November 30, 2011--College $ports

While Penn State University continues to reel and cover up its involvement in the pedophile scandal surrounding its assistant football coach and Syracuse University goes through similar gyrations concerning its big-time basketball team's assistant coach, out in Ohio, at Ohio State, at that football factory, they just announced the signing of Urban Meyer as their new football coach.

Their football program too has been in trouble. More systemic trouble than at either Syracuse or Penn State--the usual mix of recruitment violations and money changing hands between player and alumni boosters.

But so much money is involved in the sports program that there is no stopping the cheating, shame, and exploitation of the young men who come to these places to play team sports in the unlikely hope of being drafted by one pro team or another.

At institutions such as Penn State, Syracuse, Ohio State, and almost all other Division I colleges it is unusual to see more than half the athletes graduates (many of those with Mickey-Mouse majors) and even fewer selected by the NFL or NBA. While their colleges reap tens of millions by appearing on TV or participating in bowl games, most of their athletes are taken advantage of--they serve as fodder for the fantasies of students and alums. The entire purpose of a college education is distorted while student bodies are fed a frenzied diet of fun and games.

Symbolizing this is the fact that the coaches are paid much more than their universities' presidents and report to the athletic department, not the president, which is often structured as a separate corporation so as to avoid being responsible to the institutions' CEOs or required to follow campus governance rules.

So at Ohio State, Urban Meyer's salary and bonuses (he will get extra if the Buckeyes get to a bowl game) will be at least three times what the president makes. While the team waits to hear what sanctions the NCAA will impose to punish them for its various violations, Meyer's new contract will pay him $4.0 million a year for four years. The president earns "only" $1.32 million annually.

The real scandal is not that some Ohio State players accepted tattoos as gifts--yes, tattoos--but that the adults who should be held responsible for their education and well being are encouraged and allowed to get away with turning their institutions into pay-for-play entertainments.

November 29, 2011--Smoked-Filled Room

Since there appears to be a chance that Ron Paul might have the ground game and money in place in Iowa to win the caucus there in early January, I thought I should conclude my visits among the GOP candidates by offering a word or two about him. Particularly how his strict constitutionalist libertarianism and stubborn consistency yield an array of policies that range from the inspired to the ridiculous.

At the inspired end are his positions on military intervention (we should get involved overseas only when directly threatened and with the unambiguous endorsement of Congress); drugs (we should end the war on them); the death penalty (he's against it); torture and the so-called Patriot Act (he's against both).

At the lunatic end of the policy spectrum are his views about Medicare and Social Security (since they are not explicitly mentioned in the Constitution he opposes them); the Federal Reserve (he would abolish it and allow banks to print and circulate their own currency--how 18th century); and he would eliminate the CIA and the Civil Rights Acts since, again, they are not included in the original, unamended version of the Constitution.

When he embraces these policies it leads to his casually accepting the idea that if a sick person cannot afford to pay for his care he should be allowed to die in a ditch (he once actually said this). Or his hometown of Galveston should not be helped by any government to recover from the devastating 2008 Hurricane Ike (he voted against FEMA aid).

But he has his fervent followers and funders. If you travel around Iowa and Florida and places in between the only lawn signs you see are for Paul. There is not one in sight for Romney.

Having said all this, I will take a pass on saying much more about Dr. Paul because with Newt Gingrich's rise (and lack of fall in spite of the "liberal" position on immigration he staked out at last week's debate), I see something else gathering steam. I mean smoke--a brokered convention.

In the past all conventions were brokered. Party leaders met and in legendary smoke-filled rooms bargained with each other over whom to nominate. With the primary and caucus system in place for both major parties brokered conventions these days are rare. Candidates come in with enough delegates in hand to win the nomination on the first ballot.

The last brokered conventions occurred some decades ago--Republican Thomas Dewey was nominated this way in 1948 as was Democrat Adlai Stevenson four years later. The last nominee produced by a brokered convention who won the presidency was Franklin Roosevelt in 1932. So it admittedly is a rare occurrence.

This election cycle, however, things might revert to past practice.

Traditional Republican Party leaders have been reluctant to get on board Mitt Romney's bandwagon, such as it is, and fewer than a quarter of GOP primary voters say they will vote for him in the primaries. Because most of the states in which primaries are scheduled will divide delegate proportionately--the winner does not take all the delegates--it is quite possible that in Georgia, Texas, Illinois, Missouri, Tennessee, and Idaho, among many others, Romney will get this 25%, Newt his 25%, Paul his 15%, Bachmann her 15%, Cain his 10%, and Perry his 10%. (I am assuming that by March when the proportionately-divided primaries are held Santorum and Huntsman will have dropped out.)

If this were to occur--and it could--in Tampa in August at the Republican convention a number of nomination ballots will be taken and if there are no back-room deals struck between the announced candidates the convention would in effect be turned over to the GOP establishment who would undoubtedly try to convince a Jeb Bush or a Mitch Daniels to get in the race. And one of them, or a Mike Huckabee, could win the nomination.

Among other things it would push the less-than-popular Mitt and corrupt and hypocritical Newt aside and generate a lot of excitement. A version of the kind of enthusiasm, forgive the comparison, Sarah Palin brought to the otherwise moribund McCain campaign three years ago.

The media loves an exciting political horse race and so does the public. It's like a reality TV show. For this reason as well, it is not a stretch to imagine the unfolding of such a tumultuous scenario. During the summer doldrums it could be fun. Better than reruns.

November 28, 2011--Black Monday

During our November sojourn in New York City, we have been trying to do some New York kinds of things.

We've been to the theater to see Follies (disappointing--no spark); the Museum of Modern Art (less a place to be transported by works of genius, with the crowds, more like a transportation hub); we walked the full length of High Line Park (the best new thing in the city in decades); and, as New Yorker as it gets, we've been hunting for new restaurants (so far Il Posto Accanto way east on 2nd Street is to be recommended).

After MOMA last Monday, wanting something lower-key and indigenous, we made it over to our favorite Midtown luncheonette, Viande, which for many years has served ordinary folks like us as well as the rich and famous (Spike Lee was there) its legendary all-white-meat turkey chef salad doused in homemade Russian dressing. They roast the turkeys in their sliver of a place (only tables for two are available) and when done to perfection hack the meat off the bone and generously heap it on a bed of chopped lettuce tossed with hunks of fresh tomatoes and cucumber. As Michelins might say if they rated such places, Viande is worth a detour.

