as non fossil fuel vehicles) and do an analysis of how to take excess manufacturing capacity and use it to make mass transit vehicles.

Once the automakers sign up for this loan the government can change the federal fuel standards to anything they want and force to automakers to make the goal. Once the automakers sign up for this loan they have to make non fossil fuel vehicles. Once the automakers sign up for this loan they will be expected to provide manufacturing for mass transit vehicles. All of this will be required or expected of the automakers with the threat of loan recalls if they balk or miss on any of it. All of this will be required or expected without regard to the market or the financial viability of the requirements.

While it’s not surprising that this legislation included “green” requirements, you may find it surprising that the priority for green was placed above all other considerations, including financial viability. Well, you would have been surprised had this happened a couple of years ago before the nation started its rapid and determined race to nationalization of industries and socialism. Now it seems hard to find any sense of fiscal sanity with in any action coming from inside the Washington beltway.

The Auto Industry Financing and Restructuring Act is not an act to bring the auto industry back to health. Rather, it is an act that will create three industrial zombies. Like Zombies, they will be a shell of the real thing. They will be soul less and act in ways that are inexplicable except to their masters.  Their masters will care nothing for the well being of the zombies and are only interested in them to accomplish the master’s goals.

It’s obvious to see why the automakers want the bailout; they see it as they only way to survive. I wonder if they would make the same choice if they understood that they are about to become the new stars in The Night of the Living Dead?

December 10, 2008

Be Careful the Fights You Pick

by @ 9:27. Filed under Miscellaneous.

Saw this interesting articleabout the Chicago Tribune’s cooperation with FBI regarding the reporting of the Blagojevich investigation.     According to the Tribune, the FBI requested and on numerous occasions the Tribune complied with not reporting all of the information the Tribune had uncovered.  

To say that this is unusual is a bit of an understatement.   Even the Tribune says:

“It’s very important for news organizations to remain independent from law enforcement. Independence is the key to journalistic integrity. When you enter into agreements or partnerships, you find your independence compromised,” said Kelly McBride, media ethicist at the Poynter Institute in St. Petersburg, Fla. “If we are too cozy with law enforcement, we will have no credibility when we question law enforcement, in the eyes of the public.”

Fiztgerald was equally impressed by the unique support from the Tribune:

We thought we’d never have the opportunity to install the bug or place the telephone tap and we made an urgent request for the Tribune not to publish that story,” Fitzgerald said. “That is a very rare thing for us to do and it’s an even rarer thing for a newspaper to grant.

When you think about Press involvement with government secrets you don’t tend to think of it in a supportive, positive relationship (Think NY Times).   Do you think the Tribune’s unusual support was for a unique sense of morality or patriotism?   Or, perhaps, do you think it could be because of this:

 

Count Two

Sections 666(a)(1)(B) and 2.

 

Beginning no later than November 2008 to the present, in Cook County, in the Northern District of Illinois, defendants ROD R. BLAGOJEVICH and JOHN HARRIS, being agents of the State of Illinois, a State government which during a one-year period, beginning January 1, 2008 and continuing to the present, received federal benefits in excess of $10,000, corruptly solicited and demanded a thing of value, namely, the firing of certain Chicago Tribune editorial members responsible for widely-circulated editorials critical of ROD R. BLAGOJEVICH, intending to be influenced and rewarded in connection with business and transactions of the State of Illinois involving a thing of value of $5,000 or more, namely, the provision of millions of dollars in financial assistance by the State of Illinois, including through the Illinois Finance Authority, an agency of the State of Illinois, to the Tribune Company involving the Wrigley Field baseball stadium; in violation of Title 18, United States Code,

I used to manage the media relations area for a company I worked for. It was a constant struggle to keep from storming down to one of the newspapers whenever I saw a negative story about my company or industry. Fortunately, I never did. Early on in my role I was given sage advice,

“Don’t start fights with people who buy ink by the barrel!”

I’m guessing that’s advice that Blagojevich never received!

Call It A Trial Run

by @ 5:15. Filed under Economy, Politics - National.

Most news agencies are reporting that an agreement has been reached between the Democrat Congressional leaders and the White House, to provide the $15 billion in Federal funding, bail out, bridge loan….pick your favorite euphemism.   The agreement calls for the creation of a Car Czar who will

have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalled.

While Nancy Pelosi may want to see House Republicans sign on to the bail out just to provide the appearance of her greater bipartisanship, there’s no doubt that the Democrats will pass the bill now that they don’t have to worry about the implications of impending elections.

On the Senate side, the outcome of a vote on the package is far from certain.   There are reports of dissatisfaction within the Senate Republican ranks.   The question will be whether, while they still have 49 seats, the Republicans can hold together 41 votes and keep the bill from a vote.

In just a few weeks Barack Obama will be sworn in as President.   Despite what some are calling “centrist” cabinet selections, there is no doubt that Obama’s views are far to the left of the American public.   Couple him with Nancy Pelosi and her faux bipartisanship in the House and you are 2/3rds of the way to passing nearly any legislation that Obama or Pelosi may dream up.   The only place where Republicans have a chance to influence policy for the next two years will be in the Senate.

In January the Republicans will be pared down to 42 or possibly 41 Senate seats.   Included in that number will be Senators Snowe, Collins, Specter and of course the ever enigmatic McCain.   It has been much debated whether the Republicans will be able to hold together to create any amount of resistance to the Democrat agenda.

61% of Americans are unwilling to provide a bail out for the auto industry. That coupled with Republicans now lip syncing that they want to be the party of smaller government (again), seems like the perfect opportunity, while we still have the 49 vote training wheels on, to see if we can hold the caucus together and flex some minority muscle. If they can, well, maybe there is some hope. If they can’t, buckle up, it’s going to be a long couple of years.

I think you can consider the Senate vote on the auto bill a trial run for what we will see at least until 2010.

Hmmmmmm

by @ 5:01. Filed under Law and order, Politics - National.

Alright, I heard when US Attorney Patrick Fitzgerald said that the criminal complaint  against Blagojevich didn’t involve President-elect Obama.  

I’ve now read the entire complaint and in 17 separate phone calls or conversations, the complaint documents Blagojevich and others discussing how to extract something for Blagojevich in return for his selection of the President-elect’s preferred person to replace him in the Senate.

That leaves me thinking that either Blagojevich and those around him are the most delusional people on the face on the earth or they were receiving feedback along the way.   At this point I’m not suggesting that Obama was involved but if Blagojevich was getting feedback, someone was giving it to him.   I think this investigation has the potential to make the Scooter LIbby situation look like first year law school stuff.

This could be fun.

December 9, 2008

…..Two Bits

by @ 5:42. Filed under Economy, Politics - National, Taxes.

Barack Obama was on Meet The Press with Tom Brokaw this weekend.   Obama provided the following perspective on the auto bail out during the interview:

MR. BROKAW:   …should the current management be allowed to stay in their jobs?

PRES.-ELECT OBAMA:   Here’s what I’ll, I’ll say, that it may not be the same for all the, all the companies, but what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now.   I think, in fairness, you have seen some progress made incrementally in many of these companies.   You know, they have been building better cars now than they were 10 or 15 or 20 years ago.   They are making some investments in the kind of green technologies and, and the new batteries that would allow us to create plug-in hybrids.   What we haven’t seen is a sense of urgency and the willingness to make tough decisions.   And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors who are doing a lot better.

