Outside the Arena

Incredible - there they go again.

So, on Christmas break, I am sitting watching "Morning Joe." The gathered pundits unanimously agreed with Thomas Friedman's op-ed in yesterdays (Sunday) NY Times http://www.nytimes.com/2008/12/28/opinion/28friedman.html?_r=1

This piece advocates a new tax on gasoline - "Win, win, win..."

So which is it? Either we have the worst economy in <fill in the blank> years... the incoming administration is lamenting thousands, if not millions of jobs being lost. The auto companies and financial services companies have fallen and likely many of them won't get up. And the answer is...

a new gas tax!

What kind of thinking takes the ONLY thing that is propping the economy now (gas is 1/2 the price it was 5 months ago), and taxes it thereby driving prices up suddenly? Where will the resulting revenue go? Into the "stimulus"? Why the stimulus is "public works projects." Don't those workers drive to work using gas? Don't they use heavy equipment that pollutes and uses gas? Don't they spread asphalt and other petro-based products?

What is the point? Government-based employment and nothing more.

Friedman and the Morning Joe crew point out that increasing prices fosters conservation. That is incredibly convoluted thinking.

What they evidently don't realize is that low gas prices drive the economy. Guys and gals - people use their cars to commute to work, to drive to meetings, to go to the supermarket to buy food, etc. This isn't about curbing Sunday driving. How many more layoffs would result from another tax on gasoline?

This would be akin to raising income taxes in this economic climate. Oh, wait a minute, the great David Axelrod came out yesterday and said that the Bush tax cut might be repealed early. Let's throw an income tax increase - maybe state taxes too - along with a new tax on gasoline - new tolls on the Garden State Parkway - and see where that gets us in terms of emerging from this collapse. Could this be about the political capital gained by simply blaming Bush for everything - the media will let this repeat for the next 8 years.

Let's keep our eye on the ball here. The currently lower gas prices are an opportunity. Not to increase taxes, but to search for alternatives while still retaining some level of economic opportunity and activity. Let's set a short deadline (how about 3 years instead of 20, 30, never...) for selecting a technology - that will create private sector jobs. The kind that actually pay taxes instead of spending tax "revenues."

These pundits are scary. Their logic shows a complete detachment from actual American life. Anyone looking to more government to solve their problems will be sadly disappointed.

Happy New Year! It is strange out there - and getting stranger.

The Madoff things deepens

I guess I could not resist signing off for Christmas. The Madoff thing claims a life - here is someone involved - according to Bloomberg - commiting suicide. Here is the text of the article.

Madoff Fund Operator De La Villehuchet Found Dead in Suicide

By Saijel Kishan, Katherine Burton and Henry Goldman

Dec. 23 (Bloomberg) -- Thierry Magon de La Villehuchet, who ran a fund that invested with Bernard Madoff, was found dead today in his New York office in an apparent suicide, Police Commissioner Raymond Kelly said.

“Our investigative premise is that it was a suicide,” Kelly said in an interview. De La Villehuchet, 65, was found “with his feet propped up on his desk, a trash pail nearby to collect blood,” and no sign of a second person, Kelly said.

The money manager had “multiple stab wounds” to his arms and wrists, a box-cutter and pills were found nearby, and no suicide note was found, Kelly said. De La Villehuchet was co- founder and chief executive officer of Access International Advisors, a New York firm that invested $1.4 billion with Madoff, who was arrested on Dec. 11 for allegedly running a $50 billion Ponzi scheme.

The death of de la Villehuchet, who founded Access in 1994 with Patrick Littaye, came as lawsuits mounted in connection with investors victimized by Madoff. Fairfield Greenwich Group, a hedge-fund firm that had $7.5 billion invested with Madoff, has been sued by investors for allegedly failing to protect their assets. A New York woman who says she lost most of her savings is seeking $7 million in damages from the Securities and Exchange Commission for Madoff losses.

The tally of investors hurt by Madoff continues to grow. Pedro Almodovar, the Spanish film director known for movies such as “Women on the Verge of a Nervous Breakdown” has about $280,000 at risk, El Economista reported.

Credit Lyonnais

De La Villehuchet was chairman and CEO of Credit Lyonnais Securities USA, the U.S. investment banking arm of the French bank, according to Access marketing documents. Prior to joining Credit Lyonnais in 1987, he ran Interfinance, an international broker firm specializing in French, Belgian and Italian stock markets that he founded in 1983.

Access managed $3 billion and had 26 employees according to marketing documents dated September, and its LUXALPHA SICAV- American Selection fund invested solely with Madoff. Access said last week that it was working with lawyers to assess the situation. UBS AG was LUXALPHA’s administrator until this year, and is no longer involved with it, said Karina Byrne, a UBS spokeswoman.

