Headline of the Day

Below the fold from the Financial Times (am traveling for work in the UK this week, so that helps explain the lack of posts) from this piece by Gillian Tett:

Cadbury Schweppes is currently deemed a better credit bet than the British Treasury.

Would any of my readers (ok, there aren't they many of you) like to work on a list of U.S. companies that are better bets than the U.S. as credit risks? Oh, wait - the Treasury OWNS ever private company in the U.S. now anyway......

My initial list would include Berkshire Hathaway, Microsoft, Exxon Mobil, and GE. And probably the UAW as long as Obama is in office and Lockheed Martin as long as the Republican Party still exists.

I Wish He Would Just Go Away

Pat Buchanan..............I mean, why, oh why, does anyone take him seriously? In this thoughtful little illogical rant he claims that since Catholic universities are becoming more liberal and secular, that means America is going to hell.

First off, if his biography is any indication, the guy was nearly expelled from Georgetown for fighting in the 1960's - how Christian is that?

Secondly, Jesuit institutions like Georgetown have been struggling with their Catholic identity for a long time - well before Obama got elected. Georgetown survives because it compromises its identity for DC prestige at the drop of a hat - it's the Jesuit way. See for example this quote from Tim Healy, former president of Georgetown in the 1990's:

Father Buckley criticizes one contemporary expression of the dichotomy of secular purpose and religious inspiration of the Catholic university in his reflection on the philosophy of education of a famous president of Georgetown University, Timothy Healy. Father Healy had claimed that the Church and the university were essentially two radically distinct entities capable of coexisting in a mutually beneficial relationship but only if their mutual autonomy of mission was retained. In Fr. Healy's view, education at Georgetown was to remain "principally a secular business, and the university is a secular entity with a clear secular job to do. The Church can deeply influence how the secular job is done," (Buckley, 80),

Thirdly, would anyone remember this survey that CLEARLY SHOWED the U.S. is getting more Catholic Pat, not less.

But don't let a little data get in the way of a good cultural rant. The right never does.

If I Only Had a Train.....La, La, La, La

This morning the front page of many newspapers in the Midwest contained something like this headline from the Chicago Tribune

High Speed Trains Could Ease Midwest Travel

Now on the face of it, all of this looks very promising. Speaking as someone who has languished on highways around cities such as Chicago, Cleveland, St. Louis, and Indianapolis, I for one would love to save time and money, and avoid the hassle of expressways with fast, convenient train service. But is that what the Feds are offering?

Let's begin by closing our eyes, and imagining. On the White House blog the President said:

What we're talking about is a vision for high-speed rail in America. Imagine boarding a train in the center of a city. No racing to an airport and across a terminal, no delays, no sitting on the tarmac, no lost luggage, no taking off your shoes. (Laughter.) Imagine whisking through towns at speeds over 100 miles an hour, walking only a few steps to public transportation, and ending up just blocks from your destination. Imagine what a great project that would be to rebuild America.

Now setting aside any obvious John Lennon jokes, my imagination is more limited than his in the following ways.

First off, last time I checked, relying on Amtrak to do anything efficiently and cost-effectively is, well, delusional. As this piece points out, Amtrak has been operating with so much red-ink that it already gets billions in taxpayer subsidies and simply cannot compete either in economic or efficiency (read here, the trains don't run on time) terms with anybody. I mean it's one thing to imagine Swiss trains which arrive within minutes of their schedules. It's another thing to wait 8 hours for a train.

Secondly, 100 mph? That's it? Look, Mr. President, you're from Chicago, and I would have thought that maybe you've driven between Chicago and say Indy along I-65 where the posted speed limit is 75 mph. I have because my family is still in Chicago, and I like going to the Indy 500 and getting up at 10 am on Memorial Day Sunday and getting drunk with 350,000 of my closest friends. Mr. President, 85-90 is the "rate of travel" along those roads most days. Getting up to 100 so I can enjoy Amtrak's food and efficient service and late arrivals? No thanks.