Now, it’s not unique to the auto industry.   We have seen that across the board.   Certainly, we saw it on Wall Street.   And part of what I’m hoping to introduce as the next president is a new ethic of responsibility where we say that, if you’re laying off workers, the least you can do, when you’re making $25 million a year, is give up some of your compensation and some of your bonuses.   Figure out ways in which workers maybe have to take a haircut, but they can still keep their jobs, they can still keep their health care and they can still stay in their homes.   That kind of notion of shared benefits and burdens is something that I think has been lost for too long, and it’s something that I’d like to see restored. (Emphasis mine)

Today, Nancy Pelosi echoed the meme  of “shared sacrifice:”

Pelosi said that everyone involved in the U.S. auto industry, including management, labor unions, parts suppliers, investors and dealers, would have to make a sacrifice to ensure the continuing viability of the industry.

“We call this a barber shop: everyone’s getting a hair cut,” said Pelosi, speaking at a press conference in the U.S. Capitol.

According to these Democrat leaders, the threshold for determining when a sharing of sacrifice should occur is when you are leader who has been fiscally irresponsible with your charge.   You should share even more if your irresponsibility requires the American taxpayer to bail you out.

Hey wait!

Hasn’t Congress been irresponsible with their financial responsibilities?

  • Leaving Fannie and Freddie unchecked and unsupervised.
  • Ignoring the risk of leverage on exotic financial instruments and leaving them completely unregulated or over seen.
  • Constricting energy exploration which resulted in a 24 month hyper price speculation.
  • Giving Hank Paulson nearly completely unchecked ability to spend $700 billion entirely on his whim.
  • Adding over $100 billion of pork to the TARP bill….just because.

And who is now bailing out Congress’ financial irresponsibility?   That’s right, you and me, the American taxpayers.

If sharing the pain is what Pelosi and Obama think should happen to leaders who rely on the American taxpayers for a bailout,  Democrat and Republican Congress people alike,  ought to be answering the door and the American taxpayer ought to be knocking….

Shave and a haircut, two bits!

 

A Bridge To Nowhere

by @ 5:39. Filed under Business, Economy, Politics - National.

It appears that there may be an agreement to bail out the auto industry is close to fruition.   Being discussed is providing a $15 billion loan to the three US auto makers.

The term “Bail out” has gotten an increasingly negative response from the American public.   It probably has something to do with the fact that Hank Paulson threatened and then lied to the American public and seems unsure of how to spend the rest of his piggy bank; “To buy mortgages or not to buy mortgages, that is the question.”   As a result, Congress has come up with a new term to describe their steps toward socializing our economy, “Bridge Loan.”

In normal finance and banking arrangements, a “Bridge Loan” is just what it sounds like; it is a loan for a limited period of time.   Bridge loans are often provided during the riskier parts of a project for example during the construction process, when  collateralization is difficult and day to day value of the asset is difficult to determine.    For this reason, providers of bridge loans generally have tight controls over what they are financing and often  require that there is assurance of permanent financing for the completed process before they offer the interim financing.   In other words,  Bridge Loan providers  generally know exactly what the plan is, and how it will be executed, before a bridge loan is provided.    

Leave it to Congress to turn normal business terms on their head!   With their “Bridge Loan” Congress has no idea what they have or where they are going to with their “project.”   They are loaning money to enterprises who have no reliable plan that allows them to pay it back.

Of course “not knowing where they are going” doesn’t stop Congress from making demands along the way.   Rather than ensuring a reorganization of the automakers that would focus on developing a profitable business, Congress is focused on enforcing their “Green Dream” on the industry and thereby ensuring that the money lent to them will never be repaid.

Barney Frank had a moment of candor regarding the farcity of calling the $15 billion a “bridge Loan”:

“We don’t think the $15 billion is enough to get them into March, but given the administration’s insistence "¦ that’s where we are now,” Frank said.

Frank said that in the new Congress, which will have stronger Democratic majorities and a friendlier White House, the funds taken from the energy loans this year to prop up the ailing industry would be restored.

“Once we get a new administration we will replenish that money,” he said. “We will not see a diminution of funding available for energy efficiency.

“The reason for that is that then you get the new administration "” the Obama administration "” able to take it up from there and make the longer-range projections,” he added.

Yup, a new administration with longer-range projections with even greater demands for greenery and even less concern about financial viability.   It seems like the only bridges that Congress is able to finance are bridges to no where.

December 8, 2008

…Worse Than The Disease?

by @ 5:29. Filed under Global "Warming".

According to the UK Independent, we no longer have to fear global warming….we’ve found a solution!   All we have to do is 1. Grow a bunch of trees, 2. burn them without releasing the CO2 they’ve absorbed, 3.   Burn them without using more energy than they create in the burning process and 4.   Bury the ashes in the soil.

Sounds simple; well, except that whole burning them without releasing the C02 and not using more energy than they create part!   But, hey, let’s not be negative.   After all, as Big G points out regularly to me, no one thought we could go to the moon but we did!   It does sound simple except for a minor detail.   In order to do this, we would need to grow and burn forests that are the equivalent of 2.5% of our productive land.

2.5%, doesn’t sound like much does it?

The World has approximately 33 Million sq. Mi. of productive land.   2.5 % of that would be approximately 835,600 sq. miles that would be needed for our carbon tree farm.   So far so good.

I think it’s safe to assume that planing our Carbon tree farm willy nilly around the world isn’t what these folks have in mind.   I think it would be safe to assume that they would determine that the tree farms should be where the carbon dioxide is.   After all, you’ll want to soak it up right after it gets produced so that the carbon dioxide doesn’t get a chance to further warm the world right?

According to this chart by the World Bank, the US, Saudi Arabia, Canada and Australia have the highest carbon dioxide per capita.   It would seem to make sense to plant the bulk of the trees in those countries.

The US has about 1.5 million sq. mi. of productive land, Canada has a little over 100,000 sq. mi. and Australia has about 138,000 sq. mi.   That’s a total of about 1.74 million sq. Mi. of productive land in the most offensive (carbon dioxide wise) countries.   If I take it one step further, of the US’ productive land, only 58% of it is in crop or forest land.   I suspect a similar number would be found in Canada and Australia, the balance of the land is pasture.

The reason that I raise the US, Canada and Australia is that with their productive lands account for over 70% of the world’s wheat exports, over 60% of the world’s corn exports and even 13% of the world’s rice exports.

Remember what was happening to the price of corn this past spring as energy prices were rising and the US was forcing more production into creation of ethanol?   Just to remind you, corn went from a recent average of less than $3/bushel to nearly $8 bushel.   Do your remember the stories about how the increased price of corn was increasing the cost of tortillas in Mexico?     Do you remember how the increased price of corn was being blamed for people starving in developing countries?

The additional corn production required to make our expected ethanol mandate this year amounted to less than .75% of our total productive acres.   Only .75% yet, it over doubled our price of corn.   The Carbon Tree Farms are expected to need 2.5% of all our productive acres.

Does anyone else see a problem?

December 5, 2008

Force Majeure Run Amok

by @ 10:50. Filed under Miscellaneous.

Force Majeure is a French phrase meaning “greater force.”   It is also a legal phrase used in many contracts.  

The “Force Majeure clause” is typically used in contracts that require the contracting parties to act over a period of time.   The clause generally says that the contracting parties are freed of the contracts obligations if an extraordinary and unforeseeable event occurs that prevents them from fulfilling their contractual duties.   Typical “extraordinary and unforeseeable” events that are called out in these clauses are riots, war, severe climatic event such as an earthquake, volcano etc.