Clients of Madoff had at least $36 billion with his firm, according to a Bloomberg tally that may include some double counting. Before his arrest, Madoff, 70, confessed to employees that his “giant Ponzi scheme” may have cost as much as $50 billion, according to an FBI complaint.

His misconduct may have stretched back to at least the 1970s, two people familiar with the government’s inquiry of Madoff said last week. Madoff is now under house arrest at his New York apartment.

Merry Christmas to all

It is December 23^rd – Merry Christmas to all. For those who celebrate Hanukah – Happy Hanukah too!

 

Each year at Christmas, many people become depressed. They see the passing of another Christmas and a week later, another year as another turned page in their life. They remember the Christmas celebrations of their youths and think that they can never recapture those – and miss those who were at those long-ago celebrations, not at these.

 

At this particular Christmas, the economic situation people find themselves in has many people worried and preoccupied. Even those not yet hit by slowdowns and layoffs have apprehension that they could be next. And many, despite having healthy incomes, do not have savings to cover a long unemployment. They look at their children or elderly parents and wonder where the money will come from to start their kids out as they were started out – or at their parents to care for them in their old age. They wonder about themselves – what will happen when they are 75, 85, 95 or even older. They’ve come to the realization that the world of their youth is gone. It has been replaced by one where jobs are not forever – in fact, many last less than a couple of years. Security is something you make for yourself, not given by a large company or even a government program.

 

Some years ago, at a conference – I stood up and said, “All of us are 1099ers, many of us don’t know that yet…” Unfortunately, it is truer today than it was then.

 

Since this is a political and economic blog, I feel obligated to make some comments about how the world has changed – but will resist the temptation to make some crack about a star appearing over a mansion in Chicago… :)

 

-          Big companies don’t offer stability anymore. That is a relic. Even for those in India and China – I would not get too comfortable, when your wages rise, your jobs will be outsourced to Cambodia and Vietnam – and eventually Antarctica! For-profit business will always seek lower costs unless incentives or performance measurement changes.

-          Private sector jobs don’t pay for time anymore, they pay for productivity. Stop being productive… face the consequences.

-          Companies figured out in the 1990’s that there was more money to be made (faster) by polishing up the bottom line for the stock market than increasing the top line for real growth. What is better, a 20% increase in share price or a 2% increase in gross sales? We can debate that, but I know which one can be done faster. That phenomenon changed the requisite skill set employers desire. Right now flash is better than substance. And that is not good. When you lose real value, you run the risk of calamity.

-          Many people are not polite anymore. If you don’t believe me, get cut-off standing in line, drive on a NJ road or go to any sporting event – don’t hold your breath waiting for an “excuse me” or even an acknowledging glance.

-          Political correctness has truly taken over the world. Christmas and Hanukah are religious celebrations, not secular ones. It seems that people celebrate the snow falling and the gift giving rather than the true theme of Christmas. The giving at Christmas should be about true charity.

-          Selfishness has taken hold. The Madoff ponzi-scheme is possibly the tip of the iceberg. The distrust of institutions that began with the Warren Commission, Watergate, etc. has permeated every part of our lives – how do we trust retirement funds to swindlers and cheaters? How many of us cut corners and are less than honest in their own lives?

-          Based on the above – the answer for many, at least for a few months – seems to be government. Last month, people voted for a man promising big government. Really big, really intrusive government. That shows desperation. Of course their choice was one guy for really big government versus another guy for really big government… Government will not cure dishonesty, will not cure long term business problems and will not ensure universal happiness.

-          The world is changed. New voters in this Presidential election were born in 1990! They weren’t even alive during the Reagan administration. World War, or for that matter Cold War. Those events are covered in American History 2 classes, not discussed on front porches by those who were there. The great depression of the 1930’s and resulting lessons are the distant memory of only the oldest among us. Unfortunately those lessons need to be relearned.

 

 

But with uncertainty and instability, comes resolve and opportunity. Christmas is a new beginning, and end of one year and one cycle, and the beginning of the next. And the quality of the next one is what you make it. Sure, you need a little luck – some contacts don’t hurt either, but your own attitude, state-of-mind and resolve is what ultimately tells the story of success or failure next Christmas.

 

Remember there is always someone worse off than you. And those are the people to remember now and throughout the year. Despite the trouble in the economy, I am heartened to see some of the charity in my local area this Christmas– and that is great. If we really think about it, despite all the changes and challenges, Americans are still good people at heart.