Finally, note the second sentence in the President's speech "Imagine boarding a train in the center of the city." Hands up from anyone who lives in the center of a large city today? All assumptions about trains are based on the idea that we are all going to live in central city areas and take public transit. I don't predict the future, but I'm sorry that simply doesn't map anyone's empirical reality outside of say 2.5 cities (NYC, SF, and part of Chicago). No one, NOBODY in St. Louis, Cleveland, Indianapolis, Atlanta, Charlotte, etc. lives in central cities, and with the housing collapse, no one is moving into those areas either.

So I'm going to drive 30 minutes to downtown, park (which I suspect won't be free), wait 8 hours for the train to arrive, hop on, arrive 14 hours late, and miss my appointment, or my birthday party, or the game? And it's going to cost us billions more than the billions we already throw at Amtrak?

In the East Coast corridor - sure, ok. And in fact you'd think that Amtrak would be able to make money with it's Acela trains. And in the past they have managed to squeak out a profit. But this year, with the airlines losing money, now even that route is starting to lose money as they are engaged in fare wars.

It's green, you say, and I say, ok. But why not take the 8 billion and develop the infrastructure for hydrogen transportation when we make that switch to emissions free driving? Or build that new electricity grid you want? Or, hell, I don't know, buy some pandas for a zoo. I just don't see this working, not here, not in suburban, Amtrak cursed America. And certainly not in the Midwest where we don't need intercity trains because it will just mean more people try to run rail crossings and get turned into car pancakes (Yes, that link is as cool as you suspect it might be).

How Much Land?

The Washington Post continues to impress me with its coverage of green issues that seem fair and interested in dealing with fact, not partisanship. Take for example today's piece on the unintended consequences of green energy production.

First off, LOVE, LOVE, LOVE the reference to the potential "unintended effect" from an environment project by a journalist. It's about time that journalists realized that just because someone releases a report predicting what the impact of a sports stadium, stimulus program, or bio-diesel MAY be, it doesn't mean that things will turn out exactly, or at all, as the experts predict.

Secondly, check out the estimates from the Nature Conservancy, hardly a bastion of right-wing, global warming deniers, about how much land will have to be in the energy production business by 2030 as we move towards "greener" energy - 79,537 square miles of land. Folks, here's some perspective - the entire state of New York, not the city, the FRIGGING STATE is only 54,566 square miles.

That's right, green energy is going to consume a ton of land. So green means cutting down forests, plowing under wetlands, and building wind turbines and bio-diesel farms. Unless they plan on painting the turbines and solar panels green, I'm not understanding how this is so green.

Just So We're Clear

I always thought that conservatives were deeply concerned about civil unrest and too much democracy, while liberals defended free speech - right?

Well yesterday officially marked the moment when either we entered some weird, Star Trek opposite universe or hypocrisy is so prevalent that no one - NO ONE - seems to notice it anymore.

Consider the father of conservatism - James Madison - here quoted on the American Conservative Union webpage bashing democracy along with mob rule. And yet we see conservative journalists of every shape and color lauding these protests. Ah folks, will you be cheering as they charge the Bastille?

Consider the liberal iconic days of the 1960's in which people protested for women's rights, gay rights, animal rights, gay-female-animal rights, about as frequently as people drink lattes today. And yet yesterday we saw Keith Olbermann and a ton of other liberal outlets ridiculing people for engaging in free speech. Next thing you know liberals will be idealizing George Wallace.

Yes folks, days like yesterday are why I could no longer, with a straight face, teach about politics anymore. Principles get thrown out the window in a heartbeat. It's about winning, power, access to resources to give to your friends, and then justifying it with broad platitudes. All the while the rest of us pay the bills and continue to struggle along.

