Counterterrorism in India: Inept, Corrupt, Callous

Flunking the Intelligence Test

Excerpts:

The hostage takers in Mumbai didn't need to wonder how large an armed rescue team the Indian government was sending, or when to anticipate its arrival. They had only to click on the nearest TV set, and there was the federal home minister, Shivraj Patil, obliviously telling viewers that 200 commandos had taken off on the two-hour flight from New Delhi at 2:30 a.m.

...

About an hour before the shooting started, villagers on the shore in South Mumbai saw a group of 10 young strangers climbing out of an inflatable raft. The incident was reported to local police, who did nothing.

...

[at an attacked hospital]: The state's antiterrorism chief and two other top police officials arrived at the scene with a posse of cops who were armed with antiquated .303 rifles. Seemingly unaware of any danger, the three men stood unprotected on the firing line, where they were quickly mowed down by sudden bursts of automatic gunfire.

...

Horrified police officers in Mumbai saw their vehicles hijacked by terrorists who showed intimate knowledge of the city's streets and the layouts of the huge hotels they captured. In contrast, the police displayed no familiarity with the layouts of those buildings. The commandos who flew in from New Delhi had to waste precious time getting hotel staff members to sketch out the layouts of their workplaces.

...
Today MAC [Multi-Agency Center] consists of a tiny staff using a bare-bones computer system with no real-time links to state police or other intelligence sources.

Comment: Many lessons to be learned from Mumbia attack!

Tesla: Federal funds?

Only the Rich Can Afford It. Should Taxpayers Back It?

Excerpts:

THE Tesla Roadster is an electric car that goes fast, looks sensational and excites envy. The seductive appearance, however, obscures some inconvenient truths: its all-electric technology remains woefully immature and don’t-even-ask expensive. If enough billionaires step forward to inject additional capital to keep the doors of its manufacturer, Tesla Motors, open, I’m happy for all parties.

If investors pass up the opportunity, however, why should taxpayers fork over the capital that Tesla needs? The Roadster is not much more than a functioning concept car that sells for $109,000. The company is requesting $400 million in low-interest federal loans as part of the $25 billion loan package for the auto industry passed by Congress last year.

The program is intended to encourage automakers to improve fuel efficiency, but should it be used for a purpose like this, as the 2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act? Can you conceive any way that federal dollars could be put at greater risk — and for no equity in return, keep in mind — to benefit fewer people?

Tesla Motors, a privately held company based in San Carlos, Calif., has spent almost all of the $145 million in capital it has raised to date. It says it will soon receive another round of $40 million from its private investors to sustain operations.

In the start-up ecosystem of Silicon Valley these would be respectably large numbers, but in the automotive world, fully developing an entirely new line of technology can easily run $1 billion. That is what General Motors’ first attempt at an electric vehicle, the EV1, was estimated to have cost to develop in the 1990s.

Tesla says it cannot move forward on plans to bring out a second-generation car, a less expensive sedan seating five, without federal funds.

...

...for Tesla, batteries are based on chemistry and have nothing to do with Moore’s Law. Lawrence H. Dubois, chief technology officer at ATMI, a semiconductor industry supplier, said, “With batteries, you can’t just squeeze more energy into a smaller and smaller space the way you can squeeze more transistors.”

Elon Musk, the chief executive of Tesla, said his company would benefit from what he called “a weak Moore’s Law,” referring to the 8 percent annual improvements in the price performance of lithium-ion batteries. But 8 percent, compounded, would bring too few benefits, too late to Tesla: it would take nine years to halve the price of its battery pack.

Comment: My answer to this question: "Only the Rich Can Afford It. Should Taxpayers Back It?". NO! The way to raise capital is through IPO's, stock offerings, venture capital, bonds, and commercial loans.

Mumbai: Timeline of NSG response

Comment: NSG = National Security Guard

Why did NSG take 9 hrs to get there?

Excerpt:

By the time they start their operation, it is 7am — in other words, nine-and-a-half hours after the terror strike.

Many lives might have been saved had this delay not happened. The obvious question is why is the NSG stationed only in Delhi. When Indian cities are vulnerable to terror attacks, why is there no commando force like the NSG, or its units, in every city?

Timeline Emerges Amid Security Changes in India

Excerpt:

• 9:30 p.m. Wednesday: The terrorists strike Mumbai. Chief Minister Vilasrao Deshmukh is in Kerala. He is briefed about the attack. By the time he grasps the enormity of the situation, 90 minutes have gone by.
  
• 11 p.m.: Mr. Deshmukh calls Home Minister Shivraj Patil - who has now resigned from his post - and asks for NSG commandos. “How many men?” Patil asks. “200,” Mr. Deshmukh says. Mr. Patil calls NSG chief J.K. Dutt and tells him to send 200 battle-ready commandos to Mumbai.
  
• 11 p.m. to 2 a.m. Thursday: Most of the NSG men have to be roused from sleep. They don their uniforms, strap on safety gear and collect ammo and firearms. It is discovered that the plane that can take 200 men, the IL 76, is not in Delhi but Chandigarh. Someone wakes up the IL 76 pilot, the plane refueled. It finally arrives in Delhi.
  
• 5 a.m. The commandos land at Mumbai airport. By the time they board the waiting buses, it is 5:25 a.m.
  
• 6 a.m. The buses reach the designated place in south Mumbai where the commandos are briefed, divided into different groups and sent out on their mission.
  
• 7 a.m. They start their operation about nine-and-a-half hours after the terror strike.
  

Comment: This seems like a slow response!

Is Pakistan is the root of the problem?

Patrick Cockburn: Pakistan is the root of the problem

Excerpt:

It is self-defeating hypocrisy for the West to lecture the Indian government now about not over-reacting and not automatically blaming the Pakistani government or some part of its security apparatus for Mumbai. The way in which the Pakistani military has allowed Kashmiri and Pakistani militants free range in Pakistan created the milieu from which the attacks this week came. It may be that the monster the ISI created is no long under its control, but it is ultimately responsible for what has happened.

The real political background to Mumbai is succinctly summed up by Ahmed Rashid in his excellent book Descent into Chaos: How the War against Islamic Extremism Is Being Lost in Pakistan, Afghanistan and Central Asia. In Pakistan, he writes, "a nuclear-armed military and an intelligence service that have sponsored Islamic extremism as an intrinsic part of their foreign policy for nearly four decades have found it extremely difficult to give up their self-destructive and double-dealing policies".

Comment: I'm not sure the answer to the question is yes. I invite comments.

Wish I had a gun rather than a camera

Mumbai photographer: I wish I'd had a gun, not a camera. Armed police would not fire back

Excerpts:

The gunmen were terrifyingly professional, making sure at least one of them was able to fire their rifle while the other reloaded. By the time he managed to capture the killer on camera, Mr D'Souza had already seen two gunmen calmly stroll across the station concourse shooting both civilians and policemen, many of whom, he said, were armed but did not fire back. "I first saw the gunmen outside the station," Mr D'Souza said. "With their rucksacks and Western clothes they looked like backpackers, not terrorists, but they were very heavily armed and clearly knew how to use their rifles.

..

[there] were the masses of armed police hiding in the area who simply refused to shoot back. "There were armed policemen hiding all around the station but none of them did anything," he said. "At one point, I ran up to them and told them to use their weapons. I said, 'Shoot them, they're sitting ducks!' but they just didn't shoot back."

As the gunmen fired at policemen taking cover across the street, Mr D'Souza realised a train was pulling into the station unaware of the horror within. "I couldn't believe it. We rushed to the platform and told everyone to head towards the back of the station. Those who were older and couldn't run, we told them to stay put."

The militants returned inside the station and headed towards a rear exit towards Chowpatty Beach. Mr D'Souza added: "I told some policemen the gunmen had moved towards the rear of the station but they refused to follow them. What is the point if having policemen with guns if they refuse to use them? I only wish I had a gun rather than a camera."

Comment: View article for photos of killers.

GM: Pre-packaged Bankruptcy option

Pre-packaged Bankruptcy Is GM's Only Option

Excerpt:

... a traditional Chapter 11 filing could quickly slide into Chapter 7 bankruptcy if GM (or Chrysler or Ford (F) a few months down the road) can't find anyone to lend them the money to keep operations running. That's why Barron's advocates a "pre-packaged bankruptcy" - in which a company enters bankruptcy protection with almost all of its financing in place - in this case backed by the government for a year or so. "In that time, and under the protection of the court, GM could begin to restructure its business with a much higher probability of long-term survival," Mark Bane, co-head of bankruptcy operations at the law firm of Ropes & Gray, says.

Comment: I've also heard this called a GSB (Government Sponsored Bankruptcy).

UGA, Lock in Low Gas Prices

Lock in Low Gas Prices

Excerpt:

Oil has declined nearly 66% from its peak closing price of $145.29 on July 3rd to its closing low of $49.62 on November 20th. With gas prices down significantly since then, drivers no longer dread filling up at the pumps like they did just a couple of months ago.

We recently came across a good article highlighting a simple way to lock in low gas prices. The US Gasoline Fund (UGA) is an ETF that tracks the price of gasoline futures in the US. If you want to go to the pump and not even care what gas prices are, you can buy the same dollar amount of UGA that you would normally spend on gas each year based on the current price of gas. If gas prices go up and you're paying more at the pump, your UGA will also be going up by a similar amount. If gas prices go down, your UGA will also go down, but you'll be paying less at the pump as well.

Comment: Yahoo Finance: UGA.

From quirky mental accounting to real-income living

The Challenge of Living Within One’s Means

Excerpt:

...the shift to real-income living demands not only new spending habits, but also a wholly different way of thinking about money.

“Every time we ended up overextended, we used to refinance our house,” Ms. Jones, a software engineer in Scotts Valley, Calif., acknowledged. “The house would creep up in value, and every five years or so we’d take out another $50,000, and pay off whatever we needed to.”

She and her husband never felt that they were getting into debt, Ms. Jones said, because a kind of magical thinking prevailed: “You owed more, but then your house was worth more,” she said. “So you didn’t really have debt because you could always sell your house — and poof! — all previous sins would be erased.”

For years, the Joneses sensed that something was wrong. Their expenses kept spiraling out of control and their checking account was chronically overdrawn. But as the economy began to tremble — and the couple realized that they wanted to right their finances before their 11-year-old daughter entered college — they decided to change course. “There was this constant, underlying anxiety about money,” Ms. Jones said. “It was ridiculous — I knew we should be able to live on what we were earning.”

But switching to a lifestyle based on your actual income is more challenging than it seems, especially if you’ve been relying on credit as an income supplement. The maxim to “tighten your belt” implies that self-discipline is the solution, but our financial brains aren’t so easily tamed.

Many people rely on a quirky system of mental accounting when making financial choices, according to economists who study spending. If you saved $30 when buying a sweater, for example, you might talk yourself into buying shoes, with the rationale that you have an extra $30.

The use of credit tends to make people’s financial reasoning even more flawed, according to Dilip Soman, a professor of marketing at the Rotman School of Management, University of Toronto. “I find that people who are used to paying for expenses by credit card tend to create an ad hoc ‘credit card bill’ mental account,” Professor Soman said in an e-mail message.

“If the credit account vanishes, people are now forced to make cuts into their lifestyle, because their budgeted spending money supply has now shrunk,” he said, even though that supply shouldn’t have been included in their accounting from the start.

Comment: Something my parent's generation did naturally - "real-income living"

Shopping frenzy

Wal-Mart Employee Trampled to Death by Customers

Excerpt:

A Wal-Mart employee in suburban New York was trampled to death by a crush of shoppers who tore down the front doors and thronged into the store early Friday morning, turning the annual rite of post-Thanksgiving bargain hunting into a Hobbesian frenzy.

At 4:55 a.m., just five minutes before the doors were set to open, a crowd of 2,000 anxious shoppers started pushing, shoving and piling against the locked sliding glass doors of the Wal-Mart in Valley Stream, N.Y., Nassau County police said. The shoppers broke the doors off their hinges and surged in, toppling a 34-year-old temporary employee who had been waiting with other workers in the store’s entryway.

People did not stop to help the employee as he lay on the ground, and they pushed against other Wal-Mart workers who were trying to aid the man. The crowd kept running into the store even after the police arrived, jostling and pushing officers who were trying to perform CPR, the police said.

“They were like a stampede,” said Nassau Det. Lt. Michael Fleming. “Hundreds of people walked past him, over him or around him.”

The employee, who was not identified, was taken from the Wal-Mart to nearby Franklin Hospital, where he was pronounced dead at 6:03 a.m., the police said. His exact cause of death has not been determined. The police said that three other shoppers were injured and a 28-year-old woman who was eight months pregnant was taken to the hospital for observation.

One shopper, Kimberly Cribbs, said she was standing near the back of the crowd at around 5 a.m. on Friday when people started rushing into the store. She said several people were knocked to the ground, and parents had to grab their children by the hand to keep them from being caught in the crush.

Comment: They kept storming in even as people gave aid! Hard to believe.

Drunkenness leads to "humiliation afterward"

Comment: I don't post this to be sensational, but because of: 1.) The Minneapolis connection (where I live and where this is in the news) and 2.) because it illustrates how stupid drunkenness can make a person.

Hawk fan says bathroom sex scandal "ruined my life"

Excerpt:

Feldman, who describes herself as a light drinker, drank wine at the home of family friends before the football game.

She said she doesn’t remember how much she drank, but the party’s hosts refilled her glass each time it was low “so I’m sure I drank a lot.”

Feldman said her husband later told her he’d tried to talk her out of the game because she was intoxicated.

“He said I didn’t realize it was that bad,” she said.

Feldman said her husband accompanied her to the game, but their friends stayed home.

She said she remembers sitting in the stands one moment and the next “being slammed around by a cop and screaming.”

“Apparently I was panicked and very uncooperative,” she said.

Feldman said she “ran away” from her husband the Metrodome after the incident.

Comment: Apparently her husband "has been supportive". Sad story and definitely not funny.

Updated: Woman in Metrodome sex incident says she was victim

While police say a high-profile indecent conduct case in the Minneapolis Metrodome Saturday is closed, a Carroll woman involved in it told the Daily Times Herald she believes she was a victim of foul play rather than a willing collaborator.

Lois K. Feldman, 38, of Carroll, and Ross M. Walsh, 26, of Linden, were ticketed for indecent conduct after they were reportedly caught engaging in sexual activity in a Metrodome men's restroom handicapped stall during the University of Minnesota Golden Gophers game with the Iowa Hawkeyes. More than a dozen people in the restroom were cheering Feldman and Walsh by the time authorities arrived, a University of Minnesota Police report says.

Feldman acknowledged drinking heavily before the game and says she doesn't remember being in the bathroom.

"I would never ever do that," Feldman said. "My kids are my life. I go to church every Sunday."

Information obtained in police reports and during an interview with University of Minnesota Police Chief Greg Hestness revealed no suggestion or evidence that the incident was anything but consensual on the part of both Walsh and Feldman.

But Feldman tells the Daily Times Herald she may have been drugged or otherwise victimized.

"Everybody thinks something got put in my drink," Feldman said.

Baking, banking and two big lies

Baking, banking and two big lies


Comment: No excerpts but worthwhile read.

The "Deccan Mujahedeen" - Who are they?

Sophisticated Attacks, but Al Qaeda Link Disputed

Excerpts:

This time, the assault was “uniquely disturbing”, said Sajjan Gohel, a security expert in London, because it seemed directed at foreigners, involved hostage-taking and was aimed at multiple “soft, symbolic targets.” The attacks “aimed to create maximum terror and human carnage and damage the economy,” he said in a telephone interview.

...

An e-mail message to Indian media outlets that claimed responsibility for the bloody attacks in Mumbai on Wednesday night said the militants were from the Deccan Mujahedeen. Almost universally, experts and intelligence officials said that name was unknown.

Deccan is a neighborhood of the Indian city of Hyderabad. The word also describes the middle and south of India, which is dominated by the Deccan Plateau. Mujahedeen is the commonly used Arabic word for holy fighters. But the combination of the two, said Mr. Gohel in London, is a “front name. This group is nonexistent.”

Some global terrorism experts with experience in South Asia said that, based on the tactics used in the attacks, the group was probably not linked to Al Qaeda — although that assertion was challenged by other analysts.

“It’s even unclear whether it’s a real group or not,” said Bruce Hoffman, a professor at the School of Foreign Service at Georgetown University and the author of the book “Inside Terrorism.”

That theory was echoed by an Indian security official who spoke in return for anonymity because he was not authorized to be identified and who said the name suggested ties to a group called Indian Mujahedeen, which has been implicated in a string of bombing attacks in India killing around 200 people this year alone.

On Sept. 15, an e-mail published in Indian newspapers and said to have been sent by representatives of Indian Muhajedeen threatened potential “deadly attacks” in Mumbai. The message warned counter-terrorism officials in the city that “you are already on our hit-list and this time very, very seriously.”