 

Bottom line is – enjoy your family, the season and care for someone. Honor yesterday, make the most of today and be excited about tomorrow. Merry Christmas. See you in 2009.

Hey - At least W didn't "compromise his free market principles..."

O Christmas Tree
O Christmas Tree
What do we see?
Another $13.4B from you and from me...

After the Republican Senate voted this down - Bush "reaches across the aisle" and grants GM and Chrysler $13.4B. I guess no one has dared tell the President that we're $11 Trillion in debt and that these guys have not made cars anyone wants in a very long time. Nah - just keep on spendin'.

I know the arguments for the bailout. The taxpayers would be left to honor the billions promised those UAW workers who've retired if these companies were liquidated. But isn't there another way?

To have GM and Chrysler reorganize under Chapter 11 might have allowed them to emerge with a chance to survive. All this bailout does is apparently delay the inevitable. The Detroit way of doing business (designing, manufacturing, marketing), is evidently outmoded. The market speaks, day after day, and the "Big 3" loses each time. Chrysler has been to this government till before (under Iaccoca, remember?). Why pour money down this hole when no one thinks they'll survive without big changes? Is that really what leaders do?

On top of it all - it isn't really the American taxpayer who is financing this. It is the Chinese and Arabs - the folks who currently bankroll our government. Bush has been the absolute kingpin of running up debt - and here, in what presumably would be the last time for this - but maybe not, he does it again.

Would it be so wrong for GM to consolidate Buick, Chevy, GMC, Saturn, Hummer, Pontiac, etc. into say, 2 divisions - cars and trucks? Wouldn't that save alot of cash? But, it is so much easier to get the government to give us money - just like all the folks waiting for their check this winter from "the one."

The UAW has long been in the Democrats pocket. That was the real reason the Senate voted as it did - along party lines for the most part. And the reality is, when the numbers change in the new Congress on 1/2/2009, the Democrats could have reintroduced this and passed it.

Does Bush mean that GM can't survive another 2 weeks without this "loan"? If that is really true, how about lending them enough to get them to the end of January and then let the incoming administration figure out what to do? Nah - the liberal President has to prove himself over and over. Like his completely incompetent father - being totally dishonest to the folks who elected him in the name of "kinder and gentler..."

How to kill the conservative movement? Keep nominating "moderate" Republicans. You will never "outliberal" the Democrats - and the media will never like you. Get over it and figure out another way.

Is it January 20th yet?

While President-elect Obama has a press conference almost every day without ever really saying anything specific (other than bringing "change" of course), George W Bush is making the friendly circuit, trying to put a closing quote on his 8 years in office - yes, he was on the Fox News Channel.

You know, he was re-elected in 2004 on the basis of being a "wartime President." Personally, I don't know how Rush Limbaugh, Sean Hannity, Fox News and the rest keep defending this guy. He started the war in Iraq on information unproven almost 6 years later. Meanwhile, more than 7 years after 9-11, bin Laden still is free...

He didn't compromise his "free market principles"? WHAT? He was the BIGGEST spender in the history of this country, leaving us almost $11 Trillion in debt. Read what he said for yourself. http://www.breitbart.com/article.php?id=D954PB1G3&show_article=1

I have heard it said that President's are insulated from reality by their staffs and protectors. But this is truly crazy. Next to Jimmy Carter and maybe Bush 1, this is the worst President of my lifetime - in every way. To use the war as an excuse for incompetence is small. And no amount of spin by FNC will change that.

What's next? Change. To what? Who know's - but it will involve bigger government. And we can all sleep better knowing that, can't we?

Here is a newsflash. Fox News won't like ANYTHING Obama does. MSNBC will LOVE anything Obama does. They will "have a tingle going up their collective leg." And CNN will also love Obama's every move. Katie Couric will want to propose marriage to Obama, while Diane Sawyer will want to have his child. Change is coming!

I will never understand the Northeast!

I have lived in Metro NYC all my life and I will still never understand the politics around here.

Here is an article from today's NY Post dealing with the outrage NYers feel about the "double whammy" of the tax hikes announced by Governor David Patterson and the subway fare increase.
http://www.nypost.com/seven/12182008/news/regionalnews/mta_oks_hike_in_double_whammy_144738.htm

Now, NY/NJ are "one-party" states. Obviously it doesn't matter when Governors resign due to gay affairs, paying prostitutes - or Senators resign due to taking payoffs in hotels - nah - just keep pulling that Democrat  lever.

So here are NYers, little more than a month from voting something like 75% -25% for Obama and the Democrat ticket absolutely outraged that taxes, fees and generally the cost of living has to go up. They are angry about "big government" and the salaries - in this case of the MTA head.