And it is right across from Barney's where we hoped their traditionally funky holiday windows might be ready for viewing. From the crowds, including the paparazzi, we thought we were in luck.

So when we had downed the last scraps of turkey, we dodged the rampaging taxis to cross Madison Avenue and arrived, gasping for breath, on the other side only to find the shades on the windows pulled fully down. But with tantalizing signs on them promising--

THE BARNEYS HOLIDAY WINDOWS GET THE GAGA TREATMENT

"The Lady Gaga treatment?" I asked no one in particular.

"Of course, silly," Rona was quick to say--she is up on matters of this kind. "Is there another Gaga?"

"Let me check with one of the paparazzi," I said. "That must be why they're here. Lady Gaga herself is probably about to raise the shades on her windows. It's not that cold out, maybe we should . . ."

I could see that Rona was already rolling her eyes. She hates gawking. Especially my gawking. Here only tourists gawk. Real New Yorkers pretend not to be interested in the likes of a Lady Gaga.

Nonetheless, risking Rona's disdain, I approached one the photographers and asked what was happening. He turned out to be British; and, since Brits know their gossip better than anyone, I was pleased that I had instinctively made such a good choice about whom to ask.

"Yes, Lady Gaga is scheduled to be here," he said, sounding bored. I assumed that in early years he had probably chased after Princess Di so what's the big deal to him about someone self-named "Lady."

"To . . . ?"

"To do her usual thing. You know--make a big entrance, disappear into the store, and maybe raise some of these bloody window shades. I can only imagine what's behind them. Probably Lady Gaga mannequins in examples of her costumes. Perfect, just perfect."

"Because?"

"Because it all about money and shopping. This is Barney's after all and . . ."

I cut him off. Though I've been spending time with the Occupy Wall Street participants, I wanted a break from bashing the rich. "When is she due to arrive? I assume she's already late."

"Ten tonight."

"Ten tonight and you are already here? It's only 3:30."

"Maybe she'll be early. She does that all the time to shake us off her trail."

I shrugged and looked for Rona who was drifting around, ignoring the bustle, not wanting to appear as if she was waiting for Lady Gaga or anything else her scheduled appearance might elicit. "Let's go," I said. "Nothing's supposed to happen for hours." Rona smiled knowingly.

The next day, last Tuesday, in the New York Times I read about what all the hullabaloo had been about. Yes, as Madonna had done some years ago, Lady Gaga designed Barney's holiday windows; but as Gaga is nothing if not smart she also is supplying Barney's with 220 Gaga-themed Christmas gifts. Some are quite affordable like a $35 spin toy in the form of an egg which opens to reveal a tiny Lady Gaga inside--just like the egg she arrived in at this year's Grammys; cookies in the shape of some her most famous outfits, including her iconic meat dress--$85; and black stiletto Christmas stockings that will set you back "only" $65.

Then of course among the 220 items there is some high-end merchandise such as a necklace of crystal and jet beads that looks like a shattered disco mirror ball that will set you back $1,630. And, I almost forgot, a chocolate shoe. Yes, a shoe made of chocolate. It is a replica of a pair designed for her by Alexander McQueen before he committed suicide. He made made a few pairs for her video, "Bad Romance." They cost a cool $10,000, so the asking price for the chocolate one is a steal at $95.

Interviewed at Barney's, I assume ironically Gaga said, "Oh, it's fun. It's the dream of what music and culture are all about, and those are things you can get lost when you focus too much on commercialism."

One more thing--she showed up at 4:30, less than an hour after we left. We should have . . .

November 25, 2011--Black Friday

Every year all the newspapers and every TV station run reports about Black Friday, the day retailers hope that on their P&L statements they will finally begin to show a profit, move from the red into the black.

The stories are always about how much sales are expected to increase over the year before, how early the stores will be opening, and then the frenzy when the doors finally are opened and shoppers--many of whom have been lined up for days--literally trample each other in a race to buy the latest flat-screen TV for 75% off.

This year, Occupy Wall Street which, if nothing else, has raised awareness about growing economic inequality, some of what is being reported includes inequalities in holiday shopping itself. Would the following have appeared even in the "liberal" New York Times--replete this time of year with ads for Tiffany and Rolex--if not for the Occupy folks?

One the front page, above the fold, under the headline, "Opening Day For Shoppers Shows Divide," the Times reports:

As the busiest retail weekend of the year begins late Thursday night, the differences between how affluent and more ordinary Americans shop in the uncertain economy will be on unusually vivid display.

Budget-minded shoppers will be racing for bargains at ever-earlier hours while the rich mostly will not be bothering to leave home.

Toys “R” Us, Wal-Mart, Macy’s, Kohl’s, Best Buy and Target will start their Black Friday sales earlier than ever — at 9 and 10 p.m. in some instances — with dirt-cheap offers intended to secure their customers’ limited dollars. A half a day later, on Friday morning, higher-end stores like Neiman Marcus, Saks Fifth Avenue and Nordstrom will open with only a sprinkling of special sales.

The low-end and midrange retailers are risking low margins as they cut prices to attract shoppers, while executives at luxury stores say that they are actually able to sell more at full price than in recent boom years.

“We’re now into a less promotional environment than we were before the recession,“ said Stephen I. Sadove, chairman and chief executive of Saks. In the third quarter, for instance, Saks reduced the length of an annual sale to three days from four, and excluded the high-margin category of cosmetics from another regular sale.

The Times goes on to note that Neiman Marcus, via their "fantasy" catalog, which traditionally features very high-end stuff, this year, within 50 minutes, sold out of Ferraris at $395,000 each. All 10 of them.

November 24, 2011--Giving Thanks

It is not enough to be thankful for the good things in our lives. This year especially it is essential to do all we can to find and participate in activities that will bring more goodness into our and other's lives.

November 23, 2011--Newt: Answering the Attacks

I promise to move on after Thanksgiving to subjects other than the Republican race for the nomination.

But with Newt Gingrich surging in the polls, including and especially in Iowa, which means he has a real shot at the nomination and thus the presidency (Obama is that weak and compromised), I cannot restrain myself from writing once more about how Gingrich, as a historian of his own life story and ever-shifting policy positions, specializes in shaving the truth. I'm being kind.