In Case You Weren't Already Worried Enough

Megan McArdle has a nice post here about the looming disaster in public pensions. I hate to blow my own horn (ok, I love to blow my horn, that's why I friggin blog!) but I posted on this last year here. It's linked to the broader problem of state and local government deficits and spending which I've mentioned in a couple of posts here and here.

As she notes, these programs were underfunded and the politicians turned to a lot of exotic forms of investment in the past few years.............you guessed it, they were betting on interest rate swaps and other stuff that's now crashed and burned. At least, unlike private investors, they can start threatening people with criminal action like this piece about the state of Tennessee that allowed ONE FINANCIAL SERVICES FIRM to both advise towns on these investments and then sell them at the same time. That was smart. Unsurprisingly all these towns are now in trouble.

The latest example of this that I came across was this gem in Indiana where the water utility lost 100 million bucks on a variable rate financing deal.

If smart people on Wall Street did not understand these things, how in the hell can we expect policy folks and politicians, some of whom were part-time in places like Tennessee, understand interest rate swaps? This is going to be crazy expensive.

How Would Environmental Lobbyists Feel if THEIR JOBS Were Gone?

Mrs. Fundman pointed me to this offensive and poorly thought-through piece in the USA Today on Friday. Once again we see that Greenies are toasting with Tofu-Sparkling Wine and Whole Grain Free-Range Pate to enjoy the suffering of the little people who have lost their jobs.

But thank goodness carbon emissions are down! Apparently the alternative is that the unemployed should grow vegetables in our yards and use solar heated out-houses while enjoying the frost covered sunsets and increased deaths that accompany subsistence agricultural lifestyles. It's much nicer than working at jobs in nasty carbon producing industries that allow them to feed their families, buy cars, send their kids to college and live and retire decent lives. However as long as we still have government subsidies for environmental lobbyists though we can rest easy.

What really galled me about this piece though was the amazingly bad final paragraph. The "reporter" decided to ask a LOBBYIST/RENT-SEEKER/LEECH ON THE TIT OF GOVERNMENT and call her an "expert" when it comes to the matter of whether or not the government should take more of our money and give it to HER. The answer to that question was an unsurprising "Well YES, the government should take more of your money and give it to me, regardless of whether or not you are unemployed or hungry."

Ms. Mazzacurati - screw off.

Read Carefully

This NYT piece is so achingly close to being right that I felt a pang of hope this morning that it would end properly. Of course it didn't. The Times reporters naively place blame for this tragedy on China's "lack of a free press, independent trade unions, citizen watchdog groups and other checks on official power." Trust me folks, the problem is not having "checks" on official power. Y'all won't get anywhere until you have less official power - full stop. Remember when this guy had lots of official power and millions of people died in labor camps? Civil society organizations won't solve the problem of unlimited official power.

Read it carefully and you'll see the problem with all modern societies. It's not greedy businesspeople per se (although they exist). It's not malevolent government officials per se (although they also exist). It's that greedy, subhuman businesspeople bribe malevolent government officials. And together they exploit people horribly.

And then the left gets to call it capitalism and the right screams about government corruption. And poor Mrs. Yang Youbiao will never know whose ashes she has.

Who Are Washington Elites and Who are Real People?

There's a really moving story in the Nation today by Kate Michelman who is a former president of NARAL, which is the nation's leading pro-choice organization - except, I'm not sure how much of it is true.

Read the piece, she tells us that her family faces a horrible health care crisis because her daughter, who was uninsured at the time, had an accident on a horse, and her husband's Parkinson's is bankrupting the family, despite the fact that:

He purchased quality health insurance, including long-term-care insurance, so he would not be a financial burden to others. He enjoyed a long and steady career at an institution that would pay healthcare costs and a modest pension for life. Between his salary and mine, we achieved a reasonable degree of economic comfort--never wealthy but independent, self-sufficient, responsible.