Several high-ranking law enforcement officials, including the chief of the antiterrorism squad and a commissioner of police, were reported killed.

Comment: Interesting - possible link to "Pakistani intelligence". I'm personally surprised that India and Pakistan haven't gone nuclear on each other. A CNN analyst commented this morning that this "lands like a dull thud" on the desk of President-Elect Obama.

Proud people don't say thanks

3 Truths to Induce Thanksgiving

Excerpt:

Proud people can't be grateful. So here are three very humbling truths for the sake of your thankfulness.

1. Nature teaches us that an infinitely marvelous, eternally powerful being created us and all we have. Therefore we are his creatures. He owns us. Our life, our breath, and everything we have is a gift. Our duty is simply to be thankful to him from our heart and to cherish his glory.
   
2. All of us have fallen short of this duty. We have not consistently prized the diamond of God's glory with an affection anywhere near its value. Instead, we've exchanged it again and again for the cracked marbles that in our great "wisdom" we have determined are more valuable.
   
3. God, in his great mercy, sent his Son to suffer the judgment of people who are broken and contrite in spirit and who trust in him.
   

Proud people don't say thanks, but people who believe these three truths do. We are utterly dependent; we are depraved sinners; and we are redeemed and forgiven through contrite faith.

If this penetrates our hearts today, we will be emptied of pride and filled with thankfulness to God.

Comment: My heart is burdened today by the violence in Mumbai. I'm thankful for a sovereign God who sent His Son, my Savior!

Polar bears unmotivated by tawdry marketing gimmick

Zoo solves mystery of celibate polar bears

Excerpt:

Puzzled zookeepers in northern Japan have discovered the reason why their attempts to mate two polar bears kept failing: Both are female.

Comment: I had that problem with hamsters once. But then again I was 9! (My own feeble attempt to draw traffic to my blog by a tawdry marketing gimmick!)

Urbano Colectivo

Inbursa buys up to $150m in Citi shares

Excerpt:

Inbursa, the bank owned by Carlos Slim, the Mexican billionaire, has bought up to $150m in Citigroup shares over the past week as the US financial group’s stock plunged in value.

Inbursa, Mexico’s sixth largest bank, began buying the stock as prices fell on Wednesday last week, and continued the next day when they punctured the $5 mark. The bank’s brokerage arm is believed to have bought as many as 29m Citigroup shares for about $150m.

Comment: "Urbano Colectivo" is my translation of CitiGroup into Spanish

Huguenots: Long before the Pilgrims

A French Connection

Excerpt:

TO commemorate the arrival of the first pilgrims to America’s shores, a June date would be far more appropriate, accompanied perhaps by coq au vin and a nice Bordeaux. After all, the first European arrivals seeking religious freedom in the “New World” were French. And they beat their English counterparts by 50 years. That French settlers bested the Mayflower Pilgrims may surprise Americans raised on our foundational myth, but the record is clear.

Long before the Pilgrims sailed in 1620, another group of dissident Christians sought a haven in which to worship freely. These French Calvinists, or Huguenots, hoped to escape the sectarian fighting between Catholics and Protestants that had bloodied France since 1560.

Landing in balmy Florida in June of 1564, at what a French explorer had earlier named the River of May (now the St. Johns River near Jacksonville), the French émigrés promptly held a service of “thanksgiving.” Carrying the seeds of a new colony, they also brought cannons to fortify the small, wooden enclosure they named Fort Caroline, in honor of their king, Charles IX.

In short order, these French pilgrims built houses, a mill and bakery, and apparently even managed to press some grapes into a few casks of wine. At first, relationships with the local Timucuans were friendly, and some of the French settlers took native wives and soon acquired the habit of smoking a certain local “herb.” Food, wine, women — and tobacco by the sea, no less. A veritable Gallic paradise.

Except, that is, to the Spanish, who had other visions for the New World. In 1565, King Philip II of Spain issued orders to “hang and burn the Lutherans” (then a Spanish catchall term for Protestants) and dispatched Adm. Pedro Menéndez to wipe out these French heretics who had taken up residence on land claimed by the Spanish — and who also had an annoying habit of attacking Spanish treasure ships as they sailed by.

Leading this holy war with a crusader’s fervor, Menéndez established St. Augustine and ordered what local boosters claim is the first parish Mass celebrated in the future United States. Then he engineered a murderous assault on Fort Caroline, in which most of the French settlers were massacred. Menéndez had many of the survivors strung up under a sign that read, “I do this not as to Frenchmen but as to heretics.” A few weeks later, he ordered the execution of more than 300 French shipwreck survivors at a site just south of St. Augustine, now marked by an inconspicuous national monument called Fort Matanzas, from the Spanish word for “slaughters.”

Comment: The entire Op-Ed piece from the NYTimes is worthwhile. Further details available here and here.

Encouraging consumers to be deeper into debt

The Worst Is Yet To Come: Anonymous Banker Weighs In On The Coming Credit Card Debacle

Excerpts:

Over my career, I have seen thousands of consumers that have credit card lines in excess of their annual salaries. Some are sinking under their burden. Some have been fiscally responsible and have minimal amounts outstanding. My 21-year-old daughter, who’s in college, gets pre-approved offers all the time. She has no ability to repay debt, yet the offers flow in just the same. We all know how these lines are accumulated. The banks, in their infinite stupidity, keep upping credit lines because the customer pays the minimum payments on time. My daughter’s credit line started at $1,000 and has been increased over the last two years to $4,400. She has no increased earnings to support this. But the banks do it without asking. And without being asked. The banks reel in the consumer, charge interest rates higher than those charged by the mob, increase lines without the consumer asking and without their consent, and lure them into overextending. And we can count on the banks to act surprised when they aren’t paid back. Shame on them.

...

As a banker, let me describe what we do wrong when we accept and review an application for a credit card. First, we don’t verify income. The first ‘C’ of credit: Capacity to repay, is completely ignored by the banks, just as it was in when they approved subprime mortgages.

...

I’ve been reviewing many of the banks annual reports over the last month and there is no question that the default rates are on the rise. If Congress doesn’t act today, the bankers will have their hats in their hand before we know it, and doing another a tap dance before the Senate Banking Committee, and asking to be bailed out once again with our tax dollars. Sad, but true.

Comment: That "C" is important ... "Capacity to repay". People are being enslaved by debt. Our government (tax policies) punishes (disincents) savers and investors.

A Bachelor's in Borrowing

A Bachelor's in Borrowing

Excerpt:

As Americans curb their spending and battle to keep up with credit cards and mortgages, another type of debt is starting to overtake people: student loans. Although the U.S. has experienced economic downturns before, never has one converged with such high levels of student debt.

Total borrowing for school has more than doubled to $85 billion in the 2007-2008 school year from $41 billion 10 years earlier, adjusted for inflation, according to the College Board, the research and testing concern. The percentage of private loans, which generally carry less-generous terms, has ballooned to 23% from 7%. Meanwhile, subsidized federal aid has remained relatively flat at about $42.8 billion per year.

Comment: Schools activity encourage new student borrowing!

Car deals

Terri's Consumer Blog: Car Deals

Excerpt:

This weekend we’ve been reporting that six Denny Hecker dealerships closed. A third of Hecker’s employees are now out of work. It’s a tough time for many industries, but car dealerships are struggling to entice people to buy.


So I spoke with Phil Reed of Edmunds.com today to get his perspective. He said while this is bad news for the industry, it can be good news for consumers.


“Now is a great time to buy a car, especially if you can pay cash or have good credit. If you have a credit score of 700 you will have no problem securing a loan. If it’s more like 600 or below, you’ll need a bigger down payment,” said Reed.

Digital conversion ... it's simple!

Comment: Even your Grandmother can do it!

"Eventually"

Reaganomics Finally Trickles Down To Area Man

Excerpt:

Twenty-six years after Ronald Reagan first set his controversial fiscal policies into motion, the deceased president's massive tax cuts for the ultrarich at last trickled all the way down to deliver their bounty, in the form of a $10 bonus, to Hazelwood, MO car-wash attendant Frank Kellener.

"Back when Reagan was in charge, I didn't think much of him," Kellener, 57, said, holding up two five-dollar bills nearly three decades in the making. "But who would have thought that in 2007 I'd have this extra $10 in my pocket? He may not have lived to see it, but I'm sure President Reagan is up in heaven smiling down on me right now."

Leading economists say Kellener's unexpected windfall provides the first irrefutable proof of the effectiveness of Reagan's so-called supply-side economics, and shows that the former president had "incredible, far-reaching foresight."

"When the tax burden on the upper income brackets is lifted, the rich and not-rich alike all benefit," said Arthur Laffer, who was a former member of Reagan's Economic Policy Advisory Board. "Eventually."

Comment: Humor ... the Onion (need I say more!)

National debt charts

The gross national debt compared to GDP

An Analysis of the Presidents Who Are Responsible for the Borrowing

National Debt Clocks and Savings Clocks

Comment: The Bushes have been big spenders! Charts don't include bailout bucks from October and November.

A tawdry marketing gimmick

Dan Burrell: The Latest in Pastoral Challenges — 7 Days of Sex

Excerpt:

I personally find this kind of trendy, flavor-of-the-month, pop-psychology type of “religion” distasteful and immensely irritating. To me, this fits in with other “trends” in emergent-driven churches like wearing too much gel in one’s hair, wearing shirt tails out, giving away shot glasses with the church name on them out in bars, shocking signs (Flamingo Road Church recently had a huge banner on their building asking people to “Flip Someone the Bird” this Thanksgiving. It was part of a Thanksgiving food drive. Please excuse me while I roll my eyes.), Starbucks franchises in the lobbies, one-word church names and worship franchising. None of these, on their own are intrinsically evil or always unBiblical — it’s just that if I were an unsaved person watching all these gyrations to get me to give them some attention, I’d be laughing hysterically at the antics and the seeming desperation. In fact, I do laugh hysterically at it sometimes. Other times, I just throw up a little bit in my mouth.

Comment: God’s creation has managed to propagate without bill-boards, campaigns, and pulpit messages.

‘7 days of sex’ is a cheap marketing gimmick. I personally would not be comfortable worshiping with the kind of fools drawn into this.

HT: Dan Burrell

Have you watched the debt clock?

Comment: It was about 7 Trillion when I added the debt clock to my blog.

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit

Excerpt:

he U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

More information here.

Big Steel survived and thrived after bankruptcy

Is Steel’s Revival a Model for Detroit?

Excerpts:

... The old saying, “As steel goes, so goes the nation,” was as much a threat as a boast.

...

... steel’s savior was not the government bailouts it ardently sought but exactly what it so long tried to avoid: bankruptcy. Only when the companies failed were they successfully slimmed down and retooled into smaller but profitable ventures. As debate continues over what, if anything, should be done for G.M., Ford and Chrysler, the steel industry may offer a model.

The steel and auto industries are both capital-intensive enterprises that peaked a half-century ago and have been intermittently embattled ever since. Both secured peace with their unions by vastly expanding benefits, a bargain that eventually hobbled them. Both had entrenched layers of management that believed — despite all evidence — they could wish away change.

...
Over the decades the companies had shed employees to stay afloat. Soon retirees greatly outnumbered the actual workers. At Bethlehem, the ratio was six retirees for every worker. All these retirees had good pensions and good health care plans, which they thought were guaranteed. But these costs were a tremendous weight on the companies.

Bankruptcy changed the rules, allowing the steel makers to unload billions of dollars in pension obligations onto the government’s Pension Benefit Guaranty Corporation and to cut more than 200,000 workers from their supposedly guaranteed medical care.

...

Steel’s turn-around was dramatic. The 17 leading companies went from a combined loss of $1.1 billion in 2003 to an after-tax profit of $6.6 billion in 2004, according to an analysis done for an industry trade group. Ross sold International Steel to the Indian entrepreneur Lakshmi Mittal for $4.5 billion in 2005, earning a tremendous return.

...

In a G.M. bankruptcy, the number of product lines would be reduced, the management replaced and the investors wiped out. The enormous costs of its retirees could be off-loaded. It would be painful, just as it was with steel, but in the end someone could come in and pick up the pieces. Perhaps it would be one of the foreign carmakers, looking to expand. Perhaps it would be a distressed assets specialist, like Wilbur Ross.

Comment: A model for Detroit!

Citigroup: Risk management missteps

Citigroup Saw No Red Flags Even as It Made Bolder Bets

Excerpt:

In September 2007, with Wall Street confronting a crisis caused by too many souring mortgages, Citigroup executives gathered in a wood-paneled library to assess their own well-being.

There, Citigroup’s chief executive, Charles O. Prince III, learned for the first time that the bank owned about $43 billion in mortgage-related assets. He asked Thomas G. Maheras, who oversaw trading at the bank, whether everything was O.K.

Mr. Maheras told his boss that no big losses were looming, according to people briefed on the meeting who would speak only on the condition that they not be named.

For months, Mr. Maheras’s reassurances to others at Citigroup had quieted internal concerns about the bank’s vulnerabilities. But this time, a risk-management team was dispatched to more rigorously examine Citigroup’s huge mortgage-related holdings. They were too late, however: within several weeks, Citigroup would announce billions of dollars in losses.

Normally, a big bank would never allow the word of just one executive to carry so much weight. Instead, it would have its risk managers aggressively look over any shoulder and guard against trading or lending excesses.

But many Citigroup insiders say the bank’s risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings — and executives’ multimillion-dollar bonuses — failed to rein them in, these insiders say.

Comment: Internal controls, auditing, and fiscal transparency are essential!

Leaky water

Plumber’s Job on a Giant’s Scale: Fixing New York’s Drinking Straw

Excerpt:

All tunnels leak, but this one is a sieve. For most of the last two decades, the Rondout-West Branch tunnel — 45 miles long, 13.5 feet wide, up to 1,200 feet below ground and responsible for ferrying half of New York City’s water supply from reservoirs in the Catskill Mountains — has been leaking some 20 million gallons a day. Except recently, when on some days it has lost up to 36 million gallons.

Comment: Worthwhile read if you are interesting in civil engineering projects

Autos: The empty rhetoric of the Democrats

George Will: In Detroit, Failure's a Done Deal

Excerpts:

The answer? Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled, allowing the companies to try to devise plausible business models. Instead, advocates of a "rescue" propose extending to Detroit the government's business model for the nation — redistributing wealth from the successful to the failed, an implausible formula for prosperity.

...

Congress could help the Detroit Three by allowing them, when meeting CAFE (corporate average fuel economy) standards imposed by Congress, to count fuel-efficient cars they import from their overseas factories. Congressional Democrats oppose that because those imports are not made by members of the United Auto Workers. Those Democrats, their rhetoric notwithstanding, really care most about the union. "Saving the planet" comes second and last comes the health of the auto companies.


Some opponents of bankruptcy stress that it might terminate health-care coverage enjoyed by UAW retirees who are too young for Medicare. Think about that. If people want to retire before 65, or 35 for that matter, that is their business. But there is no public interest in protecting the luxury of retirement in the prime of life just because in palmy days a private contract between a union and a corporation established it as an entitlement for all seasons.

Comment: Again the CAFE standards!

Citigroup issues are not new

Woes at Citigroup Began With Failed Bid for Wachovia

Excerpts:

As the global financial crisis drove Wachovia toward collapse, the government frantically engineered their marriage. At a bargain price of $1 a share, Vikram S. Pandit, Citigroup’s chief executive, was happy to oblige: The deal would have greatly enhanced Citi’s retail banking presence and added more stable consumer deposits to a balance sheet staggered by billions in write-downs on bad mortgage loans and related securities.

But like so many other things for Citigroup over the last several years, it fell apart. Less than a week later, Wells Fargo, the powerful San Francisco-based bank, swooped in with a higher offer. Citi was left in the lurch, without a business that was vital to its future.

...

Many analysts argue that the globe-spanning conglomerate, largely built by Sanford I. Weill, had never really worked as a cohesive unit. Different divisions have consistently battled, and promised synergies between units have rarely emerged.

“They never spent the time, the money or the energy to integrate all of the businesses,” said Meredith Whitney, analyst at Oppenheimer. “And so the credit card business speaks Mandarin while the mortgage business speaks Cantonese. It’s not a functional family. And because it’s not a functional family, it’s extraordinarily expensive to operate all the separate businesses, and you don’t get any of the advantages.”

Many of these problems were masked during the credit boom this decade. But with the financial crisis in full swing, the bank’s failure to unite its empire has become more exposed than ever.

“A lot of the issues facing Citigroup are not new issues, they have simply grown greater in severity,” said Michael Mayo, an analyst at Deutsche Bank.

Comment: The failed to integrate their business lines and thus could not leverage their synergies.

11 Challenged ballots

Challenged ballots: You be the judge


Comment: Check this out!

Drop GM and C from DJIA

Kick GM out of the Dow...now!

Excerpt:

General Motors has a market capitalization of less than $2 billion. The stock, which now trades for a little under $3 a share, hit a 70-year low of $1.70 on Thursday morning before recovering a bit.