On his Website (linked below) he takes on what he sees to be unfair attacks on his record of equivocation and out-and-out calumny and greed.

It is worth perusing his responses to all 13 "attacks" because his slights of hand and subtle distortions offer a window into his mind and, should I say, soul.

Take his migrating views on healthcare reform as just one of these windows, particularly his views about requiring everyone to purchase insurance through the so-called individual mandate.

He has been caught being on at least both sides of this issue. Forget for the moment that according to Business Week his "consulting" (read lobbying) firm, The Gingrich Group LLC, was paid an mind-boggling $55 million between 2001 and 2010 to persuade Republicans to support the individual mandate; but then when Obama embraced it, simply to undermine him, Newt had to do some fancy dancing to get in synch with the Republican talking points and oppose it and him.

Retrospectively, he now contends that he also supported the mandate during the Clinton years because the healthcare plan emerging from the White House--under Hillary's heavy-handed leadership--called for a single-payer system. In other words, he didn't like the mandate idea but politically had to put something on the table, anything other than Hillarycare. Get the partisan similarity?

But then more recently, follow this closely, he contends that when he saw how disastrous the individual mandate was playing out in Mitt Romney's Massachusetts, he changed his position again and came to oppose it. Nice. Very nice.

No one ever said Newt isn't a clever boy. And therefore dangerous.

There are many other equivalent changes of position--or, if you will, flip-flops--all based on half truths and replete with edgy self-justification. For example explanations or denials about how he was against the Paul Ryan budget before he was for it or how and why he changed (or didn't change) positions on ethanol, abortion, TARP, Libya, the Department of Education, immigration, and of course Freddie Mac, for which he was paid nearly $2.0 million not to lobby.

The last of the 13 attacks he "refutes" has to do with his "personal life." About this I will restrain myself from commenting. It is erev Thanksgiving after all. But it is there on his Website for you to look at if you are inclined and want to spoil your appetite for giblet gravy. Or hate NFL football.

November 22, 2011--The 99%

In Iowa, at Saturday afternoon's "Thanksgiving Table Forum" hosted by the Family Leader, a Christian organization that encourages its members to consider their religious views when making political decisions, six of the Republican candidates attended. Mitt Romney and Jon Huntsman, the two Mormons in the race, were conspicuously absent.

It was thus a discussion about Christian values and Mormons did not feel welcome.

The six tried to outdo each other in putting their piety on public display. One after the other they proclaimed how they have "turned their life over" to Christ and how, if elected president, they would take every opportunity to express Christian values and pray as conspicuously as possible.

Newt, the latest front runner, took the opportunity to give examples of his own version of Christianity. This included taking a nasty swipe at the Occupy Wall Street movement. Ignoring the Golden Rule--the foremost expression of Christian ethics--after castigating them for causing governments to have to spend money to clean up after them, he said:

All of the Occupy movements start with the premise that we all owe them everything. They take over a public park they didn't pay for, go to bathrooms they didn't pay for, beg for food from places they don't want to pay for, instruct those who go to work to pay the taxes to sustain the bathrooms and to sustain the park, so they can self-righteously proclaim that they are the paradigms of virtue for which we owe everything.

Now that is a pretty good symptom of how much the left has collapsed as a moral system in this country and why you need to assert something as simple as saying to them: ‘Go get a job right after you take a bath.’

I assume he bathes regularly at his own expense though about that job business, well we know how he's been making a living all his life--after being a government worker for decades as a member of Congress, he cashed that in and has subsequently made millions as an influence peddler.

He did, though, provoke me to think more about the Occupy folks. From my experience during the past two weeks down at Zuccotti Park and then participating in various marches and demonstrations, it is true that the movement has attracted some street people and radicals. But overwhelmingly, they are rather cleaned-up college-age folks who have been polite and well mannered. Even when it was apparent that the police were getting frustrated by having to spend long hours out on the cold streets in the middle of the night, when a few were clearly itching to bust a few heads, all things considered nearly everyone involved behaved with restraint.

On the other hand, this is not true for the UC Davis campus police who have been pepper spraying submissive student demonstrators. Films of the police casually and deliberately spraying squatting, hand-holding students in the face at point blank range has a large segment of the population outraged after the video went viral. The situation is hardly the equivalent of Kent State but is chilling nonetheless.

About the UC Davis police, a friend asked, "How can they do that? Don't the realize that they too are part of the 99 percent? They're spraying their own children."

I said, "Not exactly," meaning that though the 1 versus the 99 percent may be an effective shorthand way to mobilize people, it also masks a more complicated reality.

Not everyone in the bottom 99 percent is in the same circumstance nor has the same grievances. Many do share a deep frustration about the direction in which the country is trending--especially the hollowing out of the middle class--but not about it causes; what to do about righting things; and more profoundly, how they view themselves in relation to each other.

The police in Davis, for example, were not spraying their own children.

If their children are in college at all, it is likely that they are going part time to a local community college. If they have job opportunities, they will likely be in food services or health care. There are exceptions, but their children are less likely than UC Davis students to earn bachelors degrees much less think about graduate or professional school. Though an increasing percentage of young people are continuing to live with their parents until at least their late 20s, the children of the police have undoubtedly been living at home during their community college years while the UC Davis students have been living in undergraduate dorms.

All the families may be struggling but not in the same ways. If we think about this in class terms, as important as disparities in income and assets are, it is only part of the story. Class, true, is largely about money. But there is great variation in the earning capacity of the 99 percent. To be among them means earning anywhere from nothing to more than half a million a year.

But class is also about culture. To be of modest income but well educated (teachers come to mind) locates one higher in status than a less well educated, higher paid Wall Street worker. The culture of class also suggests how one spends leisure time, how one vacations, what one watches on TV or reads, even what and where one eats. People are thus distributed in the social hierarchy by many more things than just income.

As a result, part of what divides those of us in the "bottom" 99 percent is the comparative perception of privilege and entitlement. Valid or not, this is what Newt Gingrich, a spectacular demagogue, is playing on. He recognizes this lack of common class consciousness, how the under-educated resent the style and at times self-righteousness of the better-educated elite, even if an auto mechanic, nurses aide, carpenter, or policeman makes more than a college professor or newspaper reporter.