Well, duh! What do you think you just voted for? If you're angry that government is too big and takes advantage - is the answer to vote for more government?

Don't get me wrong. The Republicans have not offered a choice in a long while - McCain was all about big government too. The last time the Republicans nominated a candidate who was against big government and wasn't afraid to say it - Ronald Reagan carried both NY and NJ twice - and by big margins.

I have never seen the confusion on candidates and issues that I see now. And that is too bad.

Prediction

Why do I get the feeling that President-elect Obama just might issue a statement on his (and his staff's) involvement with the Governor of Illinois within the next week?

Yes - I feel like he just might do this either very late on 12/23, or perhaps early on 12/24... just so the news media can pay full attention.

Cynical - absolutely. Let's see if I am wrong.

Congressman Rangel and others "took trips to Caribbean"

So, days after "Change" came to America, Congressman Rangel and other members of the CBC evidently took a "junket" to the Caribbean.

Now, I thought the days of Corporate welfare were over, that Main Street was getting precedent over Wall Street, etc. And now this...

Change is so refreshing. You can feel it coming... And no - this won't be all over the papers... Wonder why?

http://thehill.com/leading-the-news/trips-to-caribbean-appear--to-have-broken-house-rules-2008-12-16.html

Do you ever wonder why people run for office?

I will bet Sarah Palin is asking herself this question. Someone poured accelerant around her church in Wasilla, Alaska  and lit it recently. Isn't that tolerance? Good feelings for all.

Luckily the Governor and her family were not there and no one was hurt. Here is the very sad story.

http://www.breitbart.com/article.php?id=D953B2UG0&show_article=1

This action shows that stupidity has no ideology other than itself. I have not seen this in any other media outlet. Wonder if the media treatment might have been different had the target been Rev Wright's church or perhaps an abortion clinic...

None of this is good or justified in any way. We have elections in this country because we have different points of view. When you ascribe to a point of view, you might think the other side is wrong - or even stupid - but this kind of behavior is so inane, so desperate and yes, so stupid, that it cannot and should not be tolerated. Our electoral process and transition of power is an obvious point of differentiation between the US and other countries. Unlike some places around the world, when someone loses an election here, they go back to peaceful, private life. Obviously that isn't good enough for some...

Time Magazine Honcho becomes Joe Bidens' Communications Director

Read all about it.http://www.politico.com/news/stories/1208/16600.html

There is no bias in the media. Here is Time Magazine's Jay Carney leaving that post (seems like alot of magazines and newspapers are in trouble, so it might be a good time to polish up the resume) to work for Democrat VP-Elect Joe Biden. Now that will be a challenging job in all respects, but ask yourself, if Mr. Carney was close enough to Biden and the DNC to get this post, do you think it could have affected Time's content in the recent election cycle? Why no, of course not, why these people are professionals, blah, blah, blah. Actually many are professionals - but they're also human.

Oh what a tangled web - who is Jay Carney married to? Well, Claire Shipman - objective reporter for ABC News, who (I believe I remember) used to cover the White House beat before moving to her current assignment... I am sure she'd be quick to do objective reporting with her husband handling communications for the VP... Not exactly Woodward, Bernstein and Nixon.

Of course, this "connection" is not unprecedented. In 1992, James Carville and Mary Matalin handled the Presidential Campaigns for Clinton and Bush - they were married and still are - must have been an interesting breakfast table. Andrea Mitchell is married to Greenspan. New Meet the Press host David Gregory is married to the former chief counsel for Fannie Mae... think he is going to break the big corruption story there? And on and on. It isn't only Democrats either - Fox News headline reader Jane Skinner is married to NFL Commissioner Goodell - think FNC is going to break that big steroids scandal? Hey doesn't Fox carry NFL games? In fact, she (I am not picking on her, just using her as an example) is also the daughter of Sam Skinner, former Bush (1) administration honcho. Not to be outdone, you have Mika Brezinski on MSNBC reporting the news - her dad was National Security Adviser for Carter.

These folks are part of Washington - they have collectively become very detached from the rest of us - maybe that is how it should be, maybe not. The fact that some of them meet socially and become married is great for them and certainly their right. But for all the crowing about separation of church and state, there doesn't seem to be alot of separation of press and state... Sounds like the 4th estate is related (closely) to the others.

And the lesson for all of us? Well, News organizations like those mentioned above have one job. No - it isn't to be objective. It is to get ratings! If they fail at this job, no objectivity will save them from the fate of many of the traditionally big newspapers and magazines that technology is passing by.