I’ve been in business for more than a quarter of a century (doesn’t that sound like a long time?) and have been party to hundreds of business contracts that have had a Force Majeure clause.   I can’t remember one time that a Force Majeure event has been claimed in any of those contracts.   I’m not suggesting that Force Majeure never comes into play, it certainly does.   What I’m suggesting is that it’s a rare event when it does get invoked.

Donald Trump is building the Trump International Hotel and Tower in Chicago, which is to be the second-tallest building in that city (after the Sears Tower).     The NY Times chronicles Trumps problems with the project as the real estate market has become recently challenged (you may have read about that.)  

Trump has a personal guarantee of $40 million on his project and he’s not happy about having to pony up on that guarantee.   In an attempt to save himself $40 million and perhaps to save his project, Trump is suing his lender Deutsche Bank.   His suit claims that the current economic conditions allow him to invoke the Force Majeure clause of his contract.   Trump’s reasoning?

"Would you consider the biggest depression we have had in this country since 1929 to be such an event? I would," he said in an interview. "A depression is not within the control of the borrower."

Oh man, where do I go from here?

I could go down the path of the automobile industry executives claiming Force Majeure has caused them to be in their current financial distress.   That Force Majeure has them standing in Washington with their hands out.   That Force Majeure is why they think we should agree with Nancy Pelosi that “bankruptcy is not an option!”   Yeah, I could go there….

I could go down the path that Hank Paulson appears to agree with Trump that the economic situation is a Force Majeure.   Why else would Paulson have asked for extraordinary and unforeseeable powers except to address a situation that was extraordinary and unforeseeable?   Of course what Paulson doesn’t seem to understand is that his extraordinary and unforeseeable measures are likely to have as extraordinary and unforeseeable circumstances.   Do you get the feeling at all that Paulson is just running to one side of a teeter-totter only to find that the other side just shot into the air?   He corrects this by running to the other side of the teeter-totter and the side he used to be standing on shoots into the air.   Yeah, I could go there…

I could go down the path that Nancy, Harry, Barry and the rest of the Dems also agree with “The Don.”   It’s really the only explanation for why they would want to throw another $700 billion of claimed “stimulus” into the economy when their first pass at it did bupkus.   Yeah, I could go there…

No, I don’t think any of those are the directions to go with this.   Not because they aren’t real but because they are all symptoms of the real issue.   “The Don” has hit upon a nugget of truth in his lawsuit.

Watching the “Bail out-o-mania” and the “I’m voting for Barack because he’ll pay my gas bill and my mortgage,” it strikes me that a significant portion of Americans believe that their entire lives  have become  subject to Force Majeure:

  • I can’t pay my mortgage – It wasn’t possible to forsee that I wasn’t really qualified to pay this loan
  • Abortion under any circumstances – It wasn’t possible to foresee the consequence of last night’s actions
  • Trophies for all – It wasn’t possible to forsee a winner and a loser as an outcome of the contest.

Force Majeure is commonly referred to as “Acts of God.”   Isn’t it ironic that so many people who don’t act as if they want God in their daily lives are now claiming “Acts of God” as the reason they are having the problems that they have?

December 4, 2008

A Silver Lining?

by @ 5:58. Filed under Economy, Immigration.

With the recession officially called, there may be a silver lining to the economic challenges that seem to appear around every corner; illegal immigrants are returning home.

McClatchy writes the article about an illegal who is contemplating moving back to Mexico for better economic prospects.

McClatchy gets the news aspect correct with their headline:

With economy souring, illegal immigrants going home

But that’s where the news ends and the editorial disguised as news begins.   McClatchy begins their lament with:

But the U.S. economic crisis has disrupted his life and the lives of countless other illegal immigrants who are now planning to leave or have already left.

Sure the economy is causing folks to adjust but didn’t the illegals  disrupt their lives when they chose to illegally move into the US?

Oh, but it’s not just the people in the US that are hurting.   The US slow down is also hurting the economy of entire towns in other nations:

The ripple effects are already being felt. Communities in Latin America and the Caribbean report a reduction in remittances — money sent home from the United States. That money is critical to the survival of families and the success of local civic projects. Border communities that once thrived as way stations for those heading north are now little more than ghost towns.

Is the Governor’s conference still going?   Perhaps the mayors of these border community ghost towns can get in line with California, Michigan and others and get a piece of a federal bailout to allow them to survive the down turn?   Maybe Hank Paulson has a bailout plan for the Latin American house payments that will now go unpaid?

Rasmussen Reports issued a polltoday on America’s sentiment of illegal border crossings.   74% of those polled still believe that the US government isn’t doing enough to secure our borders.   Interestingly, less than half of those polled now believe that there is no way to end illegal immigration.   That’s a shift of 7% in just 6 weeks.

I’d really prefer the economy back to where it was in mid 2007.   That said, how many months of consumer malaise would it take to solve a our illegal immigration problem?   Well, we ought to at least ask!

December 3, 2008

Oh Good Lord!

by @ 16:47. Filed under Elections, Politics - Minnesota, Vote Fraud.

Another Twin City precinct found another problem with their count of Senate ballots on election day.   According to this article, Minneaplis has come up 133 ballots short in their recount, of the ballots that they recorded on election night.   The Election Director came up with another lame excuse for how that “could” have happened and said she would verify the new numbers with Secretary of State. The reduction of the 133 ballots provided Coleman with a net pick up of 44 votes (apparently Franken had a 44 vote advantage in the 133 nonexistent ballots).

Minnesota has consistently been in the top 5 states of highschool graduation rates.   It is similarly rated for college graduates.   Apparently none of the folks in these “oops precincts” have  accplished either of those mile stones.

Congratulations Senator Chambliss!

by @ 5:44. Filed under Elections, Politics - National.

Senator Chambliss has been called as the winner of the runoff election in Georgia.   This will give the Republicans at least 41 votes, on paper, in the Senate.

While the vote totals appear to be substantially lower than the general election, they still managed to get about 55% of the folks to return for a second time.   55% is a pretty good overall return rate for a runoff.   However, the two candidates fared very differently compared to the average.

I’m working off of numbers from the Secretary of State as of about 10 PM.   At that time, Chambliss had about 64% of the general election total while Martin only received about 50% of his general election total.   95% of the precincts had reported in those numbers.   If this difference holds, and I suspect it will generally based on the precincts left to report, I’ve got the following questions questions:

  • 93% of blacks voted for Martin when Obama was on the ballot.   They accounted for 56% of Martin’s vote total.   Did they come out and support an older white man when there wasn’t a black candidate on the ballot?
  • With the Democrats within reach of the magic 60 number in the Senate, how many folks switched from Martin to Chambliss?
  • Chambliss and Martin split the 29 and under group in the general election.   It will be interesting to see whether that group was able to show up a second time this year.
  • Sarah Palin made several campaign appearances for Chambliss.   By all accounts the events were very well attended.   How much, or was she a factor in generating turn out for Chambliss?
  • Do you remember how the MSM was carrying on about how the special elections for Mississippi and Illinois told us that conservatism was dead rather than the fact that Republicans know how to run crappy candidates.   Will the MSM be running stories about how Obama has lost his coat tails?

This and more I’d like to see.   I haven’t found any exit polls yet.   When I do, you’ll be the first to know!

RIP NBC

by @ 5:40. Filed under Presstitute Follies.

Tim Russert had been the most of Meet The Press for 17 years until his untimely death in June.   While strongly aligned with the Democratic party, Russert aggressively questioned Democrats and Republicans alike.   He did his job so well that if you didn’t know about his previous work for Senator Moynihan and Governor Coumo, you would never have known his political leanings.   Russert had a reputation as having the toughest interview regardless of your party affiliation.