The fear among the true corporate elites and their conservative political allies and enablers is that the Occupy movement will figure out a way to bridge these economic, cultural, and emotional differences and thereby find common cause. Then the folks out in Iowa who at the moment are being successfully distracted from their own economic interests and are being pandered to around issues of "values" might say, "Enough." Think about how powerful that would be.

November 21, 2011--Santorum?

Since Newt Gingrich is likely to turn into the next Donald Trump, Michele Bachmann, Herman Cain, or Rick Perry--having his week at the top of the Republican polls as the latest non-Romney before experiencing free fall as the result of either gaffs or the public finding out, as in Newt's case, about his blatant lying and hypocrisy, I will save the GOP from the heartbreak of falling in love next with Rick Santorum by preemptively reminding them about the real Rick.

Out of human concern, the last thing we want is to see is him rising from his current 2 percent in the polls to 23 percent (topping Romney) before plummeting back to Bachmann territory (6 percent) or like Tim Pawlenty or Bobby Jindal or The Donald having to drop out entirely.

He at least is the real deal--a genuine ultra-conservative who believes in less government than perhaps even Ron Paul. In response to Herman Cain's radical tax plan, he said, “Herman Cain has his nine-nine-nine plan, I have a better plan, zero-zero-zero.”

He refuses to be specific about how money would be raised to fund his favorite government jobs program--the Defense Department--but unlike the other Rick, Rick Perry, he is able to come up with a full list of government departments to eliminate, starting with Education, Commerce, and Energy.

When it comes to Medicare his position can only be considered bizarre. He fervently supports Paul's Ryan's plan to privatize it--to give Americans the right to choose their own health care plans, including not to have one at all, and for government to stay out of the way. Fine. But his idiosyncratic spin is to link an optional Medicare system to D-Day. Yes, that D-Day when American soldiers hit the beaches of Normandy 67 years ago. In fact, last June 6th, to mark the occasion, Santorum said--

Almost 60,000 average Americans had the courage to go out and charge those beaches on Normandy, to drop out of airplanes who knows where, and take on the battle for freedom.

Average Americans. The very Americans that our government now, and this president, does not trust to make a decision on your health care plan. Those Americans risked everything so they could make that decision on their health care plan.

For years I have been reading about the history of World War II never realizing that we went to war to enable "average Americans" to make decisions about "their own health care plan." All along I thought it was about defeating Hitler and Nazism.

With Michelle Bachmann and Newt Gingrich, I now see that the Republican field is replete with historians.

And then, of course, there are Rick Santorum's views about modern science (he is in effect against much of it-- from being opposed to stem cell research to not believing in climate change) and, most famously, about homosexuality.

Actually, much of Santorum's political life has involved itself with sexual issues. Enough so that one might well be waiting to learn more facts about the candidate's own private life. In the spirit of he doth protest too much.

He never fails to remind audiences about his children. Not just that they are being home schooled so as to protect them from blasphemous "theories" such as evolution and to allow them to pause frequently in their lessons so that they can pray, but more that he has seven of them. A father's pride, yes, but also clearly to demonstrate his own virility and potency.

When it comes to condemning homosexuality, he predictably says he would reinstate don't-ask-don't-tell on Inauguration Day, but also that he would work to pass the Defense of Marriage Act because if gays are allowed to marry there would be even worse consequences:

[I have] a problem with homosexual acts, as I would with what I would consider to be acts outside of traditional heterosexual relationships . . . If the Supreme Court says that you have the right to consensual [gay] sex within your home, then you have the right to bigamy, you have the right to polygamy, you have the right to incest, you have the right to adultery.

These latter views, I suspect, may wind up winning him the votes of many social conservatives in Iowa where the first caucuses are just weeks away. By that time Gingrich should have dropped in the polls and with no other challenger to Romney in sight, Santorum might turn out to be the one.

But beware, his radical views and perhaps personal skeletons-in-the-closet may be waiting to derail his ultimate chances. Thus, why not get over looking for a Romney alternative among the current announced candidates and see if Jeb Bush or Mike Huckabee might be persuaded to step in to save the day.

November 18, 2011--The Congressional Top 1%

After 60 Minutes last Sunday aired a piece that exposed how members of Congress and their staffs are able to buy and sell stocks with the foresight of insider information while avoiding the law that affects the rest of us, conservatives have been contending that one of the members who has done especially well by inside trading is Nancy Pelosi.

She apparently has and, in the spirit of bipartisanship, so has the current Speaker, John Boehner.

But, not able to control themselves whenever it comes to Nancy, Republicans further assert that she is the wealthiest member of Congress.

Not true. She is loaded but is far from the richest. Senator John Kerry has that distinction, largely thanks to his wife, Teresa Heinz Kerry. Nancy is "only" 17th on the list below, which is a little out of date since it includes the deceased Ted Kennedy.

The top 17 is also fully bipartisan--9 of the 17 are liberal Democrats.

And clearly marrying well is a good idea. In addition to Kerry, among others, just ask John McCain, whose wife Cindy is worth at least $100 million while poor John is literally that--poor-if you can believe him, with personal assets of less than $100,000.

Read the list and weep:

1. Sen. John Kerry (D-Mass.)
$230.98 million

The Massachusetts Senator claims the mantel of richest Member in the 110th Congress. Kerry’s actual holdings, however — including those of wife Teresa Heinz Kerry, widow to ketchup heir Sen. John Heinz (R-Pa.) — are likely much greater.
In an April 2008 article, Forbes.com estimated Heinz Kerry’s net worth at $1 billion.

Kerry’s disclosure forms list the value of more than 180 assets — including Heinz family trusts and investment funds — only as “over $1 million,” rather than the more specific ranges including $1 million to $5 million. Senators are allowed to list assets in the “over $1 million” category only if the items are held independently by a spouse or dependent child.

2. Rep. Jane Harman (D-Calif.)
$225.96 million

The wealthy Californian, who remains heavily invested in Harman International Industries, has seen her wealth increase nearly $10 million since filing her 2006 report.

Harman’s report lists three accounts, including one held solely by her husband, totaling a combined minimum of $125 million in stock and options in the company. Harman’s spouse founded the company, which manufactures electronics under the brand names AKG Acoustics, Harman Kardon, Infinity and JBL, among others.