Normally, when a blue-chip company sinks to such depths of despair, it gets tossed from the S&P 500. But not only is GM (GM, Fortune 500) still a member of that index, it remains a component of the granddaddy of market barometers: the venerable Dow Jones Industrial average.

Why? Or in the words of mid-'90s self-help guru Susan Powter, "Stop the insanity!" The editors of The Wall Street Journal and Dow Jones Indexes, who decide who's in and who's out of the Dow, soon have to come to grips with reality and remove GM from the DJIA.

Comment: WFC should replace C. DJIA components

Half the news fit to print

California Asks Court to Weigh Ban on Gay Marriage

Excerpts:

The California attorney general asked the State Supreme Court on Monday to review the constitutionality of Proposition 8, the voter initiative passed two weeks ago that bans same-sex marriage.

The central argument in the recently filed lawsuits is that Proposition 8 is a significant enough revision to the State Constitution to require approval by the Legislature.

Supporters of the proposition, led by the group Protect Marriage, reject that argument, suggesting in legal papers filed Monday on behalf of five California residents that “when using the initiative process to amend the Constitution, the people exercise their sovereign power of self-government.”

What The Times Forgot to Mention about California’s Marriage Amendment

Excerpt:

Here’s what the paper that makes all the news fit its agenda forgot to mention:

• Same-sex marriage was never part of the California Constitution. It was forced on the state in May, by an edict of the same court now being asked to rule on the legality of Prop. 8.
  
• Despite massive opposition by the mainstream media (The New York Times included), the initiative passed by a vote of 52% to 48%.
  
• In 2000, 61% of California voters approved Prop 22, a statute limiting marriage to a man and a woman. The Court swept this aside with its mandate, necessitating the amendment.
  
• With the passage of ballot questions in California, Arizona and Florida this year, voters in 30 states have enacted constitutional bans on gay marriage, by an average vote of 68%.
  
• Those demonstrations by opponents of Proposition 8 the paper mentioned in passing are often aimed at the Mormon (Church of Jesus Christ of Latter-day Saints) and Catholic Churches and are frequently violent. In San Francisco last Friday, the police had to intervene to save a group of Christians who were set-upon by homosexual militants. In Palm Springs, an elderly woman holding a pro-Prop 8 sign was physically assaulted and had a cross ripped from her hands and trampled by the mob.
  

Comment: The title of this blog is a comments of the NY Times motto "All the News That's Fit to Print"

Man tries to pay bill with spider drawing

Man tries to pay bill with spider drawing


Comment: Didn't work for him and won't work for you! They did send it back to him!

Franken challenges this ballot

One challenge headed to the state so far in Plymouth


Excerpt:

The bubble beside Norm Coleman’s name appeared to have both an X and a squiggle in it, but the Al Franken campaign wants the state Canvassing Board to rule on whether it should count. That’s the only challenge in the special envelope in Plymouth so far, according to Sandy Engdahl, the city clerk and the official running the city recount.

The Canada geese milling on the grounds and parking lot of Plymouth City Hall were oblivious to the gaggle of election officials and observers inside. The drone of “Franken” and “Coleman” was accompanied by the swishing of paper in Medicine Lake Room A. Early on, Engdahl had to admonish some candidate representatives from trying to tell her counters how to count. Clearly, she said, the recount watchers are “very passionate,” but she has to remind them of everyone’s roles in this civic drama.

Eight of the 24 precincts had been counted by 1:45 p.m., and the only challenged ballot, in Engdahl’s view, was clearly a vote for Coleman. Nevertheless, the Franken campaign was allowed to seek a second opinion.

Comment: How a Franken representative might think this is not a Coleman vote is beyond me!

Wagoner is GM’s best salesman - and that's not saying much!

Mean Street: Why Everyone Hates GM: Pity the poor one million General Motors shareholders.

Excerpt:

the inconvenient facts of decades of declining Big Three market share and grotesque overcapacity. Only in the World of Wagoner could the industry be making “tremendous progress.”

If pressed for time, skip to the hearing’s third hour when Democratic Sen. Bob Menendez uncovers the “big lie” of a Detroit bailout. The $25 billion number is a fudge. It would only plug the hole for a few months. Mendendez was blunt. Detroit will soon be back hat in hand.

And Menendez is a sympathetic voice. Ouch. Next comes, Bob Corker, Republican from Tennessee and a no nonsense businessman. He is brutal. “GM is spiraling downward.” Chrysler has “barely a heartbeat.” “Which of the three should survive and which shouldn’t?”

Corker dares to point out what everybody knows but nobody will say. The entire American car industry is already bankrupt. One and maybe two companies will have to go. Industrial triage is inevitable. That’s the way business works.

Corker’s brilliant maneuver is to have the “impartial” Gettelfinger — whose UAW has fleeced all three — rank them by viability. Gettelfinger’s answer: Ford, then Chrysler, then last, GM.

Minutes later, Wagoner’s detached statesmanlike composure finally gives way. His face grows red. His voice rises. It’s clear just how desperate GM has become.

Chrysler CEO Bob Nardelli and Ford boss Alan Mullaly at least know how to grovel properly. Of course, they don’t carry the emotional baggage of a longtime Motowner like Wagoner.

Nardelli has been at Chrysler for just over a year. He knows Chrysler’s days are numbered and looks like a man who just wants out. Every time he has the floor, he reminds lawmakers of Chrysler’s “fragile” position. Oddly, for someone who took home hundreds of millions in a disastrous stint as Home Depot’s CEO, Nardelli can still elicit sympathy. That’s good salesmanship. He should be on a Chrysler lot.

As for Mullally, he makes it clear numerous times that Ford doesn’t even have to be in Washington asking for money. It’s the troubled, ne’er -do-well Rick Wagoner at the end of the table that’s bringing him there. “I’m here because GM is here,” Mullaly intones with aw-shucks brotherly love.

That, of course, is disingenuous. Mulally concedes that by 2010, without an upturn in the U.S. economy, even Ford will run out of money. Nor does he mention that Ford’s share price closed the day at less than two bucks.

Luckily for the Big Three, the Detroit bailout will be resurrected early next year when a new Congress and Barack Obama are sworn in.

Mulally and Nardelli will have a few months to brush up on their performances.

Wagoner may not be as lucky. His board can put up with a failure to turn a profit, but it probably won’t stand for his failure to bring money back from Washington. If this is GM’s best salesman, no wonder the company can’t move cars.

Comment: Interesting: UAW's triage

... the “impartial” Gettelfinger — whose UAW has fleeced all three — rank[ed] them by viability. Gettelfinger’s answer: Ford, then Chrysler, then last, GM.

Also interesting that these guys didn't corporate jet pool together. Three corporate jets flew them there. Ford's CEO private jets back and forth to Seattle every weekend!

Big Three auto CEOs flew private jets to ask for taxpayer money

"There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

"It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious."

He added, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it."

Mitt Romney: Let Detroit Go Bankrupt

Let Detroit Go Bankrupt

Excerpt:

I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

Comment: I agree with Mitt. Some Republicans see him as again flip/flopping: Already, Mitt?

Mac Hammond wins round # 1

Brooklyn Park megachurch smites IRS in info showdown

Excerpt:

A U.S. district magistrate judge's recommendation, issued Tuesday, sides with the Living Word Christian Center. The church had argued that it didn't have to provide detailed financial information focusing on the compensation of its founder and senior pastor, James (Mac) Hammond, requested by the IRS.

Earlier this year, the IRS petitioned the U.S. District Court to force the church to answer its demand for information. The church argued that the request wasn't made by a "high-ranking official" as required by law, and the magistrate judge agreed.

A U.S. District Court judge will decide whether to follow that recommendation.

Comment: I'm one who favors complete financial transparency. I think Churches should have to file 990 forms with the IRS like other non-profits. See previous Mac Hammond posts

Al-Qaida racist!

Al-Qaida No. 2 Insults Obama With Racial Epithet

Excerpt:

In al-Qaida's first response to Obama's victory, al-Zawahri also called the president-elect — along with secretaries of state Colin Powell and Condoleezza Rice — "house negroes."

Speaking in Arabic, al-Zawahri uses the term "abeed al-beit," which literally translates as "house slaves." But al-Qaida supplied English subtitles of his speech that included the translation as "house negroes."

Comment: They obviously have not read How to Win Friends and Influence People

The Big 3 should become the Big 2!

BofA CEO: There are '1 too many' Detroit 3 members

Excerpt:

Two of the struggling Detroit Three automakers should combine and prove to the government they are worthy of a $25 billion rescue package being considered for them, Bank of America Chief Executive Kenneth Lewis said Tuesday.

"There are one too many" automakers, Lewis said, adding that he would require consolidation if he was deciding on a bailout.

"I think the American people are suspect of just giving more money and buying more time," Lewis told reporters after a speech to the Detroit Economic Club. "They want to see that the companies have in fact changed and the strategies have changed."

Comment: There are too many brands. Eg. Ford does not need a Mercury. GM does not need GMC, Pontiac, or Saab, or Saturn (or Hummer). There are too many dealers as well.

Hitler rants: real estate, 401K, etc.

Comment: Hitler parody. Funny stuff

GM: Why chapter 11 is the solution & its Gigantic hybrid

A Bridge Loan? U.S. Should Guide G.M. in a Chapter 11

Excerpts:

G.M is using money so quickly that a $10 billion infusion made today would disappear by February. That is why taxpayers shouldn’t fork over a cent, at least until shareholders are wiped out, management is tossed out and the industry is completely reorganized.

But there is a fix. Call it a government-sponsored bankruptcy, a G.S.B., if you will. It might sound a bit like an oxymoron, but it is an idea that has been quietly making the rounds in Washington. It makes a lot of sense.

Here’s how it could work:

First, let’s recognize that G.M. doesn’t need life support. What it needs is Chapter 11. The bankruptcy process is not a bad thing — indeed, it should be embraced. Bankruptcy allows companies to do tough things they could never do in the normal course of business. It has helped many companies turn themselves around and come out even stronger.

Bankruptcy would give G.M. enormous leverage with its debt holders — and, perhaps more important, with the U.A.W., whose gold-plated benefits are one reason G.M. is no longer competitive. A bankruptcy filing would also give G.M. the cover to close plants, rid itself of unprofitable brands and shed dealerships. In fact, unless G.M. files for bankruptcy, state laws would make it prohibitively expensive to shut dealerships.

So, first, the government would force G.M into a prepackaged bankruptcy now — even before policy makers may think it needs to be. As an inducement, the government would allow the merger with Chrysler to go forward. (There’s a lot of resistance to saving Chrysler too, but we need to look at the industry as a whole. And don’t worry: Cerberus, the private equity firm that owns Chrysler, would have its equity wiped out too.)

The merger should reduce costs by as much as $7 billion. But that’s not the tough stuff. The harder decisions are these: Both companies would have to jettison brands — lots of them. In the case of G.M., frankly, the only ones worth saving are Cadillac, Chevy and Buick. (Buick? Yes. Despite its lackluster sales and fuddy-duddy image in the United States, it’s a huge seller in China.)

That means Saturn, Pontiac, GMC and Saab would all disappear. Deutsche Bank estimates that reducing G.M.’s brands from eight to three would bring down the company’s cost base by $5 billion annually. If you’re able to shut the dealerships too, lop off another $4 billion. Chrysler is an even sadder situation: the only brand with any value is Jeep. Its Dodge Ram truck lineup could be merged with Chevy, which would also pick up pieces of the GMC business. And Chrysler’s minivan business could be combined into the Chevy brand as well.

In all, the 35 plants of G.M. and Chrysler would probably be cut by half.

Then the auto workers, whose benefits are off the charts.

G.M. currently employs about 8,000 people who actually don’t come to work. Those who do go to work are paid about $10 to $20 an hour more than people who do the same job building cars in the United States for foreign makers like Toyota. At G.M., as of 2007, the average worker was paid about $70 an hour, including health care and pension costs.

That Rick Wagoner, chief executive of G.M., can say with a straight face that he still deserves to run this company is laughable. It would be impossible for him to put in place the serious changes that need to be made because he carries too much baggage. He’d have to undo years of his own neglect.

After all that is agreed, and only then, the government should come in with what’s known as debtor-in-possession financing to help the company through the bankruptcy process. Ideally, the government would be a “seed investor” and others would join it.

The goal should not be to keep these companies from filing Chapter 11, but from filing for Chapter 7 — which would mean liquidation.

With the debt market virtually closed, this is the time the government can come in and try to help. But to jump in front of the train now, without the requisite changes made to the industry first — which we all know can’t be done without Chapter 11 — would be foolish.

Behind the Wheel | 2009 Cadillac Escalade Hybrid: My Hybrid Is Bigger Than Your Hybrid

Excerpt:

I managed to eke out 22.3 miles a gallon on one highway-biased trip, and about 20 m.p.g. over all. The hybrid system’s benefit is most pronounced in urban driving, where Cadillac claims a 50 percent improvement in fuel economy. (The gas-only Escalade is rated 12 m.p.g. in town, 18 on the highway, with all-wheel drive.)

Bizarrely, the Environmental Protection Agency does not provide mileage estimates for the four-wheel-drive Escalade Hybrid because its weight vaults it into the category of heavy-duty trucks, which need not be rated.

This is like McDonald’s adding a low-fat burger that has no calorie count because the F.D.A. says it’s too big to be classified as food.

...
The total as-tested tab was $75,330, although you get a $2,200 federal hybrid tax credit unavailable to the wastrel who instead buys a Honda Fit.

Comment: The US should provide tax credits (if we do at all) for people to buy small cars! I doubt I know one person who could afford the Cadillac Giganticus

GM vs Toyota labor costs

Comment: Below is a link from NPS that compares GM to Toyota. The data is not current (c 2005), but highlights one of the real issues with GM - the high cost of labor.

NPR: GM vs. Toyota: By the Numbers

Excerpts:

Profitability per Vehicle

GM: Loses $2,331 per vehicle
Toyota: Makes $1,488 per vehicle


Production Time per Vehicle

GM: 34.3 hours, 2.5% improvement since 2003
Toyota: 27.9 hours, 5.5% improvement since 2003


Average Hourly Salary for Non-Skilled, Assembly Line Worker

GM: $31.35/hour (NOTE: Includes idle workers still on payroll.)
Toyota: $27/hour (NOTE: Includes year-end bonus.)


Average Labor Cost per U.S. Hourly Worker

GM: $73.73
Toyota: $48

Comment: Unless GM (and Ford and Chrysler) AND the U.A.W. deal with labor costs, no amount of bailout money will help them.

The South is Detroit's automotive rival

Comment: an interesting perspective that I had not previously considered.

An emerging Southern view of the Detroit bailout

Excerpts:

The jet-black, $37,500 Borrego sports utility vehicle showed up in the governor’s Capitol parking spot last month, a gift to the state from the South Korean car maker - which is now building a $1.2 billion plant in west Georgia.

...

In its own way, the governor’s new ride may be as meaningful as the demolition of the Ford plant in Hapeville, or the abandonment of the General Motors plant in Doraville.

For behind the philosophical back-and-forth over government intervention, scheduled to begin Monday in the U.S. Senate, is a cut-throat, economic reality: the South has ambitions of becoming Detroit’s rival.

And a federal dollar that artificially props up manufacturing on the northern end of I-75 is a dollar that hinders the creation of new economic models downstream, some Southern politicians maintain.

Last week, Gov. Mark Sanford of South Carolina argued that the refusal of the federal government to bail out the Pittsburgh-based steel industry in the 1970s ultimately led to the establishment of new steel mills in the South. Which permitted the birth of a new facet of the auto industry - highly automated, mostly non-union, and foreign-owned.

“There wouldn’t be a BMW in South Carolina or a whole host of other auto industries scattered across the South, because we would have just kept them all in Detroit,” the Republican said.

Georgia’s Kia plant is scheduled to open next November, employing as many as 2,500 workers. The site is located within U.S. Rep. Lynn Westmoreland’s 3rd District. Westmoreland, like other House Republicans, voted against the $700 Wall Street bailout.

He’ll vote against a Detroit rescue as well - on the grounds that it would create a slanted field of play for the workers he’ll soon represent.

Recession half way over?

Forecasters: U.S. in 14 month recession

Excerpt:

... the U.S. economy entered a recession in April and that it will last 14 months, which would make it one of the longest recessions since the Great Depression of the 1930s.

Comment: Doesn't sound too bad!

"It's a recession when your neighbor loses his job; it's a depression when you lose your own." Harry S Truman

"Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his." Ronald Reagan

Another Reagan quote (that would apply it seems to GM, Ford and Chrysler): "Government's view of the economy could be summed up in a few short phrases If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it"

Yet another that would apply to President-Elect Obama's plans (for large government): "Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other."

The U.A.W.: the enemy of turning around the Big Three

Comment: The Big Three is more like the Big One (GM), the Half Pint (Ford), and the Dwarf (Chrysler).

Seeking Aid, Automakers Have a Friend in the U.A.W.