Apparently six months is what the GE management handbook says is the official mourning time for the last person in your employ who was able to exhibit any level of professional integrity.

Based on reports by AP and others, David Gregory will be announced as the permanent host of “Meet the Press.”   Yes, THAT David Gregory!

The David Gregory who made this appearance on Imus:

And the David Gregory who provided this professional insight when Helen Thomas asked him why politics had become so polarized:

While NBC has been in an integrity coma since Russert’s death, there was hope of a reawakening or at least a stabilization, with a permanent host who would not replicate Russert’s style but honor his intellectual drive. If Gregory is named the permanent host, how long before the plug gets pulled?

December 2, 2008

We’re #1!

by @ 5:30. Filed under Economy, Taxes.

One of Barack Obama’s primary campaign positions was that he was going to realign income taxes so that the “rich” didn’t get by without paying their fair share.   In an October, 2007 Democrat debate, Barack Obama said:

There has to be a restoration of balance in our tax code. We are going to offset some of the payroll taxes that families who are making less than $50,000 a year get a larger break. I want to make sure that seniors making less than $50,000, that they get some relief in terms of the taxes on their Social Security. Those kinds of progressive tax steps, while closing loopholes and rolling back the Bush tax cuts to the top 1 percent, simply restores some fairness and a sense that we’re all in this together.

“Fairness” – did anyone ever bother to ask Obama  what he was  basing his fairness on?

Throughout the campaign it appeared clear that Obama felt the United States was too independent.   He made clear that he had a vision for the US that looked more like the rest of the world, especially Europe.  

OK, let’s use the rest of the world as our “fairness” test for progressive taxes.   Typically when one thinks progressive taxes, one thinks of Canada, England and Europe in general.   The assumption is that the more socialism a country has the more “soaking of the rich” occurs to support those government programs.

I found an interesting analysis today.   The Organisation for Economic Co-Operation and Development (OECD) did an analysis of the progressive nature of taxes in their 24 member countries.   Member countries include most of Europe, Canada, Japan, Australia, Korea and Mexico.   The analysis looked the top 10% of households in each country and determined the amount of the country’s income that was reflected in those households and the % of income taxes that those same households paid.  

It turns out that while the top 10% of US households have a bit more (but not the highest concentration) of income, 33% compared to the OECD average of 28%, those same households pay 45% of their income in taxes compared to the OECD average of 32%.  

OK, given all the countries involved, maybe a comparison to the entire OECD is “fair,” let’s look at a peer.   The UK has 32% of its income in the top 10% households (1% less than the US) yet only takes 39% of it in taxes compared to the US’s 45%!   To add insult to injury on this analysis is that included in “taxes” is Social Security type taxes which at higher incomes, is actually regressive because it caps out.

It turns out that the US collects more income taxes from the top 10% of income earners than any other country!   The US comes in second to Ireland for most progressive income tax system.  

I’m all for making the US #1. Productivity, average income, philanthropic activity are all good  statistics to be #1.   However, being #1 in the world in taxing  our most successful, especially when we’re already #1before the expiration of the “Bush tax cuts” or any imposition of “fairness” by the Obama administration, is not something we should be proud of.

December 1, 2008

A Secret Button

by @ 5:31. Filed under Miscellaneous.

Disney is ruining the world!

So claims Christopher Jamison, the Abbot of Worth in West Sussex in this article in the UK Telegraph.

Abbot Jamison blames Disney for what he considers to be excess consumerism in the world and its denigration of spirituality:

“This is basically the commercial exploitation of spirituality,” he says, adding that as a result Disney and other corporations “inhabit our imagination”.

“Once planted there they can make us endlessly greedy. And that is exactly what they are doing.”

OK, disclosures first.   Mrs. Shoebox, Thing 1, Thing 2 and I are big Disney fans.   Why?   Well, a couple of things.  

First, the Disney brand (I’m not including Buena Vista and some of their other brands) is one of the few brands where we can be assured that “family entertainment” is actually family entertainment.   Yes, you may get the occasional “save the earth” theme but you won’t get swearing or sexually explicit subject manner hidden in the film.

Second, we’ve had the privilege of seeing numerous amusement parks.   “It’s not Disney,” is the phrase you hear from us in almost every park that isn’t, well, Disney.   Disney is creative on a level that is not matched by any other amusement park.   Their parks are clean beyond belief.   They manage to achieve in all of their “cast members” a service level that no other park comes close to.   Finally, there are no roaming gangs of unsupervised and ill behaved young people at Disney, Disney is for families.

Abbot Jamison claims:

“This is the new pilgrimage that children desire, a rite of passage into the meaning of life according to Disney.”

Well, no, not exactly.   I remember as a shoelet watching the Wonderful World of Disney.   I remember wanting to see “the most magical place on earth” more than anything else I could imagine.   Of course, growing up in the Midwest, that expedition didn’t come easily.   When I was 12 my parents, who were middle income at best, packed us up and took us by car, on a 2 week trip that included a couple of days at Disneyland.   My point is that it isn’t just recently that Disney has been a phenomena, it’s been an icon since the mid 60’s and parents for the past 40 years have managed to deal with it.

I won’t argue with Abbot Jamison that our culture has become more materalistic.   However, rather than directing it, Disney has recognized it and is marketing to it……just like any other marketer who finds what customers want and tailors their message to fit the desire!

As I’ve told you before, I spent about 20 years in the cell phone business.   From time to time when I was in the business, and even today, I would hear people talk about how annoying cell phones were.   How the cell phones would ring at inopportune times and they would “have” to take a call.   I explained to them then, as I do today, that all cell phones have been designed with a secret button that controls those undesired calls; it’s the OFF button.

Just like with cell phones, materialism can be managed.   Helping your children understand the difference between a “need” and a “want” is part of the responsibility of being a parent.   If you don’t do this, there is no doubt that materialism and consumerism will run rampant in your household and your children.   Unfortunately for too many children, they don’t get training on “needs” versus “wants” because their parents have never established the difference in their own lives.

There is no doubt that there are many ills that impact our society.   What I find disappointing in this and other pieces I’ve read written by Abbot Jamison, is that he appears to spend his time focused on symptoms rather than the root.  

As we enter this Advent season, it’s appropriate to remember that our moral code comes from God who created us.   This is the same God who sent His Son to be our atonement and our salvation.   He did this even though many still don’t “want” His salvation but “need” it.

Blaming the likes of Disney for materialism is like blaming excess consumer credit on the credit card companies.   Do both of them promote their products? Absolutely!   Do they work to gain the highest market share possible?   Again, absolutely!   However, in both cases, we as individuals control the secret button to control the offers; we can say no.

November 27, 2008

Happy Thanksgiving!

by @ 5:52. Filed under Miscellaneous.

There is nothing better in remembering Thanksgiving than to hear Rush Limbaugh give the real story of the first Thanksgiving.

Thank you, readers, for your time and your indulgence as you read through my “oh, so not important” missives.   Your comments are always appreciated!

Without further ado, Rush Limbaugh:

Anyway, leads me to the real story of Thanksgiving as written by me in my book “See, I Told You So!” We’re on Chapter Six here: “Dead White Guys or What Your History Books Never Told You,” page 70.

On August 1, 1620, the Mayflower set sail. It carried a total of 102 passengers, including forty Pilgrims led by William Bradford. On the journey, Bradford set up an agreement, a contract, that established just and equal laws for all members of the new community, irrespective of their religious beliefs.