In addition, Harman, who has no outstanding debts, lists a trust fund worth $1.8 million and an additional $2 million in multiple hedge fund accounts.

3. Rep. Darrell Issa (R-Calif.)
$160.62 million

The Golden State lawmaker added $2 million to his bottom line in 2007, increasing his fortune by a little more than 1 percent.
Issa, founder of the Vista, Calif.-based Directed Electronics, which manufactures car alarms, claims an investment worth at least $50 million in DEI and $25 million to $50 million in Greene Properties Inc. Both corporations own and operate office and industrial properties in California.

His portfolio also comprises numerous investment funds, including a dozen valued at a minimum of $5 million each.

4. Sen. Jay Rockefeller (D-W.Va.)
$80.40 million

A descendant of oil tycoon John D. Rockefeller, the West Virginian’s vast assets remained stable in 2007, as his net worth increased by a little more than 1 percent.

Rockefeller’s fortunes are stored primarily in three blind trusts with JPMorgan Chase & Co., Wachovia Corp. and United National Bank, valued at more than $50 million, $25 million to $50 million, and $5 million to $25 million, respectively.
Another family trust is listed at simply “over $1 million.”

The Senator lists at least $5.5 million in debt on two loans, down from $6.5 million in 2006, when he listed an additional $1 million loan from United National Bank in Charleston, W.Va.

5. Rep. Robin Hayes (R-N.C.)
$78.96 million

The Tar Heel State lawmaker’s wealth more than doubled since 2006, when he identified about $36 million in assets.
According to Hayes’ office, the increase, including more than $36 million in new trust funds, is the result of an inheritance. Hayes’ mother passed away in 2007.

Among the holdings in Hayes’ numerous trust funds are a mix of stocks and bonds, as well as properties including land in Lake County, Minn., and Sheldon, S.C., valued at least $5 million and $1 million, respectively. The funds include at least $1 million in stock in corporations such as Exxon Mobil, Royal Dutch Shell, Merck, Pfizer, General Electric and Altria, the parent company of Philip Morris USA.

The North Carolinian also lists a commercial loan of at least $1 million to finance his private airplane.

6. Rep. Vern Buchanan (R-Fla.)
$65.49 million

Buchanan, the owner of several car dealerships, watched his wealth dip slightly in the past year, dropping $1.74 million, or more than 2 percent below his 2006 total.

While the Florida lawmaker’s empire — comprising several automobile dealerships, an aircraft charter business, real estate holdings and investment accounts — amounts to $102.34 million, it carries with it nearly $37 million in debt.
Included in that figure are new purchases in 2007: a King Air 350 aircraft and a Learjet, both listed as debts valued at $5 million to $25 million from SunTrust Leasing of Baltimore.

He also lists an Embraer Legacy from the same creditor for $5 million to $25 million.

7. Sen. Frank Lautenberg (D-N.J.)
$55.33 million

Lautenberg, who made millions from the payroll processing company he created five decades ago, reported that his total minimum assets jumped about 24 percent, from $45 million in 2006, but that number is still not very revealing. Lautenberg’s two biggest assets are two blind trusts that he set up for himself, each worth $5 million to $25 million. Together they count for $10 million of his assets for this list, though they could be worth five times that amount.

The major increase over last year appears to be in his wife’s assets. She has several family trusts in her name, mostly holding real estate, and between 2006 and 2007 she received additional assets from her mother, Lautenberg’s office said.
So in 2006, Lautenberg reported that through an entity called LCBS Corp. his wife held “over $1 million” of Mira Loma Associates, a company holding residential real estate in Riverside, Calif. In 2007, Mira Loma was listed twice at “over $1 million” — once as part of LCBS and once as a separate asset in Bonnie Englebardt Lautenberg’s name. Several of her family trusts also purchased real estate and other assets worth more than $5 million in 2007.

8. Sen. Dianne Feinstein (D-Calif.)
$52.34 million

Together with her husband, financier Richard Blum, Feinstein claims a diversified portfolio that grew by $1.8 million, or an increase of just under 4 percent, since 2006.
The Californian lists assets with her husband that include ownership of all or part of numerous limited partnerships.
Among those, the Blum Family Partners, owned entirely by Blum, claims “over $1 million” in stock in RAE Systems, a manufacturer of chemical and radiation detection equipment. The fund also includes “over $1 million” in a real estate investment trust.

In addition, Feinstein lists a $5 million to $25 million investment in Carlton Hotel Properties in San Francisco and owns condos in both Tahoe City, Calif., and on Kauai in Hawaii, both valued at $1 million to $5 million.

9. Sen. Edward Kennedy (D-Mass.)
$47.62 million

Much of Kennedy’s wealth stems from family trusts, and the Massachusetts Senator reported almost no change in 2007, with an increase of less than 1 percent. Kennedy lists one family trust valued from $25 million to $50 million, as well as four trusts worth at least $5 million each and a blind trust totaling at least $1 million.

The Bay State lawmaker also owns a rental property in Hyannisport, Mass., valued at at least $1 million and lists a plot of undeveloped land in Lafayette, La., owned by his wife, worth from $500,000 to $1 million.
Kennedy lists $1 million in mortgage debt from Northern Trust Co. for his Hyannisport property.

10. Sen. Gordon Smith (R-Ore.)
$28.65 million

If you take financial disclosure forms seriously (never a good idea), you might be led to believe that Smith’s net worth tripled last year. His 2006 financial disclosure form disclosed net assets of about $8.5 million.

But Smith’s worth is largely derived from Smith Food Sales, a purveyor of frozen vegetables. In 2006 he listed that asset as being worth $5 million to $25 million. In 2007, the value has jumped to the next category, $25 million to $50 million, so even if the value of the asset rose from just under to just more than $25 million, the effect on the disclosure form is to add $20 million to Smith’s minimum net worth. Since Smith doesn’t have to report the assets of the corporation, his actual net worth may be far above what is reported on the Congressional form.

11. Rep. Michael McCaul (R-Texas)
$23.93 million

The Lone Star State lawmaker saw his wealth increase by more than $6 million in 2007, largely thanks to his wife’s investment in a San Antonio real estate partnership. According to his disclosures, Maychild Ltd. increased in value to at least $5 million, adding $4 million to his minimum net worth under Roll Call’s evaluation method. In 2006, McCaul listed the real estate partnership, which owns a mix of commercial and residential properties, in the $1 million to $5 million range.