The problem is that later she claims that the long-term care insurance pays only a "fraction" of her care for her husband who has Parkinson's. She also says that she can't work taking care of him, and that she struggles to make ends meet. It's a tough story, and very tragic.

But something here just smells funny. I know I shouldn't feel this way, but OK, I had to do this. So I pulled the 990's from the NARAL Foundation, which is affiliated with NARAL USA (and full disclosure I'm not sure which one is the lobbying arm) and Ms. Michelman was making more than 200k per year from the lobbying and foundation end of NARAL in 2003 after her husband was diagnosed.. So she wasn't starving, at least not what most people would call starving. And I'd be shocked if NARAL didn't give it's president some pretty darn good health care benefits.

And what's stranger, she claims in the article that "she had already stopped working" when they "recently" decided to bring her husband home. But that doesn't seem to square with this 990 from 2007, that shows she still draws more than 100k per year from NARAL for "program services" (check out page 25) even after she stopped working there. Now I mean it could be that they are helping her out in a time of crisis, or maybe she's had to stop working just this year (more on that below), but program services means she was supposed to be working.

But her story now TOTALLY doesn't square with her other part-time work as she struggles along barely making ends meet. Well first off, she does speeches, for money, with this organization who, as you can see from their homepage, are the same people who represent, Bono, Dick Cheney, and Bill Clinton, and Al Gore. Wow, a bunch of down on their luck people if I've ever seen it.

And here's her vita/bio. So as you can see she's listed as important by all of these prominent places like Forbes. She's "close friends" with Bill Clinton. And she's been making 6 figure salaries, in addition to book sales and speaking fees for a long time.

And this is even weirder - according to her story in the Nation, her husband's horrible fall appears to have occurred in October of 2008, but just two years earlier, in 2006, as President of NARAL, and after the dianogsis in 2002 of her husband and her daughter's accident she was contemplating running for the Senate. I guess the health care benefits of being a Senator outweighed her concerns about spending time taking care of her family.

And one more thing - while caring for her husband at home and her daughter, and starving, she still had time last year to endorse Barack Obama, appear on Hardball, and write about the experience in Salon. She was also a senior adviser to John Edwards (and not as a volunteer) and attacked Hilary Clinton, reported here, on gender grounds and accused her of "playing the victim card." Victim card, ummmmmmm Kate, can you talk about that Nation piece?

So my question is this - is our health system really screwed up so badly that someone who played by the rules, makes a lot of money, and has powerful friends still has challenges? Or she is bullshitting all of us? I'm open on this point, and would like your thoughts and comments. Since she's got a picture of herself in front of the capital, has worked in lived in DC forever, and worked for a lobbying firm you can guess my predisposition.

If she's bullshitting us, and playing politics, and maybe lying, then she should really be ashamed of herself. It's one thing to make a policy point, it's another to lay it on thick with personal stories and duplicitous actions in public outlets. A lot of people, a lot of decent people without her resources, overcome challenges and obstacles everyday in terms of family care. Public therapy designed to manipulate is a favorite move of political types - even if it's more like borderline fiction.

The Right's Blame Game

Much as I distrust all politicians, including our president, I find this piece by Stuart Varney particularly hypocritical. He claims, and might even be correct, that the Obama administration is refusing to take the TARP money back from some banks because they want to control them and drive the economy to the left.

Three quick thoughts. First, DUH! The shocking development that a left-wing Democratic president wants to pursue a left-wing agenda is hardly news. Second, BUSH MADE THEM TAKE THE MONEY. Third, who started this problem and came begging for government money? That would be the banks.

Now they don't like the predicament they are in. Cry me a river. They made their beds, and now they can sleep in them. As Goodfellas should have taught everyone by now, if you choose your business partners poorly, bad things happen.

Bankers and investment firms have no one to blame but themselves, and since the rest of us are already paying their tab I hardly think they also need my sympathy.