Excerpts:

Ron Gettelfinger, president of the United Automobile Workers union says:

“It’s not just G.M. going bankrupt, ... It’s all the rest of the industry that goes with it. Two of the three companies would go under, and there’s a high probability all three would go.”

The problem (high wages relative to Honda, Nissan, Toyota - even in the US where these "foreign" makers have plants!):

Mr. Gettelfinger expects the union to be labeled part of Detroit’s problems, and to defend its $27-an-hour wages and top-of-the-line health care benefits and pensions.

...

... union rules that provide workers with 95 percent of their wages while on layoff and other job-security provisions.

The Future of the U.A.W. is at stake.

“The future of the U.A.W. will be determined over the next two weeks,” said Gary N. Chaison, a professor of labor relations at Clark University. “If G.M. goes bankrupt or doesn’t get a bailout, it’s just going to be a shadow of what it was 50 years ago.”

Why the Democrats care so much (and the Republicans so little!):

The U.A.W. was instrumental in the pivotal victories in Michigan and Ohio by Barack Obama in the presidential election, and two union loyalists in Michigan, Gov. Jennifer M. Granholm and former Representative David E. Bonior, are members of Mr. Obama’s economic advisory team.

Why bankruptcy of GM is better than a bailout:

A carmaker’s bankruptcy would abrogate workers’ contracts

Final comment: A bailout of GM would not solve the seminal problems: high labor costs, rigid Union rules, and bad management.

GM's "ripple" video

Multiple views on Detroit bailout

If Detroit Falls, Foreign Makers Could Be Buffer

Excerpts:

many industry experts say the big foreign makers are established enough to take control of the industry and its vast supplier network more quickly than is widely understood.

“You would have an auto industry in the United States more like that of Mexico and Canada: foreign-owned,” said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich., which describes itself as a nonprofit organization that has “strong relationships with industry, government agencies, universities, research institutes, labor organizations” and other groups with an interest in the auto business.

The transition to that new equilibrium would surely be painful. The big American companies employ about 240,000 workers, and their suppliers an additional 2.3 million, amounting to nearly 2 percent of the nation’s work force.

The outright failure of General Motors would eliminate the biggest auto employer and more than 100,000 manufacturing jobs. That is roughly the number of jobs already lost this year at the nation’s automakers and their suppliers.

...

the new kings of the auto industry would presumably be Toyota, Honda, Nissan, Volkswagen, Ford, Mercedes-Benz, BMW and Hyundai-Kia. (Volkswagen has not yet opened a plant in the United States, and BMW and Hyundai each have one plant.)

Like the Big Three, they would together dominate manufacturing in the United States, becoming big customers for steel, aluminum, plastics, glass, machine tools, computer chips and rubber.

UAW head says that unions aren't to blame for Detroit's problems

Excerpt:

Rather than admit that the UAW's plum labor agreements and contentious negotiations have contributed to the current gloomy situation, the United Auto Workers head man says that the economic downturn is to blame for everything, and that Congress should approve loans to the auto industry, saying "We cannot afford to...see this industry collapse."

An America without manufacturing becomes a starkly divided society

Excerpt:

I am a black child of the Deep South who watched legions of neighbors and relatives flee economic apartheid in pursuit of opportunity in the automobile factories of Michigan and Ohio and in the steel plants of Pennsylvania and Indiana.

Those black men and women often were assigned the dirtiest, most dangerous, least desirable jobs in those factories. But if whites happened to be working alongside them, they tended to be paid equally for the same tasks. There was hope for the future in that treatment, a quantum of dignity.

That hope and dignity eventually became codified in contracts between the car companies and the United Auto Workers union, as it did between other manufacturing entities and their labor organizations.

But, alas, hope and dignity were corrupted by greed on both sides -- on the part of unions that always wanted more, and on the part of domestic car companies, which became more interested in building Wall Street portfolios than they were in turning out cars and trucks of superior quality.

People make mistakes. But redemption is found in the good that they do, and the domestic automobile industry has done a lot of tangible good for this nation.

The American Three -- General Motors, Ford and Chrysler -- largely have been responsible for the development of a black middle class in this country. Many children of factory workers followed their parents onto automobile assembly lines. But many others went to colleges and universities, medical and technical schools, thanks to good UAW salaries and educational benefits.

Comment: Interjecting race into the auto bailout issue. Keep race out of it!

G.O.P. Senators Oppose Auto Bailout

Excerpts:

Top Republican senators said Sunday they will oppose a Democratic plan to bail out Detroit automakers, calling the U.S. industry a “dinosaur” whose “day of reckoning” is coming. Their opposition raises serious doubts about whether the plan will pass in this week’s postelection session.

...

Senators Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers. They said an auto bailout would only postpone the industry’s demise.

“Companies fail every day and others take their place. I think this is a road we should not go down,” said Mr. Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee.

“They’re not building the right products,” he said. “They’ve got good workers, but I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur in a sense.”

Mr. Kyl, the Senate’s second-ranking Republican, added, “Just giving them $25 billion doesn’t change anything. It just puts off for six months or so the day of reckoning.”

Comments: Good to see the GOP offer some common sense. Recent "innovations" of the big three: Hummer, the new Camaro, the new Dodge Challenger, the Chevrolet Avalanche. My own conclusion: let GM file for chapter 11. Let them innovate through restructuring.

Petters: red flags unheeded

Petters Co.: Many watchers, but no one watching

Excerpts:

Among the red flags that went unseen or unheeded: fake inventory statements, dummied invoices, millions of dollars wired to an office next to an Excelsior car wash, suspicious bank account activity and Petters himself, a flamboyant executive trailing decades of lawsuits over bad debts.

But apparently authorities suspected nothing until a Petters executive, Deanna Coleman, approached federal investigators in September to accuse her longtime boss of fraud and to cut herself a deal.

...

Petters Company Inc., the investment arm central to the alleged fraud, was run by a small group operating separately from the Petters Group Worldwide holding company. But they shared the same building in Minnetonka, and Tom Petters was their sole director. Both companies were placed into a receivership last month after a federal judge found probable cause to believe that more than $3 billion had been bilked from investors.


...

What is known is that key Petters companies appear to have been operating without the most basic of business documents -- the certified financial statement, or annual outside audit. A certified financial statement is prepared by an outside public accounting firm. It's considered a basic stamp of credibility. Privately owned businesses aren't required to have them, but financial professionals insist that no prudent investor or lender would do business with a company lacking them.

...

The professional rules of conduct governing both in-house accountants and lawyers don't require them to go outside the company to report illegal activity if they see it. The rules simply require them to report wrongdoing up the internal chain of command. Nonetheless, Neil Hamilton, who teaches legal ethics at the University of St. Thomas law school, said accountants and lawyers have a fiduciary duty to the public.

Comment: Board members of private organizations (churches, non-profits, and private businesses) should demand full auditing of all financial records. For churches: full audited financial statements (income and expense and balance sheet) should be provided members; For non-profits: full audited financial statements (income and expense and balance sheet) should be provided to supporters / donors; etc.

Jim DeMint: They corrupted the brand

GOP senator: McCain betrayed Republican principles

Excerpts:

"We have to be honest, and there's a lot of blame to go around, but I have to mention George Bush, and I have to mention Ted Stevens, and I'm afraid I even have to mention John McCain," he said.

...

1. "McCain, who is proponent of campaign finance reform that weakened party organizations and basically put George Soros in the driver's seat," DeMint said. "His proposal for amnesty for illegals. His support of global warming, cap-and-trade programs that will put another burden on our economy. And of course, his embrace of the bailout right before the election was probably the nail in our coffin this last election. And he has been an opponent of drilling in ANWR, at a time when energy is so important. It really didn't fit the label, but he was our package."
   
2. [on Bush] ... "corrupted the party brand by expanding the size of government and engaging in wasteful government spending"
   
3. [on Stevens] ... DeMint said he would introduce a Senate resolution next week to boot Stevens out of the Republican caucus
   

Comment: I think he is right!

Auto bailout: Pelosi's non-starter

Pelosi outlines aid package for US automakers

Excerpt:

Pelosi said the plan would call for "immediate, targeted assistance" and must include several principles, including the restructuring of the companies "to ensure their long-term economic viability," new fuel-efficiency standards, and the development of advanced vehicles.

She said it would include "even stronger limits on executive compensation and assurances to protect the taxpayer." House aides said the legislation was still being developed and a specific funding level had not yet been reached.

Pelosi did not mention any plans for the UAW to make any concessions as part of the legislation. UAW president Ron Gettelfinger told reporters earlier Saturday the problem is not the union's contract with the auto companies.

"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger said. The union has said it made several concessions in its 2007 labor agreement, setting lower pay for new hires and placing retiree health care liability into a trust run by the UAW.

Comment: Unless labor is addressed ... it isn't a solution at all. Don't expect Nancy Pelosi to address labor. I hope that Bush does nothing and lays this mess on Obama!

Where are PanAm, ITT and Montgomery Ward?

Bailout to Nowhere

Excerpt:

Not so long ago, corporate giants with names like PanAm, ITT and Montgomery Ward roamed the earth. They faded and were replaced by new companies with names like Microsoft, Southwest Airlines and Target. The U.S. became famous for this pattern of decay and new growth. Over time, American government built a bigger safety net so workers could survive the vicissitudes of this creative destruction — with unemployment insurance and soon, one hopes, health care security. But the government has generally not interfered in the dynamic process itself, which is the source of the country’s prosperity.

...

Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

Comment: Where are PanAm, ITT and Montgomery Ward? GONE! Remember the Frank Borman quote. Borman was formerly the CEO of Eastern Airlines (also GONE!)

Putting the Iraq war in perspective

Marine motorcycle deaths top their Iraq combat fatalities

Excerpt:

Motorcycle accidents have killed more Marines in the past 12 months than enemy fire in Iraq, a rate that's so alarming, it has prompted top brass to call a meeting to address the issue, officials say.

Twenty-five Marines have died in motorcycle crashes since November -- all but one of them involving sport bikes that can reach speeds of well over 100 mph, according to Marine officials. In that same period, 20 Marines have been killed in action in Iraq.

The 25 deaths are the highest motorcycle death toll ever for the Marine Corps.

Gen. James Amos, the assistant commandant of the Marine Corps, told CNN that commanders are trying to drill down on what "we need to do to help our Marines survive on these sport bikes."

Comment: Recommended to me by my son, who served in the USMC for 6 years including 1 tour in Iraq. From Roger, "I think this puts the war in Iraq into perspective."

Path to growth: ""free markets and free people"

The Surest Path Back to Prosperity

Excerpts:

This crisis did not develop overnight, and it's not going to be solved overnight. There's going to be difficult days ahead.

...

History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market. We saw this in the case of Fannie Mae and Freddie Mac.

Because these firms were chartered by the U.S. Congress, many believed they were backed by the full faith and credit of the U. S. government. Investors put huge amounts of money into Fannie and Freddie, which they used to build up irresponsibly large portfolios of mortgage-backed securities. When the housing market declined, these securities, of course, plummeted in value. It took a taxpayer-funded rescue to keep Fannie and Freddie from collapsing in a way that would have devastated the global financial system. There is a clear lesson: Our aim should not be more government -- it should be smarter government.

All this leads to the most important principle that should guide our work: While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.

Iceland: "Voices of caution ... were drowned out"

Iceland: What It's Like to Live in a World Without Money

Excerpts:

There is no daytime TV in Iceland. Parents are at work and children at school, so the test card, that feature of a bygone age, is the only thing aired. For the transmitters to be switched on in mid-afternoon and a sombre-looking Geir Haarde, the prime minister, to appear behind a desk, a national flag at his side, it had to be serious – and it was. The country was on the verge of bankruptcy; the government was taking control of the banks and was going to assume far-reaching powers to secure the safety of the nation and its savers.

As I watched, I felt a detached sympathy for those poor people living on a blighted island – until it dawned on me that I was one of them. Recent events had savaged my net worth by 60 per cent and pushed up my cost of living by more than 20 per cent. Iceland’s plight was mine, too. What I failed to appreciate at the time was the emotion of this unprecedented television address, particularly in the way it finished:

“Fellow countrymen ... If there was ever a time when the Icelandic nation needed to stand together and show fortitude in the face of adversity, then this is the moment. I urge you all to guard that which is most important in the life of every one of us, to protect those values which will survive the storm now beginning. I urge families to talk together and not to allow anxiety to get the upper hand, even though the outlook is grim for many. We need to explain to our children that the world is not on the edge of a precipice, and we all need to find an inner courage to look to the future ... Thus with Icelandic optimism, fortitude and solidarity as weapons, we will ride out the storm.

...

Picture a pig trying to balance on a mouse’s back and you’ll get some idea of the scale of the problem. In a mere seven years since bank deregulation and privatisation, Iceland’s financial institutions had managed to rack up $75bn of foreign debt. In his address to the nation, Haarde put the problem in perspective by referring to the $700bn financial rescue package in America: “The huge measures introduced by the US authorities to rescue their banking system represent just under 5 per cent of the US GDP. The total economic debt of the Icelandic banks, however, is many times the GDP of Iceland.”

And here is the nub. Iceland’s banks borrowed more than $250,000 for every man, woman and child in Iceland, and placed an impossible burden on the modest reserves of the central bank in the event of default. And default they have.

Voices of caution – there were many in Iceland – were drowned out by a media that became fixated on the nation’s emergence from drab pupa to gaudy butterfly

Comment: Iceland today could be the US in a decade!

Beggar Nation

U.S. cities seek federal help to ease economic crisis

Excerpt:

Three major American cities buffeted by the global financial crisis are requesting at least $50 billion in federal funds to help pay for infrastructure improvements, pensions and short-term borrowing.

Philadelphia, Phoenix and Atlanta are asking U.S. Treasury Secretary Henry Paulson to release funds from the $700 billion financial bailout authorized by Congress last month.

Philadelphia Mayor Michael Nutter will hand-deliver the request to Paulson on Friday, spokesman Luke Butler said. Five or six other cities, including Chicago, may also sign on, Butler added.

Congress set up the so-called Troubled Asset Relief Program to help banks and other institutions that were ensnared in the global credit crisis. But since President George W. Bush signed the bill into law, numerous other entities, including the U.S. auto industry, have lined up for help.

In recent weeks, some cities have announced layoffs and service cuts as slumping tax receipts create budget shortfalls. Philadelphia, for example, will eliminate hundreds of jobs and shut libraries and swimming pools to close a $108 million gap in its current $4 billion budget.

"We who run some of America's larger cities are dealing with the economic damage wrought by the credit and housing crises," the mayors' letter to Paulson said.

"The economic contraction precipitated by these twin crises is forcing us, and mayors all over the country, to dramatically reduce programs and services for millions of residents."

Participating cities are asking Paulson to set up a $50 billion fund to rebuild infrastructure.

The fund would consist of $25 billion in grant money for cities that are unwilling or unable to take on debt, and another $25 billion for loans to cities at an interest rate of 50 basis points above that of 30-year Treasury bonds.

Comment: It's always easy to spend someone else's money. I'm surprised Washington DC isn't lined up for a handout. Image from http://deanhunt.com/a-marketing-lesson-from-two-beggars/

Handout Nation (now it's Detroit)

City Council: Detroit needs $10-billion bailout

Excerpt:

The Detroit City Council passed a resolution today calling for a $10-billion bailout for the city of Detroit.

Council President Pro Tem JoAnn Watson sponsored the resolution to use the money for public service employment, to fund mass transit plans and to place a moratorium on home foreclosures for two years.

The resolution specifically requests the council meet with Mayor Ken Cockrel Jr., Gov. Jennifer Granholm, the state’s congressional delegation, U.S. House Speaker Nancy Pelosi and officials from President George W. Bush’s office and President-Elect Barack Obama’s transition team.

Comment: Everyone seems to have their hand out!

Is Bankruptcy in the Auto Industry Really So Bad?

Is Bankruptcy in the Auto Industry Really So Bad?

Excerpt:

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.

Although G.M.’s labor contracts would be at risk of termination in a bankruptcy, setting up a potential confrontation with its unions, the company says its pension obligations are largely financed for its 479,000 retirees and their spouses.

Shareholders have already lost much of the equity that would disappear in a bankruptcy case. Shares of G.M. rose 16 cents Wednesday, to $3.08, but they have fallen 90.5 percent over the last 12 months, amid sharply lower auto sales and fears about G.M.’s future.

And as companies in industries like airlines, steel and retailing have shown, bankruptcy can offer a fresh start with a more competitive cost structure to preserve a future for the workers who remain.

“Just let market forces play out,” said Matthew J. Slaughter, associate dean at the Tuck School of Business at Dartmouth. “And if G.M. or one of the other companies files for bankruptcy, support the workers and the communities that would affected by a bankruptcy filing.”

William Ackman, a prominent activist investor who runs Pershing Square Capital, said Tuesday that G.M. should consider bankruptcy. “The way to solve that problem is not to lend more money to G.M.,” he said in an interview with Charlie Rose on PBS.