Together with his wife and family, McCaul also invests at least $12.1 million in Clear Channel Communications, the company founded by his father-in-law, Lowry Mays. The McCauls also list nearly $1 million invested in Live Nation, a Clear Channel spinoff.

12. Rep. Rodney Frelinghuysen (R-N.J.)
$22.41 million

The New Jersey lawmaker’s riches shrank almost imperceptibly in 2007, decreasing slightly more than 1 percent.
Frelinghuysen’s assets comprise more than $15 million from several family trusts invested primarily in stocks.
He lists an investment of at least $1 million in Procter & Gamble Co., and one family trust lists an additional $5 million to $25 million invested in the same company. Frelinghuysen’s holdings in Johnson & Johnson decreased in minimal value by half in 2007, dropping to $500,000 from $1 million last year.

The lawmaker’s investments also include 18 acres in Frelinghuysen Township, N.J., valued at a minimum of $250,000, and a stake in 236 acres in Stockbridge, Mass., worth at least $100,000.

13. Sen. John McCain (R-Ariz.)
$19.64 million

McCain’s true value is impossible to estimate because most of the major assets are listed in the name of his wife or children, thereby requiring far less detailed disclosure. Other news outlets have suggested that Cindy McCain’s net worth may exceed $100 million, but there is no documentation to prove that figure.

McCain’s disclosure form lists 12 items with values of “over $1 million” that are owned by his wife and children. In 2007, the family liquidated a trust set up by Cindy McCain’s late mother that had a reported value in 2006 of more than $2.5 million. The proceeds were then distributed to three other trusts, which show a minimum value of $1.4 million. Cindy McCain also liquidated a blind trust in 2007, selling millions of dollars worth of stock, and the reported value of the stock she owns through Hensley & Co. — her family’s beer distributorship — dropped more than $4 million in value last year.

The only assets McCain claims as his own are a checking account with a balance of $15,000 to $50,000, a money market fund worth less than $15,000 and several book deals.

14. Sen. Claire McCaskill (D-Mo.)
$19.42 million

McCaskill watched her net worth grow in 2007, increasing more than 24 percent over her estimated $15.66 million total in 2006. Among McCaskill’s major assets: approximately 270 limited partnerships in affordable housing real estate and a handful of “enterprise trust investment funds” held by her husband that showed a combined increase of approximately $2.7 million in value from last year.

Her spouse purchased a Kansas City, Mo., housing bond listed in the “over $1 million” category. The Senator’s husband also identified a loan of at least $1 million, the only liability listed by the couple, from Enterprise Bank.

15. Sen. Bob Corker (R-Tenn.)
$19.19 million

In 2006, Corker sold off several commercial properties, thereby eliminating more than $20 million in mortgages that had counted as liabilities against his assets. With those liabilities out of the way, Corker’s minimum net worth jumps from about $1.5 million on his 2006 report to more than $19 million on his 2007 report.

One of the liabilities remaining is attributed to Corker’s “dependent child”: a loan from the Senator valued at more than $1 million, payable at 5.05 percent interest.

In 2007, according to an explanatory note attached to his disclosure form, Corker also divested himself of hundreds of thousands of dollars worth of publicly traded stock in order to avoid any appearance of conflicts of interest. He consolidated his investments in several funds that are widely diversified and therefore do not have to report their underlying holdings. When one of the funds could not meet the Ethics Committee’s requirements for an “exempt” fund, Corker withdrew from the investment.

16. Rep. Carolyn Maloney (D-N.Y.)
$19.01 million

The New York lawmaker saw her estimated net worth increase more than 44 percent over the past year, up from $13.18 million.
The jump results from growth in her portion of a real estate development company, which moved up from the $1 million minimum category to the $5 million minimum category, effectively adding $4 million to Maloney’s bottom line.
Maloney listed a value of at least $5 million for Bosher Family, a partner of the real estate development company HPB Enterprises.

She also lists a separate $1 million entry for HPB Enterprises in Hertford, N.C. The Democrat also owns a “rental property and residence” in New York valued at $5 million to $25 million, a rental property in New Canaan, Conn., ($1 million to $5 million) and a Washington, D.C., house ($1 million to $5 million).

Maloney also has about $2 million in mortgage debts and real estate loans on those properties and an Arlington, Va., condo.


17. Rep. Nancy Pelosi (D-Calif.)
$18.71 million

The Californian’s net worth rose nearly 16 percent in 2007, adding $2.5 million to her personal wealth.
Among her assets, Pelosi lists a Norden, Calif., town house valued at $1 million to $5 million and a real estate investment in Napa, Calif., worth at least $500,000.

In addition, her husband owns a commercial property in San Francisco valued at $5 million to $25 million. In 2006, the property was listed as worth $1 million to $5 million, so that property alone added $4 million to Pelosi’s net worth last year. The couple also owns a vineyard in St. Helena, Calif., valued at $5 million to $25 million. The Speaker’s husband also increased tenfold his holdings in Apple Computer Inc. stock to at least $5 million, up from a minimum of $500,000 in 2006.

Pelosi and her husband also owe mortgage debt on several of their properties, including the vineyard, totaling at least $8.75 million. Other debts listed by Pelosi include lines of credit totaling at least $3.5 million.

Sources: http://www.rollcall.com/features/Guide-to-Congress_2008/guide/28506-1.html?type=printer_friendly

November 17, 2011--Freddie, Fannie, and Newt

During last week's Republican debate new front-runner Newt Gingrich was asked about his work with mortgage giants Freddie Mac and Fannie Mae. It was noted that after he left the speakership and Congress in disgrace he was paid $300,000 in consulting fees by them.

But since these semi-governmental agencies have been blamed by conservatives for the housing bubble and the ensuing economic collapse, reporters wanted to know what he did for them to earn that fee. Was he, in other words, a part of the problem Republicans were assigning to Fannie and Freddie? Had he played some complicitous part in ironically undermining the Republican narrative that ignores banks and other financial institutions' role and responsibility for the Great Recession? Was Newt, in other words, working for the GOP's enemy?