Where did the revolutionary ideas expressed in the Mayflower Compact come from? From the Bible. The Pilgrims were a people completely steeped in the lessons of the Old and New Testaments. They looked to the ancient Israelites for their example. And, because of the biblical precedents set forth in Scripture, they never doubted that their experiment would work.

“But this was no pleasure cruise, friends. The journey to the New World was a long and arduous one. And when the Pilgrims landed in New England in November, they found, according to Bradford’s detailed journal, a cold, barren, desolate wilderness,” destined to become the home of the Kennedy family. “There were no friends to greet them, he wrote. There were no houses to shelter them. There were no inns where they could refresh themselves. And the sacrifice they had made for freedom was just beginning.

During the first winter, half the Pilgrims – including Bradford’s own wife – died of either starvation, sickness or exposure.

“When spring finally came, Indians taught the settlers how to plant corn, fish for cod and skin beavers for coats.” Yes, it was Indians that taught the white man how to skin beasts. “Life improved for the Pilgrims, but they did not yet prosper! This is important to understand because this is where modern American history lessons often end. “Thanksgiving is actually explained in some textbooks as a holiday for which the Pilgrims gave thanks to the Indians for saving their lives, rather than as a devout expression of gratitude grounded in the tradition of both the Old and New Testaments.

Here is the part [of Thanksgiving] that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors in London called for everything they produced to go into a common store, and each member of the community was entitled to one common share.

“All of the land they cleared and the houses they built belong to the community as well. They were going to distribute it equally. All of the land they cleared and the houses they built belonged to the community as well. Nobody owned anything. They just had a share in it. It was a commune, folks. It was the forerunner to the communes we saw in the ’60s and ’70s out in California – and it was complete with organic vegetables, by the way.

Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives.

He decided to take bold action. Bradford assigned a plot of land to each family to work and manage, thus turning loose the power of the marketplace.

“That’s right. Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened?

It didn’t work! Surprise, surprise, huh?

What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation!

But while most of the rest of the world has been experimenting with socialism for well over a hundred years – trying to refine it, perfect it, and re-invent it – the Pilgrims decided early on to scrap it permanently.

What Bradford wrote about this social experiment should be in every schoolchild’s history lesson. If it were, we might prevent much needless suffering in the future.

“‘The experience that we had in this common course and condition, tried sundry years…that by taking away property, and bringing community into a common wealth, would make them happy and flourishing – as if they were wiser than God,’ Bradford wrote. ‘For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense…that was thought injustice.’

Why should you work for other people when you can’t work for yourself? What’s the point?

“Do you hear what he was saying, ladies and gentlemen? The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford’s community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property.

Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result?

‘This had very good success,’ wrote Bradford, ‘for it made all hands industrious, so as much more corn was planted than otherwise would have been.’

Bradford doesn’t sound like much of a… liberal Democrat, “does he? Is it possible that supply-side economics could have existed before the 1980s? Yes.

“Read the story of Joseph and Pharaoh in Genesis 41. Following Joseph’s suggestion (Gen 41:34), Pharaoh reduced the tax on Egyptians to 20% during the ‘seven years of plenty’ and the ‘Earth brought forth in heaps.’ (Gen. 41:47)

In no time, the Pilgrims found they had more food than they could eat themselves…. So they set up trading posts and exchanged goods with the Indians. The profits allowed them to pay off their debts to the merchants in London.

And the success and prosperity of the Plymouth settlement attracted more Europeans and began what came to be known as the ‘Great Puritan Migration.'”

Now, other than on this program every year, have you heard this story before? Is this lesson being taught to your kids today — and if it isn’t, why not? Can you think of a more important lesson one could derive from the pilgrim experience?

So in essence there was, thanks to the Indians, because they taught us how to skin beavers and how to plant corn when we arrived, but the real Thanksgiving was thanking the Lord for guidance and plenty — and once they reformed their system and got rid of the communal bottle and started what was essentially free market capitalism, they produced more than they could possibly consume, and they invited the Indians to dinner, and voila, we got Thanksgiving, and that’s what it was: inviting the Indians to dinner and giving thanks for all the plenty is the true story of Thanksgiving.

The last two-thirds of this story simply are not told.

Now, I was just talking about the plenty of this country and how I’m awed by it. You can go to places where there are famines, and we usually get the story, “Well, look it, there are deserts, well, look it, Africa, I mean there’s no water and nothing but sand and so forth.”

It’s not the answer, folks. Those people don’t have a prayer because they have no incentive. They live under tyrannical dictatorships and governments.

The problem with the world is not too few resources. The problem with the world is an insufficient distribution of capitalism.

November 26, 2008

Lather, Rinse, Repeat

by @ 5:27. Filed under Miscellaneous.

Another day, another round of bail outs.

In today’s episode, Hank Paulson told us that he was now going to back stop $200 billion of consumer loans.   He also said he was going to buy $600 billion of home loans from Freddie and Fannie.

At least this time Paulson is doing what he said.   He told us 2 weeks ago that he was going to buy consumer credit.   He also told us he was steering clear of “toxic” mortgages which he appears to be doing.

With Paulson doing his best imitation of “The Breck Girl,” doing his bailout version of “Lather, Rinse, Repeat” on at least a weekly basis, the question arises; “How long can we keep up the bail out express?”

Interestingly, McClatchy took up that exact topic today. After asking, “Can Government keep Spending?” They answered with, “Most Economists Say Yes.”

Now, I’m not the smartest guy but I have managed to keep my family fed.   How can economists not think that the spending and borrowing palooza isn’t a problem?   After reading a couple of the questions and answers from McClatchy, you’ll be a believer too….or not

Q: First of all, where does the money come from?

A: The bulk of the cash has been put up by lenders buying U.S. Treasury Department securities such as bonds, notes and short-term bills.

OK, they recognize that the bulk of the bail out has been financed through debt.

Q: How much money has the U.S. government spent or loaned out since September?

Here the article falls into drivel about the original $700B and today’s $800B.   They apparently haven’t kept up.   Bloomberg says the number is now over $7.7 Trillion.   Maybe to these economists a 500% miss is just a rounding error!

Q: How much longer can the government keep spending?

A: A lot longer, economists say. International investors will keep buying Treasury securities even though the interest rates on many of them are close to zero percent.

Based on this, if I can con multiple banks into giving me loans, regardless of whether I can pay them back, that’s a good way to “enhance my cash flow!”   Huh?   isn’t that the kind of thinking that got us into this situation?

Q: But should the U.S. government be spending so much money?

A: Most economists say yes. Although the federal budget deficit is projected to hit a trillion dollars next year, incurring massive debt at this point is eminently preferable to letting the U.S. economy slide into deep recession.

America can worry about cutting deficit spending when the economy starts growing at a healthy clip, economists said. The goal now is to get banks lending and consumers spending again.

Have we all missed something?   Is there a magical economic formula that says that unwarranted borrowing coupled with excessive spending leads to economic bliss?   Putting this thinking into the Shoebox household, we would be perfectly justified in taking the loans we had bilked banks out of and living a lifestyle that wasn’t sustainable  but for  the loans.   Oh, and we would tell ourselves it was OK because we would pay back the loans when we “got back on our feet.”  

Q: But will all this work?

A: It’s better than doing nothing.

Which leads us back to where we were two weeks ago when I chronicled Hank Paulson’s comments as:

  1. We didn’t know what we were doing.
  2. We don’t know what we’re doing now.
  3. We aren’t sure what we’ll do in the future.
  4. Trust me, I’m spending the money well!

First,  we had a “consensus” of scientists saying that the debate over man made global warming was over.   Now, according to McClatchy, we have “most” economists saying we should continue to borrow and spend without regard to the consequences.   Is it just me or does it seem like when it comes to government, being a part of the “in crowd” almost always means your wrong?