Instead, G.M. should submit a prepackaged bankruptcy, laying out steps it plans to enact once in Chapter 11 protection, said Mr. Ackman, who is not a major holder of G.M. shares.

“I’d rather the government’s money be used to train people for other jobs,” Mr. Ackman said. “The bankruptcy word scares people. It’s simply a system.”

Comment: Better than a bailout with no restructuring of labor costs.

What to do about autos?

Comment: 3 views:

1. Let 'em fail to "restore realistic, competitive, market wages to the industry"
   
2. Nationalization
   
3. Tax incentives on all new-car sales
   

View # 1: Let 'em fail

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Excerpt:

Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM (GM), Ford (F) and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?

Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda (HMC) and Volkswagen (VLKAY.PK) take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.

View # 2: "Nationalization"

A Radical Solution for U.S. Auto Makers

Excerpt:

Automakers want a bail out because they’re burning cash at phenomenal rates, but they have no meaningful plans for how, exactly, they’re going to turn things around. What good is a bailout if there is absolutely no opportunity for a turnaround? Detroit will never compete with foreign owned manufacturers. They simply do it better, faster, and cheaper. There is no way Detroit can shed its ugly legacy of high costs, slow market response and white-collar fat. Let’s admit that.

On the other side of the coin, there is strong, albeit idealistic, talk about creating an energy-independent America and weaning ourselves from fossil fuels. Rather than debate about the future of the Big Three, let’s look at this situation from a radical perspective. Well, as radical as capitalism, with a kick in the pants from the government. Which, in case any of us have forgotten, is representative of the people, by the people and for the people. So here’s a “peoplespeak” solution.

...

So here’s the plan: implement a plan that virtually nationalizes the US auto industry. If everyone is talking about bailing out US automakers because they’re a “can’t fail,” we’re already talking about virtual nationalization. We’re looking at an outdated, uncompetitive industry with high costs and an unbelievably slow to market response time. So if the US were to provide billions to the auto industry to prop it up, what new value proposition would we actually have? The same old companies, doing the same old thing, and when all is said and done, they would still not be able to muster a cost-effective, high quality alternative to their competitors.

Comment: I'm sure there are other ones. I don't like "nationalization". The first seems, ah hum, a little harsh. Pouring billions into these industries without radical restructuring makes no sense however. Another idea below:

Senator calls for tax incentives on all new-car sales

Senator Barbara Mikulski of Maryland thinks that the economic panic can be partially abated by allowing buyers of new vehicles to deduct auto loan interest, fees, and sales tax related to the purchase of a new car from their income tax. The proposed initiative would run from now through the end of 2009, and is only for families earning less than $250,000, or individuals making $125,000.

Rhinovirus size

Comment: Cool graphic. Just getting over a cold, I appreciate the punch that a virus has! Click "start the animation ... "

How Big is a ... ?

The head of a pin is about 2mm in diameter. Use this animation to compare the relative sizes of cells and organisms sitting on a pinhead. Nearly invisible without magnification, dust mites dwarf pollen grains and human cells. In turn, bacteria and viruses are even smaller.

Rhinovirus

Excerpt:

Rhinovirus (from the Greek rhin-, which means "nose") is a genus of the Picornaviridae family of viruses. Rhinoviruses are the most common viral infective agents in humans, and a causative agent of the common cold.

Hard times for debt collectors!

Even Debt Collectors Have Hit Hard Times

Excerpt:

This should be the best of times for America's debt collectors, since never has a society been so in hock. But ironically, much of the debt-collection industry is struggling because there's little cash left to squeeze from strapped consumers.

"People joke with me that my business must be great," said Mark Neeb, president of Affiliated Group, an Omaha, Neb., collection agency. "I would say the opposite is true. Our business flourishes when the consumer has money."

Comment: Wouldn't think so would you! Can't "Squeeze blood out of a turnip"

Ron Paul calls Republicans to return to roots

Commentary: GOP should ask why U.S. is on the wrong track

Excerpt:

Opportunity abounds for anyone who can present the case for common sense in fiscal affairs, for protection of civil liberties here at home, and avoiding the senseless foreign entanglements which have bogged us down for decades and contributed so significantly to our fiscal and budgetary crisis.

During the debates in the Republican Presidential primary, even though I am a 10-term sitting Representative Member of Congress, I was challenged more than once on my Republican credentials. The fact that I was repeatedly asked how I could be a Republican when I was talking a different language than the other candidates answers the question of how the Republican Party can slip so far so fast.

My rhetorical answer at the time was simple: Why should one be excluded from the Republican Party for believing and always voting for:

• Limited government power
  
• A balanced budget
  
• Personal liberty
  
• Strict adherence to the Constitution
  
• Sound money
  
• A strong defense while avoiding all undeclared wars
  
• No nation-building and no policing the world
  

How can a party that still pretends to be the party of limited government distance itself outright from these views and expect to maintain credibility? Since the credibility of the Republican Party has now been lost, how can it regain credibility without embracing these views, or at least showing respect for them?

I concluded my answer by simply stating the Republican Party had lost its way and must reassess its values. And that is what needs to be done in a hurry.

Comment: A voice crying in the wilderness that should be heeded!

Spoof NYTimes

Liberal Pranksters Hand Out Times Spoof

Excerpt:

In an elaborate hoax, pranksters distributed thousands of free copies of a spoof edition of The New York Times on Wednesday morning at busy subway stations around the city, including Grand Central Terminal, Washington and Union Squares, the 14th and 23rd Street stations along Eighth Avenue, and Pacific Street in Brooklyn, among others.

The spurious 14-page papers — with a headline “IRAQ WAR ENDS” — surprised commuters, many of whom took the free copies thinking they were legitimate.

The paper is dated July 4, 2009, and imagines a liberal utopia of national health care, a rebuilt economy, progressive taxation, a national oil fund to study climate change, and other goals of progressive politics.

Comment: www.nytimes-se.com (may time some time to load! Note: "liberal utopia" where their is complete peace and socialism

Iraq War Revisionism and the American Left

Liberals Try To Rewrite Lead-up To Iraq War

Excerpts:

Many Americans today take the idea that the Iraq War was a terrible mistake as an axiom. It has become distressingly commonplace to hear of President Bush's "lies" in making the case for war, that the reasons for invading Iraq were flimsy and circumstantial or worse, outright deceptive. President-elect Barack Obama rode his early opposition to the war all the way to the Democratic nomination against New York Sen. Hillary Clinton, who refused to recant her vote in favor of the war.

History is being rewritten before our eyes.

It wasn't known, it must be remembered, until after the war against Saddam Hussein's regime had concluded, that weapons of mass destruction would not be located in Iraq. Hussein's ownership of such weapons wasn't exactly a contested point before the war; even the governments of countries that opposed military action, including France, Russia and Germany, believed that Iraq possessed stockpiles of chemical and biological weapons and made statements to that effect.

Already in violation of the original Gulf War truce, Iraq's regime routinely defied round after round of United Nations-sponsored resolutions, culminating in an ultimatum in Security Council Resolution 1441 demanding that Saddam comply with his obligations or face "serious consequences" -- diplomatic language for war. President Clinton embraced a policy of regime change toward Iraq in the late 1990s by signing the bipartisan Iraq Liberation Act into law and would go on to use Iraq's weapons program as a justification for bombing the country. It is an utter farce to proclaim that any rational political figure was harboring any doubts about the existence of Saddam's weapons programs.

...

Ever sinceHussein became president of Iraq, he'd initiated war against his neighbors (until a U.S.-led coalition put a stop to it), first against Iran and then against Kuwait and in the grimmest of ways. We speak here of a man who, according to reports, had his agents give his opponents acid baths during the Gulf War, of a man who attempted ethnic cleansing against his own people, of a man whose own bureaucrats would systematically round up and murder political dissidents. Why have human rights groups not hailed the Iraq War as long overdue?

The answer is that modern anti-war activists are in the deranged state of mind that tells them that they can't opposeHussein if Dick Cheney also opposes him. Their moral outrage is reserved for the Republican Party, rather than for a dictator who slaughtered his own people, defied treaties, granted Islamic terrorists safe harbor and sparked international aggression.

According to news reports coming out of Iraq -- the monthly American casualties in Iraq are now down to single digits, the Maliki government is meeting many of the political checkpoints set up for it, and the Iraqi people have embraced freedom. The obstacles are falling down one by one. Will the final obstacle -- left-wing revisionism in the United States -- finally fall, too?

Comment: Entire editorial is a worthwhile read. We hear so much about "the failed policies" of the Bush administration!

Obama, the "Volt", and you

Obama's Car Puzzle

Excerpts:

[The Volt] is a car that, by GM's own admission, won't make money. It's a car that can't possibly provide a buyer with value commensurate with the resources and labor needed to build it. It's a car that will be unsalable without multiple handouts from government.

The first subsidy has already been written into law, with a $7,500 tax handout for every buyer. Another subsidy is in the works, in the form of a mileage rating of 100 mpg -- allowing GM to make and sell that many more low-mileage SUVs under the cockamamie "fleet average" mileage rules.

Even so, the Volt will still lose money for GM, which expects to price the car at up to $40,000.

We're talking about a headache of a car that will have to be recharged for six hours to give 40 miles of gasoline-free driving.

...


Hardly mentioned is the fact that gasoline goes bad after a few months. If the Volt is used as intended, for daily trips of 40 miles or less, the car's tank will have to be drained periodically and the gas disposed of.

...

If consumers really wanted green cars, no mandate would be necessary. Washington here is just marching Detroit deeper into an unsustainable business model, requiring ever more interventions in the future.

The Detroit Three will not bounce back until they're free to buy labor in a competitive marketplace as their rivals do. In the meantime, private money, even in bankruptcy, almost certainly will not be available to refloat GM and colleagues. Nationalization, with or without a Chapter 11 filing, is probably inevitable -- but still won't make them competitive.

...

The simplest step forward would be to get rid of the "two fleet rule," devised by Congress's fuel-mileage managers to keep Detroit making small econoboxes in high-cost UAW factories. Dumping the rule would force the UAW to compete directly inside each company for jobs against cheaper workers abroad.

Even better would be to dump CAFE altogether. If Congress really thinks consumers must be encouraged to use less gas, replace it with an intellectually honest gas tax. Mr. Obama promised to transcend the old stalemates -- let him begin with the 30-year-old fraud that our fuel-economy rules represent.

He ran a brilliant campaign, but his programmatic prescriptions amounted to handwaving designed to capture the presidency rather than tell voters what really to expect. This may have been a virtue in campaigning but it becomes a handicap in governing.

Comments:

1. Obama: He ran a brilliant campaign, but his programmatic prescriptions amounted to handwaving designed to capture the presidency rather than tell voters what really to expect.
   
2. The Volt: a car that can't possibly provide a buyer with value commensurate with the resources and labor needed to build it.
   
3. You: If consumers really wanted green cars, no mandate would be necessary
   

More: I want "a green car". While I am 2 or 3 years off from replacing my sedan, I have my eye on a Prius. I'm (below) one of the skeptics that doubt that GM will survive - even with bailout money! It's the "don't chase good money after bad" argument.

Skeptics Present Another Obstacle for GM - Politicians, Analysts Doubt Firm's Ability to Effect Turnaround

The effort by General Motors Corp. to secure a federal bailout faces an overlooked hurdle: skeptical politicians, policy makers and industry analysts who don't think the world's largest auto maker is capable of turning itself around.

"Detroit has had a lot of time to understand what it takes to compete. They wouldn't stand up to the labor-union bosses, and now they're facing the consequences," said Rep. Jeb Hensarling, a three-term Texas congressman and chairman of a group of fiscally conservative Republicans. "We can't be in the business of picking winner and losers. What's next, the airlines? What about Starbucks or ....

Auto bailout won't address Detroit's fundamental problems

Nationalizing Detroit

Excerpt:

In the Washington mind, there are two kinds of private companies. There are successful if "greedy" corporations, which can always afford to pay more taxes and tolerate more regulation. And then there are the corporate supplicants that need a handout. As the Detroit auto makers are proving, you can go from being the first to the second in the blink of an election.

For decades, Congress has never had a second thought as it imposed tighter emissions standards on GM, Ford and Chrysler, denouncing them for making evil SUVs. Yet now that the companies are bleeding cash, and may be heading for bankruptcy, suddenly the shrinking Big Three are the latest candidates for a taxpayer bailout. One $25 billion loan facility has already been signed into law, and Senator Debbie Stabenow (D., Mich.) wants another $25 billion, this time with no strings attached.

....

We hope Messrs. Bush and Paulson just say no. The Tarp was intended to save the financial system from collapse, not to be a honey pot for any industry running short of cash. The financial panic has hit Detroit hard, but its problems go back decades and are far deeper than reduced access to credit among car buyers. As a political matter, the Bush Administration is also long past the point where it might get any credit for helping Detroit. But it will earn the scorn of taxpayers if it refuses to set some limits on access to the Tarp. If Democrats want to change the rules next year, let them do it on their own political dime.

A bailout might avoid any near-term bankruptcy filing, but it won't address Detroit's fundamental problems of making cars that Americans won't buy and labor contracts that are too rich and inflexible to make them competitive. As Paul Ingrassia notes nearby, Detroit's costs are far too high for their market share. While GM has spent billions of dollars on labor buyouts in recent years, they are still forced by federal mileage standards to churn out small cars that make little or no profit at plants organized by the United Auto Workers.

Rest assured that the politicians don't want to do a thing about those labor contracts or mileage standards. In their letter, Ms. Pelosi and Mr. Reid recommend such "taxpayer protections" as "limits on executive compensation and equity stakes" that would dilute shareholders. But they never mention the UAW contracts that have done so much to put Detroit on the road to ruin. In fact, the main point of any taxpayer rescue seems to be to postpone a day of reckoning on those contracts. That includes even the notorious UAW Jobs Bank that continues to pay workers not to work.

...

Honda, Toyota and the rest employ about 113,000 American auto workers who make nearly four million cars a year in states like Alabama and Tennessee. Unlike Michigan, these states didn't vote for Mr. Obama.

But the very success of this U.S. auto industry indicates that highly skilled American workers can profitably churn out cars without being organized by the UAW. A bailout for Chrysler would in essence be assisting rich Cerberus investors at the expense of middle-class nonunion auto workers. Is this the new "progressive" era we keep reading so much about?

The car makers say that bankruptcy is unthinkable and "not an option." And bankruptcy would certainly be expensive, not least for Washington itself, which could be responsible for 600,000 or so retiree pensions through the Pension Benefit Guaranty Corp. In that sense, the bailout is intended to rescue the politicians from having to honor that earlier irresponsible guarantee. But at least that guarantee would be finite. If Uncle Sam buys into Detroit, $50 billion would only be the start of the outlays as taxpayers were obliged to protect their earlier investment in uncompetitive companies.

Comment: The "good money after bad" argument is that billions for Detroit will just delay the inevitable. I hope Bush passes this on to "the Messiah" Obama.

Why Billy Sunday looks like a bad parody

Evangelical Politics: A Few More thoughts

Excerpt:

... individual Christians need to consider their priorities from a biblical perspective and make wise choices about the best use of time and resources. Which is ultimately the better long-term answer to sin—law, or gospel? Law certainly has a place, but it can never actually solve any of the social problems evangelicals are so agitated about nowadays. Even the individual Christian whose vocation is in politics or law enforcement needs to keep the gospel—not merely a message about morality or cultural reform—at the center of his testimony to unbelievers.

Our spiritual great-grandparents were even more exercised about the sin of drunkenness than Christians in this generation are about the slaughter of unborn children. They decided that a legal remedy—a constitutional amendment outlawing liquor—was the best solution. History has shown that they wasted their time and lots of resources, got sidetracked from their real message, and in the end accomplished exactly nothing.

...

In short, there's a reason Spurgeon's preaching is still relevant and powerful today, but Billy Sunday looks like a bad parody.

Comment: Further thoughts on political action by preachers.

"Zombie firms"

Comment: New term "zombie corporation"

Revised AIG Terms Begin Treasury Transfusions to 'Zombie' Firms

Excerpt:

Taxpayers are ``keeping the zombie alive,'' said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors and former director of research at the Atlanta Fed. ``We keep getting deeper and deeper into these holes.''

The shift is likely to vastly expand political demands for saving dying companies in the name of financial or economic stability. The administration of President-elect Barack Obama may soon have to consider credit or capital injections for other insurers, automakers, even retailers as the U.S. slides deeper into what could be the worst recession in a quarter-century.

``Are you going to do General Motors and Ford, and, if you do those, are going to go on and do retailers?'' said William Isaac, former chairman of the Federal Deposit Insurance Corp. and now chairman of the Secura Group LLC. `` Where does it stop? That is a very difficult decision we are going to face as a country.''