But as always happens when a presidential candidate moves into the lead, a close look at Newt's past became fair game. And it was soon discovered that he actually made between $1.6 million and $1.8 million in consulting fees from two contracts with Freddie Mac, according to people familiar with the arrangement.

The total amount is significantly larger than the $300,000 payment Gingrich was asked about on November 9th during the CNBC debate. And it was much more extensive than had been claimed by Gingrich--it spanned eight years, beginning just five months after he resigned from Congress.

And what Newt actually did for Freddie during those years was very different from what he nonchalantly tried to brush off last week. The former Speaker blithely said he “offered them advice about history," enigmatically, on the history of "precisely what they didn’t do” and, he attempted to get us to believe, warned the company that its lending practices were “insane.”

Former Freddie Mac executives who worked with Gingrich dispute that account.

The true history of Gingrich's substantial involvement with Fannie and Freddie was not unearthed by some left-wing blogger out to get him but comes instead from the heart of the financial establishment itself--Bloomberg News.

Two days ago they reported:

Former Freddie Mac officials familiar with the consulting work Gingrich was hired to perform for the company . . . tell a different story. They say the former House speaker was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.

If Gingrich concluded that the company’s business model was at risk and that the housing market was a “bubble,” as he said during the debate, he didn’t share those concerns with Richard Syron, Freddie Mac’s chief executive officer at the time, a person familiar with the company’s internal discussions said. [Emphasis added.]

Clearly Gingrich was more than Freddie's and Fannie's favorite historian. But this didn't stop him from hypocritically blaming the economic debacle on these mortgage agencies.

Also from Bloomberg:

Gingrich has been sharply critical of housing industry loan practices and Democrats who he said “created the environment” for the meltdown. In an Oct. 11 Republican presidential debate, Gingrich said, “You ought to start with Barney Frank,” the Massachusetts congressman who serves as the ranking Democrat on the House Financial Services Committee, when talking about people to put in jail.

“Go back and look at the lobbyists he was close to at Freddie Mac,” Gingrich said in the debate.

But Newt, of course, failed to note that he himself was one of those lobbyists.

So as to leave no ambiguity about Gingrich's role with Freddie, Bloomberg reported:

Although Freddie Mac had developed strong supporters in the Democratic caucus, the firm started a new campaign to win over allies in Republican circles. Hollis McLoughlin, a former Treasury Department chief of staff in President George H.W. Bush’s administration, was brought in [to Freddie] to head the effort.

McLoughlin hired Gingrich and several other Republicans, including former Representative Vin Weber and political message expert Frank Luntz, to assist the cause. [My emphasis.}

For decades Newt Gingrich has been all about money--his money--and deep into scams about how to make as much of it as possible. He has former wives to support, a lavish lifestyle, and a current wife with expensive taste in jewelry. It is thus no wonder that he has not been candid about his lucrative lobbying work for Fannie and Freddie. And if his role with them confuses the attempt by the GOP to blame them for all our troubles, so be it.

Gingrich's way to deal with it? Simply avoid the truth. The Republican base so much hates Mitt Romney that he may get away with it.

November 16, 2011--Tuesday, 3:14 AM, Zuccotti Park

November 15, 2011--Chile & Galveston

One country that keeps cropping up in Republican debates is Chile. Not when they are fighting about foreign affairs. Rather, Chile is mentioned when they are arguing about domestic policy. Specifically, Social Security.

What's this about?

Back in early September, at one of their first debates, when the subject turned to Social Security, Herman Cain, perhaps to show he was more than about pizza and before he unveiled his 9-9-9 plan, perhaps to show he is a man of the world, claimed that if the U.S. were to adopt the Chilean pension plan, all would be well with our system.

So what do they do in Chile that makes it so compelling to Cain and his colleagues?

Workers there who used to be required to participate in a pay-as-you-go plan (like the one we have) since 1980 (when dictator Augusto Pinochet ruled) were compelled to put all of their payroll taxes into a privately-run retirement account. That way they would benefit from compound interest. Assuming there was any.

Ah, there's one rub that doesn't come up during the GOP debates nor is it probed by the questioners--not that much interest has accrued since the privatized system was put in place. Another rub--only about 60 percent of workers are covered and the administrative costs of running the fund are unacceptably high.

So much for the claim that private companies are more cost-effective than governments.

The plan was concocted by the so-called "Chicago Boys," Chilean economists who had trained under Ayn Rand influenced Milton Friedman at the University of Chicago. (He famously described her as "an utterly intolerant and dogmatic person who did a great deal of good.")

What the Republicans are promulgating sounds like the plan George W. Bush floated prior to 2008 when the Dow was racing past 14,000 and before it crashed to just above 7,000. When that happened, he and his fellow Republicans retreated to political silence. They knew that the American public--many of whom were losing their jobs, homes, and 401(k)s--were unlikely to want to see Social Security privatized which would put that one sure thing at risk.

But now, when the GOP hopes the public has forgotten that cataclysm and who and what caused it, the Bush-Chilean plan is making a comeback. In spite of the inconvient facts derived from the Chilean experience, Romney, Gingrich, Cain, and Perry have resurrected it.

All the nomination aspirants are advocating one version or another of this plan. No matter that in Chile, and other countries where there is a private pension option, the rest of ther social safety nets are much more extensive and secure than ours. For example, Chile has a comprehensive, single-payer, national heath care system that covers everyone.

If we look at what Rick Perry has been saying about Social Security, to make sure we know he is a Real American and not influenced by any "foreign" ideas, he has been touting the Galveston Plan. Galveston, of course is in his home state of Texas.

The government there withdrew its public workers from Social Security and placed them in a locally run savings plan. Perry asserts this has been a good thing--that when teachers and policemen retire they do better than they would if they had stayed in the Social Security system, (Recall that Perry also played with the idea of having Texas secede from the Union when the U.S. economy hit the fan.)

As Herman Cain and Mitt Romney ignore the facts on the ground in Chile, Perry avoids them when it comes to Galveston. If one were to compare Social Security with the Galveston Plan, one would quickly notice that Galveston workers and their employers (Galveston taxpayers) are required to pay more into the private system than they would into the federal system. A total of 13.9 percent annually as compared with 12.4 percent.

Over time this amounts to real money. Also, and this should come as no surprise, the retirement benefits in Galveston County are considerably higher for high-income workers and substantially lower for lower-income workers than if both had participated in Social Security.