November 25, 2008

A Second Bad “Get Rich Quick” Scheme

by @ 5:35. Filed under Global "Warming".

I wrote a couple of weeks ago that responding with money to email solicitations from Mr. Morgan Smith of Nigeria, was not a good investment. In fact, I heard recently that a second person responded to Mr. Smith and she was now short nearly $400,000!

Yes, you have to be careful what you invest in.   Along with land in Florida and bridges in either San Francisco or New York, comes the next perilous investment opportunity, The Northern Passage.

McClatchy is reporting the possibility of commercializing the ice free Northern Passage. I mean gee, this is actually the third time in the last 110 years that it has become passable, must be a trend!

While commercialization of the Northern Passage would be a good thing, I wouldn’t be investing with anyone who was suggesting that they didn’t have a plan to work in really challenging, thick ice conditions! McClatchy seemed to miss a couple of details from the last few weeks like:
October 2008, Fastest Ice Growth Ever and 200 Whales trapped in Canadian Artic Ice.

Still thinking you want to get in early on the “Next Great Thing?”   You may want to take a look at one of these historical views of arctic ice coverage first.

Still think the ice is going away? Well than “Spin the wheel and take your chances!”

But don’t say I didn’t warn you!

November 24, 2008

Pot Meet Kettle

by @ 5:51. Filed under Economy, Politics - National.

After a week of Congressional appearances and public angst over the possibility of an industry bailout, Nancy Pelosi gave the CEOs of the Big 3 automakers the following advice as they  retreated for their private jets to head back to Detroit:

“I am very optimistic and hopeful that they have gotten the message that they just can’t come and say, ‘Give us this,’ ” Pelosi said Friday. “How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?”

How different is this?

The US debt is now at $10 Trillion and counting.   That number doesn’t include the $3.5 Trillion, and counting, price tag of the various bailout and stimulus packages.   The US deficit (negative cash flow) is projected to be $1 Trillion in the next fiscal year and while a big chunk of that is from the bailouts, there’s no plan to reduce the annual deficit and pay down the national debt. Lastly, the unfunded liability for Social Security and Medicaid is estimated to be as high as $101 Trillion!

During the Congressional hearings, the Big 3 were justifiably berated for not dealing with the reality of their financial circumstances and for not having enought foresight to anticipate the need for significant change in their industry.   Certainly one can argue that the current economic environment accelerated the auto problems but they were coming, it was just a matter of time.   Again, how different are they than the US budget and deficit issues?

Let’s look another time at Pelosi’s advice to Detroit:

“I am very optimistic and hopeful that they have gotten the message that they just can’t come and say, ‘Give us this,’ ” Pelosi said Friday. “How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?”

Is there any part of that statement that is not just as accurate for Obama, Pelosi and Reid as they clamour for more taxes?   Pelosi and Reid, justifiably, demand accountability from Detroit.   Accountability that they and their compatriots in Congress refuse to put on themselves!

Pelosi and Reid demand that the leadership of the automakers:

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week and providing what many lawmakers called stilted, incomplete answers.

Pelosi and Reid summed up their expectations of the “skin in the game” required from the leadership of the automakers by saying:

“In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.”

When will Congress set the same limits and expectations on their pay, benefits, perks as they are demanding the auto execs do?   When will Congressional leaders put their “skin in the game?”   When will Congress eliminate the ability to gain any future income from their time in Congress and remake the Representative and Senator roles into the public servant, not public fleecing  roles that they were intended to be?  

If the issue is that the auto execs deserve to be impacted because they have mismanaged their companies into a situation requiring a bailout by the American taxpayer, well, Pelosi, Reid and every other Congress person has done exactly the same thing!

It’s time for Pelosi, Reid and the rest of the Congressional leadership to lead by example!   Before they get another penny of taxes, of any kind, they should vote to impact their own economic benefits in the same way that they expect Detroit to impact theirs.

November 19, 2008

Lies, Damned Lies and Statistics

by @ 5:44. Filed under Economy.

The Labor Department released the latest Producer Price Index (PPI) today.   The PPI shows what is happening to prices at the wholesale level.   The latest results showed that the PPI had decreased by 2.8%, the sharpest decline ever recorded.

While the full PPI declined, the core PPI (they remove price changes for  energy and food) rose this month by .4%.

I’ve always thought this notion of “core” PPI to be utter nonsense.   As energy prices were soaring and food along with it, during late last year and early this year, various economists pointed to the lower core PPI as evidence that inflation was still under control.   I don’t know about the economists but my household gets pretty severely impacted by dramatically rising energy and food prices.   Those two items don’t have significant elasticity of demand in our checkbook!   For this and other reasons, I don’t tend to pay a lot of attention to the “core” changes of PPI.   In today’s report however, I say an anomaly that caught my eye.

At the very end of the report was this explanation of why the total PPI went down while the core PPI continued to rise:

The 0.4% increase in core PPI was driven by a sharp 2.6% jump in light truck prices, which include sport utility vehicles, and higher prices for other capital goods.   (emphasis mine)

You’re kidding right?   We’re supposed to believe any of these statistics are meaningful?   The reason the core PPI increased was because of an increase in costs of SUVs?   First, isn’t Detroit complaining that they aren’t selling any vehicles and thus need a bailout?   Does anyone really believe that SUV prices have increased?   I don’t mean the sticker price, I mean the price you actually pay!  

Second, does anyone know someone who purchased a brand new SUV in October?   Weren’t there just stories saying that October was the worst car sales month in 30 years?   Haven’t we seen stories telling us that SUV sales have dried up?

Definition of Statistics:   The science of producing unreliable facts from reliable figures.   Evan Esar

The saddest part about all of this is that our taxes are paying for someone to put out this drivel.   I think I’ve found one place where Obama could trim the Federal budget!

Here Endeth The Discussion of Bail Outs

by @ 5:14. Filed under Economy.

Hank Paulson found Bank of America worthy of a $25 billion investment via his “Anything goes” TARP program.

You remember that TARP program? Those funds were supposed to be used to shore up the US financial system? You also remember how Congress, after having been burnt by Freddie and Fannie assured us that TARP would have significant and stringent oversight?

Um, not so much.

Bank of America was in such dire need of the capital infusion, money that was supposed to assist loans in the US, that they thanked the US taxpayer by investing  $7 billion to increase their stake  in a Bank in China!

Is it any wonder why the vast majority of Americans believe the country is going in the wrong direction?  

Are there anymore questions about whether Congress should ever do another “bail out?”

November 18, 2008

Left Logic

by @ 5:52. Filed under Miscellaneous.

OK, I admit up front that the title is an oxymoron.  

It didn’t take long following the 35W bridge collapse before the left, unable to bypass another “Bleed it leads” headline, started claiming that lack of funding caused inadequate inspections and thus the bridge collapse. A month had not passed when  a Star and Tribune editorial ran an editorial crying that the bridge collapse proved we needed to pay higher taxes:

The need to acknowledge that, whatever the collapse’s specific cause, Minnesota has allowed its transportation infrastructure to deteriorate to a level that threatens the safety of the public and the future of the economy.

and

The need to comprehensively repair what’s crumbling and start building and funding a transportation system compatible with market demand and the new global realities of energy insecurity and climate change.

The final report on the 35W bridge collapse was issued by the NTSB this week.   The findings, identified early in the process but naysayed by those who wanted a demon, was that the gusset plates were undersized by 50% in the original design.  