Comment: As long at they keep "eating blood" (receiving taxpayer money), they (the "zombie firms") will survive. Wonder why the government doesn't just buy the whole company for $ 1.68 billion (market capitalization)? (Instead of loaning them $ 25 billion). I've loaned and given people (hard luck cases including some relatives), but at some time one has to ask ... how does this money really help them? GM may be a case like that!

"Burdeski died today"

WW II vet held in Nazi slave camp breaks silence: 'Let it be known'

Excerpt:

Anthony Acevedo thumbs through the worn, yellowed pages of his diary emblazoned with the words "A Wartime Log" on its cover. It's a catalog of deaths and atrocities he says were carried out on U.S. soldiers held by Nazis at a slave labor camp during World War II -- a largely forgotten legacy of the war.

Comment: Worthwhile read on Veterans Day!

A Primer on Hyper-Calvinism

A Primer on Hyper-Calvinism

JP: Good read by Phil Johnson.

Introduction:

I wrote and posted this article because I am concerned about some subtle trends that seem to signal a rising tide of hyper-Calvinism, especially within the ranks of young Calvinists and the newly Reformed. I have seen these trends in numerous Reformed theological forums on the Internet, including mailing lists, Web sites, and Usenet forums.

Lest anyone wonder where my own convictions lie, I am a Calvinist. I am a five-point Calvinist, affirming without reservation the Canons of the Synod of Dordt. And when I speak of hyper-Calvinism, I am not using the term as a careless pejorative. I'm not an Arminian who labels all Calvinism "hyper." When I employ the term, I am using it in its historical sense.

History teaches us that hyper-Calvinism is as much a threat to true Calvinism as Arminianism is. Virtually every revival of true Calvinism since the Puritan era has been hijacked, crippled, or ultimately killed by hyper-Calvinist influences. Modern Calvinists would do well to be on guard against the influence of these deadly trends.

Section 382: "the Wells Fargo Ruling"

Excerpts:

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

...

The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

...

Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

Lawmakers decried the tax shelters as a scam and created a formula to strictly limit the use of those purchased losses for tax purposes.

But from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world.

...

The notice, which relaxed the Section 382 rules only for domestic banks, was released on a momentous day in the banking industry. It not only came 24 hours after the House of Representatives initially defeated the bailout bill, but also one day after Wachovia agreed to be acquired by Citigroup in a government-brokered deal.

The Treasury notice suddenly made it much more attractive to acquire distressed banks, and Wells Fargo, which had been an earlier suitor for Wachovia, made a new and ultimately successful play to take it over.

The Jones Day law firm said the tax change, which some analysts soon dubbed "the Wells Fargo Ruling," could be worth about $25 billion for Wells Fargo. Wells Fargo declined to comment for this article.

Comment: Strange financial times!

The Future of the GOP: 2 views

Excerpt:

the Republican coalition, if it still deserves that description, is increasingly constricted, with little space for growth. Not only is the GOP's power largely confined to the South, but the party's complexion displays an unhealthy pallor.

It is, in a word, white -- in an era when America is becoming more diverse, colorful and multiethnic. Nine out of 10 McCain voters were white, in fact, while the supporters of Obama had that more fashionable rainbow look: Out of 10, six were white, two or three were black, one was Hispanic, and the rest were Asian or "other" (perhaps biracial, like the president-elect himself).

Of course, Obama's sweep of African-American voters is hardly surprising. They have been the most reliably Democratic part of the voting population for nearly 80 years. But he also drew two-thirds of Hispanic voters as well, improving on the record of Democrats in the past two presidential elections and his own record in the primaries. Those groups represent the demographic future -- and the Republicans so far have no prospects or plans as the nation enters a period of ethnic change.

Equally ominous for the Republicans is the powerful Democratic preference of young voters, now expressed forcefully for the third national election in a row. Many political scientists believe that adult voting patterns tend to be established before age 30, which if true could lock in a new generation of Democrats. Again, it is not surprising that young minority voters supported Obama or chose Democratic candidates down-ticket, but they attracted a big majority of young white voters as well. Obama defeated John McCain by 10 points in that group, contributing heavily to the overall 2-to-1 Democratic margin among voters under 30.

Thanks in no small degree to the incompetence and corruption of the Republicans who have held power over the past decade or so, almost 40 percent of voters now call themselves Democrats. But just as important is the diminishing burden attached to the "liberal" label, which has been used to such great effect against Democrats over the past three decades.

Perhaps the most revealing post-election data on that question came from within the defeated McCain campaign. In an interview with Roger Simon of Politico, the Republican candidate's speechwriter and friend, Mark Salter, disclosed that in the campaign's own internal polling data, 60 percent of Americans regarded Obama as "liberal." The campaign thought that would be enough to defeat him, which is why it hammered on the "left-wing" themes.

Baiting the liberals didn't work this year. Disgusted with the Republican right, voters wanted something different and weren't afraid to look leftward. That is what "realignment" means.

G.O.P. Dog Days?

Excerpt:

Sure, the election results had been bad — but they weren’t devastating. Obama wasn’t winning the popular vote by double-digit margins, as some polls had suggested he might. Republican losses in the Senate and House were substantial but not catastrophic. Obama was ahead of John McCain by about the same margin with which Bill Clinton defeated George Bush in 1992, and he would be taking over in January with similar Congressional majorities to Clinton’s in 1993.

Well, Newt Gingrich was able to lead a Republican takeover of Congress only two years later. And after his victory in 1976, Jimmy Carter had even larger Democratic margins in Congress. Ronald Reagan trounced him four years later, bringing with him a G.O.P.-controlled Senate and an era of conservative governance.

What’s more, this year’s exit polls suggested a partisan shift but no ideological realignment. In 2008, self-described Democrats made up 39 percent of the electorate and Republicans 32 percent, in contrast with a 37-37 split in 2004.

But there was virtually no change in the voters’ ideological self-identification: in 2008, 22 percent called themselves liberal, up only marginally from 21 percent in 2004; 34 percent were conservative, unchanged from the last election; and 44 percent called themselves moderate, compared with 45 percent in 2004.

In other words, this was a good Democratic year, but it is still a center-right country. Conservatives and the Republican Party will have a real chance for a comeback — unless the skills of the new president turn what was primarily an anti-Bush vote into the basis for a new liberal governing era.

Comment: My concern is "the whiteness" of the GOP. We need to attract Hispanics and Blacks.

Winston Churchill on socialism

Source

Excerpt:

Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.

Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

Al Gore: hyperbole alert!

The Climate for Change

Excerpts:

THE inspiring and transformative choice by the American people to elect Barack Obama as our 44th president lays the foundation for another fateful choice that he — and we — must make this January to begin an emergency rescue of human civilization from the imminent and rapidly growing threat posed by the climate crisis.

The electrifying redemption of America’s revolutionary declaration that all human beings are born equal sets the stage for the renewal of United States leadership in a world that desperately needs to protect its primary endowment: the integrity and livability of the planet.

The world authority on the climate crisis, the Intergovernmental Panel on Climate Change, after 20 years of detailed study and four unanimous reports, now says that the evidence is “unequivocal.” To those who are still tempted to dismiss the increasingly urgent alarms from scientists around the world, ignore the melting of the north polar ice cap and all of the other apocalyptic warnings from the planet itself, and who roll their eyes at the very mention of this existential threat to the future of the human species, please wake up. Our children and grandchildren need you to hear and recognize the truth of our situation, before it is too late.

...

Here’s what we can do — now: we can make an immediate and large strategic investment to put people to work replacing 19th-century energy technologies that depend on dangerous and expensive carbon-based fuels with 21st-century technologies that use fuel that is free forever: the sun, the wind and the natural heat of the earth.

Comment: hyperboles in red! Read the entire article for more!

Are we free at last from the inexpressible tedium of the preoccupation with skin pigmentation?

George Will: Democratic Ironies, Republican Afflictions

Excerpt:

The election of an African American discomfits the Democratic Party. It practices identity politics, stressing the relevance of "race-conscious" policies, defending racial preferences in public hiring, contracting and education. But the election of Barack Obama is an American majority's self-emancipation: We are free at last from the inexpressible tedium of the preoccupation with skin pigmentation.

Comment: On the conservatives fixation on Sarah Palin in 2012:

These conservatives, smitten by a vice presidential choice based on chromosomes, seem eager to compete on the Democrats' terrain of identity politics, entering the "diversity" sweepstakes they have hitherto rightly deplored. We have seen this movie before. Immediately after the 1972 election, some conservatives laid down the law — the 1976 Republican nominee must be Vice President Spiro Agnew.

Final comment: As long as some continue to focus on the color of Barak's skin, racism is alive and well in America! It's the ideas! Not the skin color!

Newt Gingrich: Repeal Sarbanes-Oxley

Newt Gingrich: Repeal Sarbanes-Oxley

Excerpts:

It has been six years since Congress passed the Sarbanes-Oxley Act after the devastating accounting irregularities of Enron and WorldCom. While the intent of the law was to prevent corporate fraud, there is growing evidence that it has done more harm than good, and is undermining the venture-capital industry in Silicon Valley. Now, with signs that our economy is moving toward recession, Congress should take this opportunity to repeal the law.

Rep. Michael G. Oxley, R-Ohio, recently said in an interview with the International Herald Tribune that Sarbanes-Oxley was passed in haste. "Frankly, I would have written it differently. ... Everyone felt like Rome was burning."

Sarbanes-Oxley went too far in regulating corporate governance, resulting in at least three unintended consequences:

1. It was insufficient at preventing insolvencies and accounting shortfalls in companies such as Bear Sterns, Lehman Bros., American International Group (AIG) and Merrill Lynch.
   
2. It initiated a movement among smaller public companies to return to private status or merge.
   
3. It is resulting in a trend where companies choose to go public on foreign, not American, stock exchanges. In 2005, a report by the London Stock Exchange cited that about 38 percent of the international companies surveyed said they had considered issuing securities in the United States. Of those, 90 percent said the onerous demands of the new Sarbanes-Oxley corporate governance law had made London listing more attractive.
   
   

Comment: A fourth consequence, it created non-productive jobs in corporate America (more lawyers, more accountants, more auditors (sorry to my daughter who is a corporate auditor!). It decreased productivity and productivity is the lifeblood of economic progress. I hope Newt Gingrich never runs for the Presidency again, but he is the last great GOP thinkers!

Crow River Coffee Company

Crow River Coffee Company

I've basically been sick all week but today I got out of the house. We drove West somewhat aimlessly and found ourselves on Hennepin Cty Rt 15. At 2 p.m. we stopped at the Crow River Coffee Company in Watertown for a cup of coffee. Every Saturday there is live music in a back room. We stayed for half and hour and then drove home. Pretty cool place!

Blog w video: Cafn8ed


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RELIGIOUS RIGHT R.I.P.

RELIGIOUS RIGHT R.I.P.

Excerpts:

... the Religious Right was a reincarnation of previous religious-social movements that sought moral improvement through legislation and court rulings. Those earlier movements — from abolition (successful) to Prohibition (unsuccessful) — had mixed results.

Social movements that relied mainly on political power to enforce a conservative moral code weren’t anywhere near as successful as those that focused on changing hearts. The four religious revivals, from the First Great Awakening in the 1730s and 1740s to the Fourth Great Awakening in the late 1960s and early ’70s, which touched America and instantly transformed millions of Americans (and American culture as a result), are testimony to that.

Thirty years of trying to use government to stop abortion, preserve opposite-sex marriage, improve television and movie content and transform culture into the conservative Evangelical image has failed. The question now becomes: should conservative Christians redouble their efforts, contributing more millions to radio and TV preachers and activists, or would they be wise to try something else?

...

Evangelicals are at a junction. They can take the path that will lead them to more futility and ineffective attempts to reform culture through government, or they can embrace the far more powerful methods outlined by the One they claim to follow. By following His example, they will decrease, but He will increase. They will get no credit, but they will see results. If conservative Evangelicals choose obscurity and seek to glorify God, they will get much of what they hope for, but can never achieve, in and through politics.

Comment: Transformational moral change only can be accomplished via the Gospel. The marriage of evangelicalism and politics is a failed strategy.

What national financial collapse looks like

Stunned Icelanders Struggle After Economy’s Fall

Excerpt:

The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock. But if the events of last month — the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad — felt like a bad dream, Iceland has now awakened to find that it is all coming true.

It is not as if Reykjavik, where about two-thirds of the country’s 300,000 people live, is filled with bread lines or homeless shanties or looters smashing store windows. But this city, until recently the center of one of the world’s fastest economic booms, is now the unhappy site of one of its great crashes. It is impossible to meet anyone here who has not been profoundly affected by the financial crisis.

Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics.

Comment: Consider my post yesterday - what happens when the one who bailouts cannot be bailed out!

The First National Bank of Orwell

Vermont Bank Thrives While Others Cut Back

Excerpts:

While many of the nation’s large and midsize banks are staggering under the weight of bad mortgages piled up during the housing boom, the First National Bank of Orwell, Vermont’s smallest bank, founded in 1832, is having its best year in recent memory. Loans are up 22.6 percent from a year ago, and deposits are up 7 percent in the same period, Mr. Young said. The bank has $36.5 million in assets.

“If the banks maintained the lending standards that they had established in the past, and had not and did not buy a lot of securities from Fannie Mae and Freddie Mac, they’ve got no problems and they’re sound,” said James F. Gatti, a finance professor at the University of Vermont.

“There is a value to sticking to your knitting, if you will,” Mr. Gatti added. “And I think banks that did will prosper, and prosper nicely, in the next few years.”

...

First National, whose main branch is next to a village store where local residents sit on the porch, drink coffee and chew the fat, has stayed successful because its employees know the area and their customers.

“Having the borrower sit in front of us is very meaningful,” Mr. Young said. “We’re not massive brokers, trying to underwrite a loan from the 55th floor of an office somewhere. There’s serious value in looking someone in the eye and understanding what their drive is, where they’re coming from and how serious they are about the project.”

The employees at the branches here and in neighboring Shoreham also know where a building project is and what it looks like.

“We benefit from knowing what house they’re talking about, what shape it’s in and what neighborhood,” Mr. Young said. “We benefit from a very detailed knowledge of our community, its people and its geography.”

Many times, the project is on one of the dairy farms that dot the verdant, rolling hills here. Or a couple are asking for a mortgage to buy their first home. No matter who the prospective borrower is, the bank requires a 20 percent down payment for every loan, Mr. Young said.

Comment: It's that face to face, know the customer, know the community that I like about the First National Bank Of Orwell. Apparently they do not have a website!

David Brooks: Change I Can Believe In

Change I Can Believe In

Excerpt:

Walking into the Obama White House of my dreams will be like walking into the Gates Foundation. The people there will be ostentatiously pragmatic and data-driven. They’ll hunt good ideas like venture capitalists. They’ll have no faith in all-powerful bureaucrats issuing edicts from the center. Instead, they’ll use that language of decentralized networks, bottom-up reform and scalable innovation.

They will actually believe in that stuff Obama says about postpartisan politics. That means there won’t just be a few token liberal Republicans in marginal jobs. There will be people like Robert Gates at Defense and Ray LaHood, Stuart Butler, Diane Ravitch, Douglas Holtz-Eakin and Jim Talent at other important jobs.

The Obama administration of my dreams will insist that Congressional Democrats reinstate bipartisan conference committees. They’ll invite G.O.P. leaders to the White House for real meetings and then re-invite them, even if they give hostile press conferences on the White House driveway.

They’ll do things conservatives disagree with, but they’ll also show that they’re not toadies of the liberal interest groups. They’ll insist on merit pay and preserving No Child Left Behind’s accountability standards, no matter what the teachers’ unions say. They’ll postpone contentious fights on things like card check legislation.

Most of all, they’ll take significant action on the problems facing the country without causing a mass freak-out among voters to the right of Nancy Pelosi.

They’ll do this by explaining to the American people that there are two stages to their domestic policy thinking, the short-term and the long-term.

The short-term strategy will have two goals: to mitigate the pain of the recession and the change the culture of Washington. The first step will be to complete the round of stimulus packages that are sure to come.

Then they’ll take up two ideas that already have bipartisan support: middle-class tax relief and an energy package. The current economic and energy crisis is an opportunity to do what was not done in similar circumstances in 1974 — transform this country’s energy supply. A comprehensive bill — encompassing everything from off-shore drilling to green technologies — would stimulate the economy and nurture new political coalitions.

When the recession shows signs of bottoming out, then my dream administration would begin phase two. The long-term strategy would be about restoring fiscal balances and reforming fundamental institutions.

...

My dream administration will announce a Budget Rebalancing Initiative. Somebody like Representative Jim Cooper would go through the budget and take out the programs and tax expenditures that don’t work. “If we have no spending cuts, then we’re saying government is perfect. Nobody believes that,” Cooper says.

Having built bipartisan relationships, having shown some fiscal toughness, having seen the economy through the tough times, my dream administration will then be in a position to take up health care reform, tax reform, education reform and a long-range infrastructure initiative. These reforms may have to start slow and on the cheap. But real reform would be imaginable since politics as we know it would be transformed.