Messed Up Priorities

I found out today that apparently it's your right as a state employees in Colorado, to be able to call 9-11 victims "Little Eichmanns." Ward Churchill, an insane "ethnic studies" professor at the University of Colorado wrote that 9-11 victims were "Little Eichmanns" and unsurprisingly got fired from his job. He filed a lawsuit and won his job back.

Even conservative academics, like these folks, seem to be defending him on the grounds of "academic freedom." Are they as loopy as he is? Taxpayer money is funding universities during hard economic times and giving away lifetime employees to nutjobs who should be living with the Taliban in the hills of Pakistan eating cockroaches and running for their lives from predator drones, not smoking pot in Boulder.

In the meantime we continue to give people who've made all sort of mistakes, like homeowners and bankers bailouts and bonuses.

Bill Clinton famously said that he wanted to reward people who "played by the rules." Well someone has either been changing the rules or those of us who have been playing by the rules need to reconsider our lives. I've never asked for a bailout, a lifetime job, a "do-over" on bad investments or special treatment in general. I'm just a Midwesterner with a mortgage, family, job (at least I hope so on Monday) and a support network of friends and neighbors. Stop distorting the incentives we all should be living by and maybe we wouldn't encourage people to do stupid things again and again.

This is Not the Great Depression Part 65

Would someone please tell Paul Krugman and his ilk, and anyone else who is going on about how we are on the verge of another Great Depression to get out of their university offices and look around at say, Yahoo or maybe home prices.

IF they did, they'd come across this piece on what the best things to buy during this downturn are BEFORE things get better. This suggests to me that a fair number of people are acting exactly as the neo-classical or Austrian model suggests - rationally.

Don't believe me? Google "foreclosures for sale" and you'll find a billion sites that tell you how to make money buying foreclosed homes.

Times are hard, there's no doubt. But to continue to compare this to the end of the world defies empirical reality and stinks of political fear mongering.

Be Very Afraid

James Madison must be turning over in his grave. Madison was the short Founder seated in the middle of the famous Christy painting of the signing of the Constitution. He was trained at Princeton, which was weird for a Virginian. And he most famously married Dolly who will forever have a soft spot in my heart for all of the cavities I got from eating the Zingers and Twinkies.

I didn't read much about James until I got to grad school where I rediscovered him and his most famous work, Federalist #10. He, Alexander Hamilton, and John Jay, wrote a series of anonymous articles defending the newly written Constitution in newspapers and broad sheets in the U.S. They were instrumental in helping to get the Constitution ratified amid more opposition from the Anti-Federalists (yes, they lacked a good PR firm) than American historians tend to remember.

What did Madison say in Federalist #10? He said basically that any free system of government had to acknowledge that people were going to form groups that had competing interests. We could not, EVER hope on the goodwill of people to do the "right thing," because liberty meant people would have the right to organize and promote their ideas and interests.

Instead, we'd need to rely on having a large country with a lot of diverse interests that would check each other. Groups would battle it out in politics and hopefully we'd get a more limited government rather than one dominated by the interests of the few.

Well Madison would be very afraid of this description of the unholy alliance that's forming over the Cap and Spend/Trade bill that was introduced in the House yesterday. I think anyone would expect that environmentalists would support a limit on carbon emissions. That's obvious. But the Mother Jones piece notes that industrial and economic interests that pollute also like the bill.

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That's what you should be thinking first, but then you should be thinking the following:

WHERE'S MY WALLET?!

Whenever two opposing interests have united over a bill it is not NEVER EVER EVER EVER EVER EVER EVER EVER EVER a good thing. What it means my friends is that a deal has been cut in which both of these interests are going to get something they want at our expense - the taxpayers. And in this case it's that we are going to have carbon limits legislated that we will have to pay for and we will have massive subsidies to polluting industries as well that we'll have to pay for.

In other words, Madison's system has failed to have the fight between two interests that produces a limited government. Both sides have gotten something from the state, and we are paying far more than we should for an imperfect outcome.