Darn, that sure puts a crimp in the whole “we need your money, money, money” meme!

Not to be put off track, the Star and Tribune wrote an editorial this Sunday addressing the NTSB report.   Unable to use the report to further pin the tail on the Republican Donkey Elephant, the Star and Tribune goes the next step and blames the Minnesota Taxpayers:

Last week’s National Transportation Safety Board (NTSB) hearings on the cause of the Interstate 35W bridge collapse were dominated by the technical lingo of the investigators. Finite element analysis. Initiation location. Load redundancies. There was also one oft-repeated phrase combining two words rarely used together: “bridge owners.”

A heads-up to all Minnesotans: The NTSB is talking about you. And while it’s hard to think about owning bridges the same way as a home or a car, the reality is that these critical components of daily life belong to the public — not to politicians, not to transportation officials nor any other bureaucrat. Everyone owns them. Everyone shares the responsibility for ensuring they are maintained and cared for.

Um, No!

Can you just imagine the scene that would occur when I decide that I’m concerned about bridge X and that because I am a “bridge owner,” I’m going to stop traffic so that I can crawl around the bridge to give it my examination?   OK, well maybe that wasn’t what the Strib was going for.   However, their notion that we each share a responsibility for the safety of bridges is just as ridiculous.

The problem with the Strib’s thinking, and that of much of the Left’s policies are that at the first sign of trouble, if they can’t immediately pin the problem on a Republican, the next stop is that it’s “everybody’s problem!”   When it’s everybody’s problem than it is the perfect reason not to be left to individual cases but must be dealt with as a blanket issue by the Federal Government.   The left has no ability to deal with personal accountability.   Doubt me?

Abortion – no personal accountability at all.   Abortions must be available all the time for any reason.

Guns – must be banned.   No one individual can be held accountable for their improper use of a gun so no one can have one.

Fairness doctrine – some one may be offended so no one can hear speech that has a different opinion.

Social programs – don’t even get me started!

Education – again, don’t get me started!

The only way that I agree with the Strib is that we as taxpayers hire people to monitor, manage and repair various functions.   We call these people Senators, Congress people, Governors, Presidents etc.   In some cases, like the 35W bridge collapse, it doesn’t appear that there is reason to believe that any of these folks, or the folks they hire and oversee, would have reasonably determined the flaw in the original bridge design.   That said, in most other situations, these same people should be expected to anticipate and correct problems.   Unfortunately, that seems to be happening less and less.   In that case, we taxpayers are “owners” and we need to be more vigilant in holding our elected officials to accountability.

As I used to tell some of my people, “I’ve hired you to do a job and expect you to do it.   I’ll help, coach and support you but I won’t do your job.   If I have to start doing your job, then one of us is no longer needed….and it won’t be me.”

57,58,59 or 60 – It Really Doesn’t Matter

by @ 5:08. Filed under Politics - National.

Some parts of the Country, political junkies and all the D.C. insiders are holding their breath awaiting the result of the Alaskan absentee count, the Minnesota recount and the Georgia runoff.   All actions that will determine Senate representation in those states.   The results will also determine whether the Democrats have 57, 58, 59 or the magical 60 votes.  

Here’s a news flash, the remaining 3 elections don’t matter.

Well, I guess they do matter if you’re into the community soccer “we’re all winners” kind of scoring.   However, in terms of running the Senate or holding the Democrats from running wild on their agenda, the results don’t matter.

Don’t believe me?

Let’s assume the Republicans hold the last three races.   Let’s look at a few issues and see if the Democrats can get them moved through.   Remember, it only takes 3 RINO defections to join the Democrats and the Democrats can cease debate and move to a vote.

Global warming – Specter, Coleman and McCain are all firm believers in man made global warming.  

Off Shore drilling – Coleman, Collins and Graham are just 3 of the 10 Republicans who were willing to give away any real ability to drill because they saw political advantage.

Illegal amnesty – McCain, Graham and Kyl were the ringleaders on the last go around.   I don’t expect they’ve found any reason to change their positions.

Abortion issues – Snowe, Collins and Specter are all pro choice.

There’s a part of me that  wishes the Dems would get their 60 votes.    Even at 59, Reid and his ilk will continue to stand in front of microphones and whine about “Republican obstructionists,” after which, he’ll cry “Buuuuuuuuuuuush.”   At 60, all of that goes away and the Dems will have no one but themselves to look.

Regardless of the outcome of the three remaining elections, the Dems will have full control of  Washington on nearly every issue that comes up.   After all, it’s not like this election has made the RINO an endangered species, it’s just made them a little less likely to blend into the background.

November 17, 2008

The End Justifying the Means?

by @ 5:58. Filed under Global "Warming".

5The Telegraph reports today  that what had been reported as the warmest October on record turns out to be not even in the top 50% of warmest! How would such a discrepancy occur? Can you say “data manipulation?”

Originally, Nasa’s Goddard Institute for Space Studies (GISS), which is run by Al Gore’s chief scientific ally, Dr James Hansen reported that while many of us had experienced unusual cold in October, areas of Russia were 10 degrees above average. However, when reviewed by a couple of official “deniers,” it was determined that GISS merely copied September’s information across into October for the Russian readings!

Oops, our mistake….or maybe not!

Instead of admitting their mistake, GISS said, “Oh no, um, that wasn’t it. There was unusual warmth in the Arctic!” The problem with this is that the Arctic has been cooling so fast that the ice (remember all the screams about the melting ice this spring?) that was melting and about to flood Florida off the map, has been reforming so fast that it is now 30% larger than last year at this time.

Again, our mistake….um nope!

I’ll just cut and paste this because it is the epitome of truth being stranger than fiction:

Another of his (Dr. Hansen’s) close allies is Dr Rajendra Pachauri, chairman of the IPCC, who recently startled a university audience in Australia by claiming that global temperatures have recently been rising “very much faster” than ever, in front of a graph showing them rising sharply in the past decade. In fact, as many of his audience were aware, they have not been rising in recent years and since 2007 have dropped.

Dr Pachauri, a former railway engineer with no qualifications in climate science, may believe what Dr Hansen tells him. But whether, on the basis of such evidence, it is wise for the world’s governments to embark on some of the most costly economic measures ever proposed, to remedy a problem which may actually not exist, is a question which should give us all pause for thought. (emphasis mine)

Huh, What?   A railroad engineer?   This guy is only smart enough to drive a vehicle on a track?   We’ve got a person who’s only qualified to  drive the Jungle Cruise at DisneyWorld telling us that man is ruining the earth?

I was thinking the other day, when I heard that Al Gore had turned down the offer to be “Global Warming Czar” from Barack Obama, “Why would he do that?”   Honestly, if the guy is as concerned as Gore claims to be about global warming, why not take the role that would undoubtedly set direction and precedent for at the the US and possibly the world?

Yeah, I thought about it for about 5 seconds and  the answer was  obvious.   If Al became the Czar he’d actually have to answer questions, come up with facts, be subject to scrutiny.   On top of that, he wouldn’t be able to charge ridiculous amounts of money as the “Johnny Appleseed” of global warming!   No, none of that would do.   Why would Gore want to subject himself to all of that when with the election of Barack Obama, he got another four year lease on fleecing of the gullible public.

Who’s Doing The Math?

by @ 5:47. Filed under Economy, Politics - National.

Wasn’t it just last week that Barack Obama said there is only one President at a time?

Barack Obama and others are pushing a $50 Billion bail out of the Auto Industry.   Phrases like “too big to fail,” “catastrophic” and “psychological impact” are being used as reasons for urgent and significant action (sound familiar?)