Is it all just a dream? I hope not. In any case, please be quiet and let me have my moment.

Comment: I am trying to avoid being a cynic, but if this kind of change happened, I could be a Democrat.

I'll mlss Michael Crichton

Crichton's Wisdom

Excerpt:

Crichton, who died this week of cancer, will not be remembered as a brilliant prose stylist. But he knew how to hold reader attention, and he had an inventive mind that led him to write novels -- 26 in all, along with screenplays and works of nonfiction -- that concerned the problematic intersection of science, technology, public policy and ordinary life. A medical doctor by training, Crichton knew better than to treat scientists and technologists as a priestly class, immune from temptations of fame, profit or power.

As a result, Crichton was sometimes accused of being a Luddite. In fact, he was a champion of good science, and never more so than in a 2003 lecture at Caltech, hilariously titled "Aliens Cause Global Warming."

Comment: He wrote the perfect "airport books" - books to be read while traveling. My first Crichton novel - The Andromeda Strain; the second - The Terminal Man.

Tweak CAFE and help Detroit

Yes, Detroit Can Be Fixed

Excerpt:

... simply have to allow auto makers to meet the fuel economy standards with any mix of autos made in domestic or overseas factories.

Under the nonsensical "two fleet" rule that now applies, manufacturers meet the standards separately with their "domestically" and "nondomestically" produced fleets. What does this have to do with making sure U.S. consumers get good mileage? Nothing. It's a naked handout to the UAW at the expense of the companies and their customers.

How dumb is the two-fleet rule? Nissan, in a petition for its removal, points out foreign brands may actually minimize the domestic content in their U.S. cars so they can continue to count as "nondomestic."

How dumb is the rule? Chrysler might not be unraveling today if not for the two-fleet rule, the real genesis of the Hail Marys it's been throwing in all directions to find an electric car or a small-car partner or to merge with GM. Chrysler has a perfectly salvageable business making trucks, minivans, muscle cars and Jeeps -- doomed only by the lack of enough small, fuel-efficient cars to roll out of a UAW factory with a Chrysler emblem slapped on.

For 30 years, to make and sell the large vehicles that earn their profits, the Detroit Three have been effectively required to build small cars in high-wage, UAW factories, though it means losing money on every car. (That -- not some perverse desire to make bad cars -- is why they skimped for decades on styling, engineering and materials in their family sedans.)

Sure, this bullet would be far from silver and would still cause pain. The UAW might declare war to stop production from being shifted offshore. The Big Three might have to pay billions in job buyouts to use their new freedom. Since 2005, they've had some leeway under Nafta to shift "domestic" production to Mexico and haven't done much about it.

But here's the key: Detroit would finally get what every foreign competitor and just about every other business has -- normal leverage over labor costs. Auto jobs wouldn't automatically flee offshore. The Big Three would rather hire high-quality U.S. workers -- but on the same terms that Toyota or Nissan or BMW do.

Let's not kid ourselves that a taxpayer rescue would be anything but a down payment on a never-ending bailout. The bailout already is never-ending: Chrysler was already rescued once. Forgotten are the Reagan-era import quotas that inflated the price of every car sold in America to help prop up the Big Three. If hooked up to Washington life supports today, Detroit's first assignment would be to "protect jobs" -- job protection guarantees being one of the Big Three's fatal errors in the first place.

Comment: I was watching CNBC tonight and the commentator opined that a Detroit bailout would in essence make GM (and Ford and Chrysler) like Airbus. I understand the the Saturn Astra is a fine small car, but GM cannot make money on it because it is too expensive to be built in the US.

North Korean photoshops Kim!

'Fake photo' revives Kim rumours

Excerpt:

The image, released on Wednesday, appeared to show Mr Kim in good health while inspecting two military units.

But an analysis by the UK's Times newspaper highlighted incongruities around the leader's legs, and the BBC found what look like mismatched pixels.

Comment: Like the Iranian missiles! HT: Was the Dear Leader Photoshopped In?

Coleman & Franken: 238 votes

Franken's deficit: 238 votes

Excerpt:

Just as Secretary of State Mark Ritchie was explaining to reporters the recount process in one of the narrowest elections in Minnesota history, an aide rushed in with news: Pine County's Partridge Township had revised its vote total upward -- another 100 votes for Democratic candidate Al Franken, putting him within .011 percentage points of Republican U.S. Sen. Norm Coleman.

The reason for the change? Exhausted county officials had accidentally entered 24 for Franken instead of 124 when the county's final votes were tallied at 5:25 Wednesday morning.

"That's why we have recounts," Ritchie said, surveying the e-mail sent in from the county auditor. "Human error. People make mistakes."

The margin in the tightest Senate race in the country bounced like the stock market throughout the day, with the difference between Coleman and Franken dropping, then rising briefly to 590 votes before shooting down to a razor-thin 238 as of 10:50 a.m.

In a reversal of the previous day, when Coleman had declared victory and suggested that Franken should waive a recount, Coleman kept to himself on Thursday, while Franken called reporters to talk about the prospects for a continued narrowing of the count.

"Coleman said there was no reason for a recount, that there would be no movement," Franken said Thursday, a day after unofficial results initially showed Coleman with a 725-vote advantage. "But you see that it's more than halved and the recount hasn't even started. This election will be decided by the voters, not by the candidates."

Comment: I told my son, Roger, that this is the closest Senate race I could recollect. Well my memory is apparently not that good! See below

Closest Election in Senate History

Excerpt:

The closest election in Senate history was decided on September 16, 1975. The 1974 New Hampshire race for an open seat pitted Republican Louis Wyman against Democrat John Durkin.

Although Wyman enjoyed a lead during the campaign, the Watergate scandals and the August 1974 resignation of President Richard Nixon made it a tough year to run as a Republican. On election day, Wyman barely won with a margin of just 355 votes.

Durkin immediately demanded a recount. That recount shifted the victory to Durkin—but by only 10 votes. Reluctantly, the Republican governor awarded Durkin a provisional certificate of election.

Now, it was Wyman’s turn to demand a recount. The state ballot commission tabulated the ballots in dispute and ruled that Republican Wyman had won—but by just two votes. The governor cancelled Durkin’s certificate and awarded a new credential to Wyman.

As a last option, Durkin petitioned the Senate—with its 60-vote Democratic majority—to review the case. On January 13, 1975, the day before the new Congress convened, the Senate Committee on Rules and Administration tried unsuccessfully to resolve the matter. Composed of five Democrats and three Republicans, the Rules Committee deadlocked four-to-four on a proposal to seat Wyman pending further review. Alabama Democrat James Allen voted with the Republicans on grounds that Wyman had presented proper credentials.

The full Senate took up the case on January 14, with Wyman and Durkin seated at separate tables at the rear of the chamber. Soon, the matter returned to the Rules Committee, which created a special staff panel to examine 3,500 questionable ballots that had been shipped to Washington.

Following this review, the Rules Committee sent 35 disputed points to the full Senate, which spent the next six weeks debating the issue and took an unprecedented six cloture votes, but resolved only one of the 35 points in dispute. Facing this deadlock, Durkin agreed to Wyman’s proposal for a new election. The Senate declared the seat vacant and the governor appointed former Senator Norris Cotton to hold the seat for six weeks until the September 16 balloting.

A record-breaking turnout gave the election to Durkin by a 27,000-vote margin.

Comment: Image from the Star Tribune. More below:

Voters' word may not be last in Minn. Senate race

Excerpts:

In percentage terms, Minnesota's race will go down as the closest Senate election prior to a recount. In 1974, a New Hampshire race came down to 355 votes out of 200,000 cast.

...

The Minnesota election law envisions Senate involvement.

Once a result is contested in district court — which must come within a week of the post-recount canvass — the chief justice of the state Supreme Court assigns three judges to hear it. The current chief, Eric Magnuson, is an appointee of Republican Gov. Tim Pawlenty.

Either party can request to inspect the ballots, and three-member inspection teams are appointed. Each party picks one, and the third is chosen by the two or appointed by a judge.

Within 20 days of the initial filing, a trial is held. The court decides who received the most votes and is entitled to the certificate of election. The court can study evidence of election irregularities, but it can't issue findings or conclusions.

Once all appeals are exhausted, either party can ask that the information be forwarded to the presiding Senate officer.

From there, it's up to the Senate to decide how to proceed.

"Ultimately the Constitution gives the Senate the sole power to determine the qualifications of its members," Ritchie said. "In the end, there is no appeal if the Senate makes the decision."

The danger of bailing out "everybody"

GM: Almost out of cash

Excerpt:

General Motors shook an already embattled auto industry Friday as it reported a huge loss that was much worse than expected and warned it is in danger of running out of cash in the coming months.

GM, the nation's largest automaker, reported it lost $4.2 billion, or $7.35 a share, excluding special items. That's up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share.

But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter.

In addition, the company said that in the first half of next year its "estimated liquidity will fall significantly short" of what it needs to continue operating. It said the only thing that would save it would be a significant improvement in economic and automotive industry conditions, help from the federal government, better access to capital markets or some combination of those options.

We Have a Debt to Discharge

Excerpt:

All the US government is doing is creating a bigger bubble. What will happen when the Treasury auctions fail, or, stretch the yield curve so wide that there is panic. We don’t want our financial institutions to fail, so we are willing to wager the creditworthiness of the nation in order to save them. I don’t like that bet. Many empires have died choking on debt. Is the US to be next?

When I wrote articles opposing the bailout, I did so because I did not think it would work, and that one-off conservations/liquidations would be preferable, but not optimal. Optimal to me would be using the bankruptcy code on a expedited basis, wiping out junior capital, and making senior capital take haircuts.

But in the present, we contemplate borrowing to bail out all manner of problems — bail out homeowners, automakers, banks, insurers, guarantors, etc. The end to this phase will come when the creditors of the US write off their prior lending, and decide not to throw good money after bad. I have no idea when that time will come, but the dreamy schemes of politicians aiming to solve every financial hurt will help to force such a time to happen.

U.S. Carmakers Said to Seek $50 Billion in U.S. Loans

Excerpt:

General Motors Corp., Ford Motor Co. and Chrysler LLC, strapped for cash as sales plunge, are seeking $50 billion in federal loans to help them weather the worst auto market in 25 years, a person familiar with the matter said.

The package would be $25 billion for health-care spending and $25 billion for general liquidity that could be delivered in different ways, including short-term borrowing from the Federal Reserve, said the person, who asked not to be identified because the plan isn't public. In return, the companies would be willing to take steps such as granting stock warrants, the person said.

Comment: I have my own personal investment in GM: I have been a GM car buyer for decades, I currently have 2 GM cars (S-10 pickup & an Impala), I have a nephew who owns a GM dealership, etc. As an investor, I own GM stock somewhere (in one mutual fund or another, or in an ETF). Nevertheless, I am concerned about bailout after bailout. GM is burning through cash, so are Ford and Chrysler. The question is this - at what time are we chasing good money after bad? And who will bailout the one who bails out? "Many empires have died choking on debt. Is the US to be next?"

Classless disrespect for the President

The Treatment of Bush Has Been a Disgrace

Excerpts:

It seems that no matter what Mr. Bush does, he is blamed for everything. He remains despised by the left while continuously disappointing the right.

...

The treatment President Bush has received from this country is nothing less than a disgrace. The attacks launched against him have been cruel and slanderous, proving to the world what little character and resolve we have. The president is not to blame for all these problems. He never lost faith in America or her people, and has tried his hardest to continue leading our nation during a very difficult time.

Our failure to stand by the one person who continued to stand by us has not gone unnoticed by our enemies. It has shown to the world how disloyal we can be when our president needed loyalty -- a shameful display of arrogance and weakness that will haunt this nation long after Mr. Bush has left the White House.

GOP base is "totally white"

Excerpt:

Let's think about the pictures that we saw of McCain-Palin rallies. Contrast that with the rallies of Barack Obama and Joe Biden. The Republican party is stuck in a land of TV Land - 'Leave It To Beaver,' 'Father Knows Best,' 'Howdy Doody.' That America does not exist anymore. The Republican Party has got to do something because their base is totally white."

Comment: True

Biggest issues facing Obama administration

My view:

I'll start (highest to lowest)

1. Economic issues:
   • Credit crisis
   • Foreclosure crisis
   • Jump-starting the economy
   • Tax policy
   • Budget deficits
2. National defense
   • Phase out of Iraq
   • Stabilization of Afghanistan
   • Neutralization of Al-Qaeda
   • Protection against terrorism
3. Immigration reform (what to do with 10-12 Million illegals in U.S.)
4. Energy policy
5. Social security / Medicare reform
6. Health care reform
7. Foreign policy
   • Improve standing in the international community
   • Solve (editorial comment: I don't believe it solvable - No peace until the Prince of Peace returns!) the middle east issue.

Comment: Feel free to post yours. Thanks

Frank Borman quote - applies to auto company bailouts

Capitalism without bankruptcy is like Christianity without hell

Source: Wiki: Eastern Air Lines

Will Joe Lieberman experience "long knives"?

An Embrace of Lieberman? Not Exactly

Excerpt:

The political status of Senator Joseph I. Lieberman of Connecticut was indefinite on Thursday after he met with Senator Harry Reid of Nevada, the Democratic majority leader, to discuss Mr. Lieberman’s support of Senator John McCain, the Republican candidate for president.

Mr. Lieberman, a one-time Democrat who became an independent, could be stripped of his chairmanship of the Homeland Security and Governmental Affairs Committee, although neither he nor Mr. Reid addressed that issue after their meeting.

“I’m thinking about what my options are,” Mr. Lieberman said.
Mr. Reid issued a statement notably lacking in warmth in which he called the meeting “the first of what I expect to be several conversations.”

“No decisions have been made,” Mr. Reid said. “While I understand that Senator Lieberman has voted with Democrats a majority of the time, his comments and actions have raised serious concerns among many in our caucus. I expect there to be additional discussions in the days to come, and Senator Lieberman and I will speak to our caucus in two weeks to discuss further steps.”

Comment: Joe will pay the price for support of McCain.

Sarcasm: Gunman Kills 15 Potential Voters

Gunman Kills 15 Potential Voters In Crucial Swing State


Comment: Pointed sarcasm!

This rankled me!

Internal Battles Divided McCain and Palin Camps

Excerpt:

On Wednesday, two top McCain campaign advisers said that the clothing purchases for Ms. Palin and her family were a particular source of outrage for them. As they portrayed it, Ms. Palin had been advised by Nicolle Wallace, a senior McCain aide, that she should buy three new suits for the Republican National Convention in St. Paul in September and three additional suits for the fall campaign. The budget for the clothes was anticipated to be from $20,000 to $25,000, the officials said.

Instead, in a public relations debacle undermining Ms. Palin’s image as an everywoman “hockey mom,” bills came in to the Republican National Committee for about $150,000, including charges of $75,062 at Neiman Marcus and $49,425 at Saks Fifth Avenue. The bills included clothing for Ms. Palin’s family and purchases of shoes, luggage and jewelry, the advisers said.

Comment: Yes you can say "this is the New York Times ... what would you expect them to report" ,etc. But it is commonly known that $ 150K was spent on wardrobe! Think about that: $ 150,000!!! Our (the Peets') annual wardrobe budget is less than $ 2000. (If you know me, you could say ... "it looks like it too!). In a typical year I spend about $ 600 on clothes (mostly shoes because for me they wear out so fast). If you are trying to reach people - real people who are struggling to pay mortgages and have ends meet, having a candidate spend $ 150,000 on wardrobe is not a good idea!

What about a cash discount?

Small-Business Owners Lobby to Cut Credit Card Fees

Excerpt:

A typical merchant card payment has two parts: an “interchange fee,” which includes an average 1.7 percent of the sale price and a flat per-transaction fee, and a separate fee that goes to the merchant’s bank. Take, for example, a driver who pays for a $1,000 car repair with a credit card. The bank that issued the consumer’s card receives an interchange fee of $17.10 (including a 10-cent flat fee), while the repair shop’s bank gets $4, or four-tenths of 1 percent of the total sale. The repair shop pockets $978.90.

Comment: I would like to see retailers offer a discount for cash.

What I expect from the Obama administration

Stay Tuned — Coming Tomorrow: 10 Things to Expect from an Obama Administration

Comment: See my comments on Dan Burrell's blog

1. 2 Supreme Court nominations in 1st term
   
2. Immigration reform (some way to permit 10-12 million illegals to be on a “path to citizenship”
   
3. Carbon tax
   
4. Largely out of Iraq by end of 2009
   
5. Health care reform that brings more under a government program
   
6. “Mean’s testing” of Federal benefits
   
7. Handgun legislation: bullet registry; waiting periods, national database, enabling cities to sue the gun manufacturers
   
8. Higher taxes (and not just on the rich)
   
9. Support for Israel balanced with Palestinian rights
   
10. Rapprochement with Iran
    
11. Possible offensive in the mountainous Afghanistan / Pakistan border region
    
12. Labor legislation favorable to unions
    
13. Trade protectionism - possibly even reopening NAFTA
    
14. Environmental legislation to stem “global warming”. Basically higher taxes on energy
    
15. Legislation protecting homeowners facing foreclosure. This will basically make borrowing more expensive for everyone
    
16. There will only be lip service to bipartisanship. Republicans will be shut out.
    

What do you expect?