This time, unlike the original “trust me” bailout, we have a pretty good idea of what is causing the problem and how big the problem is.   Let’s take a look.

The  current problem with the automotive industry is that they aren’t selling any cars.   Some claim credit is an issue, some claim that Detroit is designing and making vehicles people don’t want.   I don’t think either of those are more than a small percentage of the problem.   The core problem is that consumers have pulled in their spending, hard.  

The last thing many consumers are doing while jobs are a concern,  is to  make major purchases that are not absolutely essential.   While credit for purchasing autos hasn’t dried up, it has gotten tighter.   Rather than financing more than 100% of the purchase price, most lenders have gone back to the draconian practice of getting a down payment!   Additionally, the value of used cars have dropped drastically in the past few months.   This means that many consumers have a bigger delta that they need to bridge between the value of their  trade in and the car they desire.  

While current sales are certainly a problem, even waving a wand and restoring 2006 level sales won’t save Detroit.   Why?   Detroit has a cost structure that is uncompetitive.

The Carpe Diem blog put together an analysis that shows that the Big 3 pay fully loaded wages that are 50% higher than their competitors levels. Now we can argue about whether this is labor or management’s problem to solve but regardless, even with the Big 3 closing the gap on productivity, they are left with a significant cost disadvantage which isn’t going away.   OK, so that’s one problem.

Another problem is with the pension plans that the Big 3 have.   Over the years, they have made commitments to their union employees to provide certain retirement benefits.   Like a lot of companies and industries, the funding for these retirement programs have not kept up with the expected cost of the benefits.   In the case of the Big 3, the unfunded portion of their health and pension programs is now estimated to be $90.5 billion.  

Not that it’s impossible, but it’s hard to imagine any of the Big 3 returning to a profitability level that could put a serious dent into the $90.5 billion short fall. GM’s last profitable year was in 2004 and it was just shy of $3 billion. GM’s share of the $90.5 Billion is estimated to be about $50B.

Finally, the Big 3 are burning huge amounts of cash. Reports have it that GM and Ford alone, are using $15 Billion per quarter. Chrysler is a private company so it doesn’t report it’s burn rate but you can bet they are feeling pain as well. At the end of September, 2008, GM had $16 Billion of cash. They had burned nearly $9 billion during the quarter. It’s entirely likely that GM’s situation has not improved this quarter. If their cash burn continued as it was in the third quarter, they are reaching a point of no return. With the consumers now sitting on the side lines, especially with major purchases, and many economists saying we won’t see any improvement until at least the second half of 2009 and some saying into 2010, how does $50 billion make much of a dent in an industry that is burning $15+ billion per quarter?

So here are the questions:

  1. Does shoving $50 Billion into a $90.5 billion hole even get you to the point where you can see above the edge of the hole?
  2. Do you believe that $50 Billion can buy enough time for the automakers to keep them alive until consumers buy their product again?
  3. If you answer yes to 1 and 2, how do the Big 3 remain/regain competitiveness with a labor cost structure that is 50% above their competition? Oh, and if you have any notion that the competition is getting easier, read this great article!

Should GM and others get a straight “bail out?”   Nope.   I can’t see how putting money into this without a dramatic change in the underlying cost structures does anymore than delay the inevitable.   Additionally, I don’t want Nancy Pelosi and Barack Obama making decisions on what the Big 3 make, how they make it etc.   Having anyone in Washington dictating Detroit’s marketing plan is a sure way to ensure we’d never get the money back.

Should GM fail?   Probably.   Should it fail now?   Probably not.   While I don’t favor a straight bail out via capital infusion or additional loans, I would favor debtor in possession loans.

I believe GM, and the others if they find themselves there, need to go through a Chapter 11 reorganization.   It appears to be the only way for them carve out profitable business segments and shed costs that they can no longer support…and I’m not talking just union contracts.   The conventional wisdom is that GM and others, can’t file for bankruptcy because they couldn’t get interim financing.   I think the conventional wisdom is accurate.   However, I don’t see the government standing by and watching GM sink under the waves, they will do something.   I would rather see the hard decisions forced via the bankruptcy proceeding than allow “whistling by the graveyard” of getting funding and hoping it will be enough to get by.  

Some may argue that by filing for bankruptcy the US tax payer will end up paying for the unfunded liabilities of the pension and health plan as they are insured by the Pension Benefit Guaranty Corporation.   While that is true, I suspect we’re going to be ultimately responsible for it anyway.   By forcing the issue now we can stop the bleeding.

Some may argue that the example of Chrysler in the ’80’s shows that bankruptcy isn’t needed.   Actually, the Chrysler situation proves the point for bankruptcy.   The Chrysler loans,  a deal at just $1.2 billion, contained language that required Chrysler supplies to provide certain concessions.   The effect was that Chrysler negotiated contracts with suppliers, unions and debt as if they were in bankruptcy.   The populace is already upset about the $700 billion bailout and even more so by Paulson’s nose thumbing on doing what he said he was going to do with it.   If a bail out for Detroit gets shoved down the taxpayer’s throat, it should at least have the appearance of serious consequences for shareholders and those who have been sucking from the teat while the industry fails from a growing cancer.   Even without a bankruptcy filing, Washington is going to find little support for a Detroit bailout.   With a bankruptcy filing, the howls may be muted.

Additionally, there is concern of whether US consumers will purchase from an auto company that is in bankruptcy.   To those folks I say, that folks are more likely to buy from a company that is dealing head on with their issues and forging a plan than with a company whose future is solely tied to a quick spring back in the economy.

In the end, I don’t know if the US auto industry, as we know it, will survive.   Certainly pieces of it will but I doubt it will contain the behemoths we see today.  

It used to be said that “What was good for GM was good for America.”   While I think that phrase may still be fairly true, I don’t believe that the converse is true.   America can’t  continue to write checks with nine zeros at the end of some number.   This is especially true when there are endemic issues that significantly dilute the benefit of any support.   There will likely be support for the Big 3, I hope that Detroit is forced to deal with their issues and Washington resists the temptation to dictate automotive development.

I hope but I’m not hopeful!

November 15, 2008

Well, This Is One Way to Fix It!

by @ 15:33. Filed under Politics - Minnesota.

Heard today on the Northern Alliance Radio Network:

You may have heard about the little issue of a recount for the MN Senate race?   You may also have heard that our Secretary of State, who ran on a platform of “The Secretary of State should be non partisan” but has been THE most partisan Secretary of State and arguably executive leader in Minnesota ever, has been highly partisan in his actions thus far.   You may also have hear that our Secretary of State has a history with groups like ACORN…

Well,

The House Republican leader, Marty Seifert announced that the Republican House minority has agreed with Governor Tim Pawlenty that the Governor will line item veto the budget for the Secretary of State’s office and the Republican House members will sustain the veto, until the Democrats agree to require a photo ID for voting!

Seifert has done a great job leading a minority group.   If it hadn’t been for 6 RINOs last year (Oh and they are all gone now) he would have held the Dems last year  to a modest budget increase with no increased taxes and left us positioned to face the current downturn.   It’s unfortunate that Seifert has not had a majority to work with…he’s my kind of Republican.

It will be interesting to see how this plays out.   I’m sure the Dems will get snippy and threaten retaliation.   The real question will be if the 47 Republican House members can stay united.   I suspect they can.

A photo ID requirement would at the least put to rest, concerns of voter fraud.   If it doesn’t exist, no harm.   If it does exist, there’s no other way to ferret it out.

Good luck Marty!   This will be one blogger who will watch and support your efforts!

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