Banking oligopoly

Just 3 ‘superbanks’ now dominate industry

Excerpt:

Several of the nation's biggest banks have failed or been absorbed by healthier institutions, leaving three giant "superbanks" with an unprecedented concentration of market power: Bank of America, JPMorgan Chase and Wells Fargo.

Comment: My own bank strategy: Have a primary bank and an Internet bank. A good Internet bank is IngDirect. I love the work "oligopoly", by the way! Just say it aloud about 5 times ... a fun word to say!

Linux into the mainstream

Why Your Next Computer Might Be A Linux PC

Excerpt:

In the rest of the computing world of desktop computers and mainstream notebooks, you're typically choosing between Windows Vista or Mac OS X, but in the world of netbooks, it's Linux or XP. Those two operating systems are perfect for netbooks thanks to their lower CPU and power requirements.

For those pinching pennies (and who isn't these days? ), the Linux netbooks are even more affordable than their XP counterparts, typically falling into the $300-400 range. If you're already doing most of your computing in the cloud - that is, you use webmail, create and edit documents using a service like Google Docs or Zoho, store your photos online at a site like Flickr, and, most importantly, don't need to run a bunch of software programs on your desktop, the Linux computer is now looking more like a viable option than before - and one that saves you a bit of change too. Just look at these prices: the Acer Aspire One ($399), the HP Mini 1000 ($379), the Dell Inspiron Mini 9 ($349), and the MSI U90X ($369).


As any Linux fan will tell you, the beauty of this OS is its stability. These Linux machines don't crash, boot quickly, and are generally known to be all-around reliable computers.

Comment: I've had Linux on a desktop for almost 4 years. Very stable. The Acer Aspire One is $ 327 at Amazon!

USMC Vietnam hero dies

Col. John W. Ripley, Marine Who Halted Vietnamese Attack, Dies at 69

Excerpt:

Colonel Ripley, who at the time was a captain and a military adviser to a South Vietnamese Marine unit, blew up the southern end of the Dong Ha Bridge over the Cua Viet River on Easter Sunday, April 2, 1972. On the north side of the bridge, which was several miles south of the demilitarized zone, some 20,000 North Vietnamese troops and 200 tanks were poised to sweep into Quang Tri Province, which was sparsely defended.

Going back and forth for three hours while under fire, Captain Ripley swung hand over hand along the steel I-beams beneath the bridge, securing himself between girders and placing crates holding a total of 500 pounds of TNT in a diagonal line from one side of the structure to the other. The I-beam wings were just wide enough to form pathways along which he could slide the boxes.

When the boxes were in place on the bridge, Captain Ripley attached blasting caps to detonate the TNT, then connected them with a timed-fuse cord that eventually extended hundreds of feet.

“He had to bite down on the blasting caps to attach them to the fuses,” John Grider Miller, author of “The Bridge at Dong Ha,” said on Monday. “If he bit too low on the blasting cap, it could come loose; if he bit too high, it could blow his head apart.”

Captain Ripley bit safely, and the timed-fuse cord gave him about half an hour to clamber off the bridge. Moments later, his work paid off with a shock wave that tossed him into the air but otherwise left him unharmed.

By placing the crates diagonally along the bridge, Mr. Miller said, Captain Ripley had created “a twisting motion that ripped the bridge apart from its moorings so it couldn’t fall back in place, but collapsed into the river.”

There were about 600 South Vietnamese marines near the south end of the bridge. “South Vietnam would have been in big trouble,” said Fred Schultz, senior editor of Naval History Magazine, a publication of the United States Naval Institute. “The force numbers defending on that side could not have held against that North Vietnamese force.”

The destruction of the bridge created a bottleneck for the North Vietnamese, allowing American bombers to blunt what became known as the Easter offensive.

Captain Ripley was awarded the Navy Cross for his actions at the bridge. He served two tours in Vietnam and remained on active duty until 1992, eventually rising to colonel. Among other decorations, he received the Silver Star, two Bronze Stars and a Purple Heart.

Comment: Image from Wiki: John Ripley (USMC) (Detail of a diorama at the U.S. Naval Academy showing Capt Ripley hanging from bridge at Dong-Ha). Worth remembering those who lived "ask what you can do for your country". More below:

The Easter Offensive and the bridge at Dong Ha

With some cover fire provided by the men of the Third Marine Battalion and aided by U.S. Army Maj. John Smock, Capt. John Ripley accomplished what was not possible: He went out and blew up the bridge.

There is no sports analogy for what Ripley did. It was not like running a three minute mile, bench pressing 700 pounds, or pulling out a come-from-behind Super Bowl upset victory. There were no adoring crowds. What Ripley did was simply impossible. Had he failed while attempting to do it, his peers would have only thought him noble and brave for trying.

The significance of the timely destruction of the bridge at Dong Ha cannot be overstated – both in terms of Ripley's personal heroism and the impact it had on the entire communist offensive. Those who ponder alternative history could easily argue that had the NVA been able to secure the bridge and the town at that time, the unfortunate end of the Republic of Vietnam on April 30, 1975, might have been markedly speeded up.

Built by U.S. Navy Seabees in 1967, the bridge was a 200-meter concrete and steel leviathan. Its destruction required deliberate planning, intellect and guts. Mostly guts. Ripley would provide all three as he needed to distribute 500 pounds of dynamite on the structure's underside.

Making a dozen-odd trips between the southern bank of the river and the belly of the bridge, each time he shuttled roughly 40 pounds of explosives as he swung, hand-over-hand, out to the various spans and stringers, all the while exposed to enemy fire from the northern side. Placement of the dynamite and requisite wiring took more than two hours.

With the rigging complete, and without fanfare, Smock and Ripley blew the bridge. (For a superbly chronicled read of the entire action, see "The Bridge at Dong Ha" by Ripley friend and fellow covan U.S. Marine Corps Col. John Miller. For the view from the senior adviser who effectively ran the entire show during this period of the war, pick up Col. Gerry Turley's compellingly honest and painstakingly fair "The Easter Offensive." Both available at the U.S. Naval Institute or the Marine Corps Association.)

Ripley's performance that day continues to fascinate. These were not the deeds of a regular man. His bravery was not some gut reaction or counterpunch to a blow struck by an enemy. His actions in that three-hour window – with the world collapsing around him – were deliberate, willful, premeditated. Every ounce of his spiritual and physical fiber was focused on mission accomplishment. Anything less and he surely would have failed. Exhausted prior to the start, when he was finished he was way past empty.

With the bridge's destruction, the communist offensive was blunted but the fighting continued. Always seeming to draw tough assignments, the Third Marine Battalion – known as the Soi Bien or "Wolves of the Sea" – was a storied unit within the Vietnamese Marine Corps. While John Ripley's actions on Easter Sunday of 1972 would make him a legend among his brother covans and professional contemporaries, he was at least evenly matched with the man who led the Soi Bien.

Major Le Ba Binh was a Marine's Marine. He was to the Vietnamese Marine Corps, in its by-then 18-year history, what Chesty Puller, Dan Daly and Pappy Boyington combined were to the by then 196-year history of the U.S. Marine Corps. About the same age as his trusted friend John Ripley, Binh had even served as a student at The Basic School in Quantico where all American Marine lieutenants are schooled in the warrior arts. Wounded at least a dozen times, he had already been decorated for valor on seven separate occasions when the Easter Offensive began.

Binh was the consummate combat leader. Always out front where the action was heaviest, he was revered by his men and would endure any burden to defeat the hated communists. With the world crumbling around his Marines and the generally poor showing being put forth by most ARVN units in Military Region 1, he intended to follow the orders he received – to hold at all costs.

The battles in and around Dong Ha were only part of the much larger communist offensive. While many other ARVN units initially collapsed under NVA pressure, the various battalions of the Vietnamese Marine Corps, along with their covans, fought with tenacity and gave ground grudgingly.

Facing an entire 20,000 man division with an estimated 200 tanks, the 700-plus men of the Third Marine Battalion held Dong Ha for four days, until they too were completely surrounded and were forced to make a fighting withdrawal from the area. Less than a month later, as those who remained stood in formation to be addressed by their commandant at the regional headquarters in Hue, Maj. Binh would muster only 52 survivors. The two companies which had provided Ripley with cover fire while he and Major Smock destroyed the bridge, and then remained in place to battle the NVA armor and infantry, had been wiped out to the last man.

Inside WaMu's "boiler room"

Was There a Loan It Didn’t Like?

Excerpt:

MS. COOPER started at WaMu in 2003 and lasted three and a half years. At first, she was allowed to do her job, she says. In February 2007, though, the pressure became intense. WaMu executives told employees they were not making enough loans and had to get their numbers up, she says.

“They started giving loan officers free trips if they closed so many loans, fly them to Hawaii for a month,” Ms. Cooper recalls. “One of my account reps went to Jamaica for a month because he closed $3.5 million in loans that month.”

Although Ms. Cooper couldn’t see it, the wheels were already coming off the subprime bus.

“If a loan came from a top loan officer, they didn’t care what the situation was, you had to make that loan work,” she says. “You were like a bad person if you declined a loan.”

One loan file was filled with so many discrepancies that she felt certain it involved mortgage fraud. She turned the loan down, she says, only to be scolded by her supervisor.

“She told me, ‘This broker has closed over $1 million with us and there is no reason you cannot make this loan work,’ ” Ms. Cooper says. “I explained to her the loan was not good at all, but she said I had to sign it.”

The argument did not end there, however. Ms. Cooper says her immediate boss complained to the team manager about the loan rejection and asked that Ms. Cooper be “written up,” with a formal letter of complaint placed in her personnel file.

Ms. Cooper said the team manager told her to “restructure” the loan to make it work. “I said, how can you restructure fraud? This is a fraudulent loan,” she recalls.

Ms. Cooper says that her bosses placed her on probation for 30 days for refusing to approve the loan and that her team manager signed off on the loan.

Four months later, the loan was in default, she says. The borrower had not made a single payment. “They tried to hang it on me,” Ms. Cooper said, “but I said, ‘No, I put in the system that I am not approving this loan.’ ”

Brokers often tried to bribe Ms. Cooper to approve loans, she says. One offered to pay $900 to send her son to football summer boot camp if she would approve a loan that had been declined by a host of other lenders. “I told him no and not to disrespect me like that again,” Ms. Cooper says.

Hidden fees meant brokers could easily make between $20,000 and $40,000 on a $500,000 loan, Ms. Cooper says.

...

Ms. Cooper says that loans she turned down were often approved by her superiors. One in particular came back to haunt WaMu.

Vetting a loan one day, Ms. Cooper says she became suspicious when a photograph of the house being bought showed one street address while documents deeper in the file showed a different address. She contacted the appraiser, and recalls that he said that he must have erred and that he would send her the correct documents.

“So then he sent me an appraisal with a picture of the same house but this time with the right number on it,” Ms. Cooper recalls. “I looked the address up in our system and could not find it. I called the appraiser and said, ‘Please investigate.’ ”

The appraiser came back, reporting that a visit to the California property had found everything in order and in agreement with the original appraisal. “I was so for sure that it was fraud I wanted to get on an airplane,” Ms. Cooper says.

The $800,000 loan was approved, but not by Ms. Cooper. Six months later, it defaulted, she says. “When they went to foreclose on the house, they found it was an empty lot,” she recalls. “I remember clear as day this manager comes over to me and asks, ‘Do you remember this loan?’ I knew just what she was talking about.”

Comment: Decisions in rooms like these greased the Mortgage crisis

NYTimes graphic: The Debt Trap

NYTimes graphic: The Debt Trap


Comment: Instructive - worth checking out

Pre-election thoughts (E minus 2)

Comments: I was conversing with one of my sons yesterday. He will vote for Obama on Tuesday; I have already voted for McCain (by absentee ballot). My son said (and I think this is pretty profound), "since I've been alive (born in 1980) there have been three Republican presidents and 1 Democrat. And which President balanced the budget?!" The answer is Bill Clinton. I can make excuses (9/11, recession, etc) and defend (the first Bush set the stage for the Clinton budgets; Reagan's "winning" the cold war and the peace dividend that reduced defense spending. Additionally the Republicans' pushed welfare reform that saved billions and helped Clinton balance the budget. But the above aside, I find it tragic that the Republicans have lost their voice to be fiscal conservatives.

It now looks like Obama's victory may be a landslide. I pray and hope that McCain wins, but it appears that the handwriting is on the wall.

The question that will need to be addressed on Wednesday is: Who will lead the party? Who will lead the Republicans to regain "our voice". I don't think it will be Sarah Palin.

As a Christian I am not concerned by an Obama Presidency. God is sovereign and in control and His will will not be thwarted.

Meanwhile consider the following editorials:

Obama's '$4 Billion for Exxon' Myth - Why haven't the 'fact-checkers' done a better job?

Excerpt:

n the last debate, Sen. Obama said, "We both want to cut taxes, the difference is who we want to cut taxes for. . . . The centerpiece of [McCain's] economic proposal is to provide $200 billion in additional tax breaks to some of the wealthiest corporations in America. Exxon Mobil, and other oil companies, for example, would get an additional $4 billion in tax breaks."

That $200 billion figure is false. Yet FactCheck.org and most reporters never bothered to ask Mr. Obama where he came up with it. FactCheck.org did discover that Mr. Obama's claim about "$4 billion in tax breaks for energy companies" came from a two-page memo from the Center for American Progress Action Fund -- a political lobby headed by John Podesta, former chief of staff to Bill Clinton, with tax issues handled by two lawyers, Robert Gordon and James Kvaal, former policy directors for the John Kerry and John Edwards campaigns. Those lawyers confused average tax rates (after credits and deductions) with the 35% statutory rate on the next dollar of earnings, so that cutting the latter rate from 35% to 25% would supposedly cut big oil's $13.4 billion tax bill by 28.5%, or $3.8 billion. That is not economics; it is not even competent bookkeeping.

Comment: The media has failed to be "fact checkers".

Obama and the Runaway Train

Excerpt:

n the words of Minnesota's Gov. Tim Pawlenty, "the runaway train." The size and dimension of the likely Democratic victory seem clear. A Democratic House with a bigger, more fervent Democratic majority; a Democratic Senate with the same, and possibly with a filibuster-breaking 60 seats; a new and popular Democratic president, elected by a few points or more; a Democratic base whose anger and hunger have built for eight years; Democratic activists and operatives hungry for business and action. What will this mix produce? A runaway train with no one to put on the brakes, to claim a mandate for slowing, no one to cry "Crossing ahead"? Democrats in Congress will move for innovation when much of the country hopes only for stability. Who will tell Congress of that rest of the nation? Mr. Obama will be overwhelmed trying to placate the innovators.

America enjoyed divided government most successfully recently from 1994 to 2000, with Bill Clinton in the White House and Newt Gingrich in effect running Congress. It wasn't so bad. In fact, it yielded a great deal, including sweeping reform of the welfare system, and balanced budgets.

Whoever is elected Tuesday, his freedom in office will be limited. Mr. Obama is out of money and Mr. McCain is out of army, so what might be assumed to be the worst impulses of each -- big spender, big scrapper -- will be circumscribed by reality. In Mr. Obama's case, energy will likely be diverted to other issues. He will raise taxes, of course, but he may also feel forced to bow to a clamorous base with the nonspending items they favor: the rewriting of union law to force greater unionization of smaller shops, for instance, and a return to a "fairness doctrine" that would limit free speech on the air.

And there is this. The past few months as the campaign unfolded, I listened for Mr. Obama to speak thoughtfully about the life issues, including abortion. Our last Democratic president knew what that issue was, and knew by nature how to speak of it. Bill Clinton famously said, over and over, that abortion should be "safe, legal and rare." The "rare" mattered. It set a tone, as presidents do, and made an important concession: You only want a medical practice to be rare when it isn't good. For Mr. Obama, whose mind tends, as intellectuals' minds do, toward the abstract, it all seems so . . . abstract. And cold. And rather suggestive of radical departures. "That's above my pay grade." Friend, that is your pay grade, that's where the presidency lives, in issues like that.

But let's be frank. Something new is happening in America. It is the imminent arrival of a new liberal moment. History happens, it makes its turns, you hold on for dear life. Life moves.

A fitting end for a harem-scarem, rock-'em-sock-'em shakeup of a year -- one of tumbling inevitabilities, torn coalitions, striking new personalities.

Eras end, and begin. "God is in charge of history." And so my beautiful election ends.

Comment: Peggy Noonan is correct - "God is in charge of history." And as my Brother commented today - there will be another Presidential election in 4 years!

Obama Civilian Security Force

Comment: What's this about?