Since Galveston keeps coming up, it is little noted that it is in Ron Paul's congressional district. Paul's views of Social Security are even more Ayn Randian than Milton Friedman's. He has repeatedly said that it is unconstitutional (as are, in his view, Medicare and Medicaid) and thus people should be allowed to opt out entirely. If old folks wind up with no money to live on--or need to have an operation--if their families can't pay for them, they should be allowed to die. That view was roundly applauded by the audience at one of the early GOP debates.

And then when in 2008 Paul's Galveston was devastated by Hurricane Ike, to demonstrate his blind and brutal consistency, Congressman Paul voted to deny federal funds for the stricken city.

He argued, "Where in the Constitution does it say . . .?"

November 14, 2011--Newt Time

It is not a good that the only thing I could find to watch on TV Saturday night was the Republican candidates' foreign policy debate. It's even less of a good thing that the one who came across best was Rick Santorum. The same Rick who worried out loud that if gays are allowed to marry--men with men and women with women--that the next thing they'd want to do was marry their pets.

There he was anchoring one end of the row of candidates while Jon Huntsman occupied the other. I figured out, with Romney planted in the middle, that Rick and Jon were still hovering in single-digit land.

I thought watching the debate would at least be good for some laughs. I was sure Jon Stewart and Steve Colbert had half their staffs working Saturday night as hilarious material was sure to tumble off the screen, irresistible material for their Monday night monologues.

But it turned out to be quite a disappointment--gaff free with even the other Rick, the one from Texas, managing to remember his lines.

Santorum had the best answer to the daunting question about what to do about Pakistan--our "ally" where very bad guys, including Bin Laden, are harbored with the full support of the country's military and ISI spy agency. The same country that has at least 75 functioning nuclear weapons and the long-range missiles to deliver them. The same country that receives at least $3.0 billion in U.S. aid every year.

While the other candidates postured manfully (including Michele Bachmann who pulled herself up to her full five-feet-two) about how tough they would be--zero-base budgeting Pakistan (and all other countries who receive foreign aid) forcing those on the U.S. dole from Egypt to Pakistan to "demonstrate every year why they should get even one cent from American taxpayers."

The reporters asked each in turn to answer a totally unimpressive question--"Do you view Pakistan to be a friend or foe?" All but Santorum said "foe," with Romney, knowing the inclinations of the GOP base he is desperate to pander to, straining to come off as the most macho, most belligerent. You could almost sense his eagerness to send in Special Ops troops to capture the Pakistani nukes and, while we're at it, bomb Iran back to the Stone Age.

Santorum, though, said, "Pakistan needs to be our friend." For at least two reasons--first, because of all those nukes; second, because our aid is not primarily planeloads of hundred dollar bills (that's what we send to Afghanistan to bribe tribal leaders) but rather weapon systems that are manufactured in the U.S.A. So in effect he was conceding that a lot of American aid--most of it military equipment--is really about American jobs. He didn't put it quite this way, he too knows his audience, but isn't spending taxpayer money on the manufacture of jet fighters in California and then sending them to Islamabad a stimulus program?

But no matter, they moved on to talk about the effectiveness of the surge in Afghanistan and I noticed then that on Romney's left was Herman Cain and on his right, Newt Gingrich. I hadn't see any polls for a few days and assumed their placement was based on new data that showed Newt in either second or third place.

How could this have come about? Wasn't he standing next to Jon Huntsman just last week? And cozied up with Rick Santorum two debates ago?

While trying to concentrate on the answers about the surge, I googled the latest polling information and, yes, there was Gingrich inching past Cain.

I guess the accusations against Herman make the fact that Newt is a serial sexual harasser (though he does tend to marry those he fondles) appear of less concern to evangelicals concerned about "family issues." I also guess that Newt's conversion to Catholicism is less abhorrent to many fundamentalists because it is less of a problem than Mitt's Mormonism. At least Gingrich is a Christian.

I suppose Michele Bachmann's ignorance about American history masks the fact that self-styled historian Newt Gingrich makes up his version of history so that it fits his ideological agenda. And I guess Herman Cain's chief of staff's playing perhaps illegal hanky-panky with Koch brothers' Americans for Prosperity PAC money makes us forget the hundreds of thousands Newt owes Tiffany's for his third or fourth wife's diamonds and pearls.

Then of course, because we are aware that Romney amassed hundreds of millions in personal wealth by taking over companies and then firing hundreds and at times thousands of workers, this by comparison makes Gingrich's money-making scams seem penny ante.

So it may now be Newt time.

He's played a patient game, building a reputation among Tea Party members by attacking the media at every opportunity, while waiting for his opponents one-by-one to self destruct. Self destruct in ways that clear the moral and ethical path for an otherwise very compromised former Speaker of the House who, by the way, was forced to step down because he was sanctioned for "tax improprieties" by the the very House he was supposed to lead.

Incidentally, he was the only Speaker in history to have ever been disciplined for ethics violations. 83 of them! There's that danged history again.

November 11, 2011--Long Weekending

I will return on Monday.

November 10, 2011--Hewlett & Packard

While still in their early 20s, after graduating from Stanford, Bill Hewlett and Dave Packard established an electronics company in Packard's garage with an initial capital investment of $538. They tossed a coin to decide whether it would be called Hewlett-Packard or Packard-Hewlett. Packard won but named their enterprise the Hewlett-Packard Company.

Of the many projects they worked on, their first financially successful product was an audio oscillator, which is essential to radio, TV, and other forms of wireless transmission. Their innovation was the use of a small incandescent light bulb (known as a "pilot light") as a temperature dependent resistor in a critical portion of the circuit, the negative feedback loop, which stabilized the amplitude of the waveform output. This "simple" solution allowed them to sell their version for $54.40 when competitors were selling less stable oscillators for over $200.

One of the company's earliest customers was Walt Disney Productions, which bought eight of their oscillators (at $71.50 each) for use in the Fantasound surround sound systems installed in theaters for the movie Fantasia.

The rest of the story is well known--before long they moved out of Packard's garage, got into the PC business, then printers, and so on. In spite of their recent much-publicized troubles, HP today employs about 325,000 and is the world's largest manufacturer of PCs.

That was then but this is now.

After decades of innovation and sharp business practice, HP more recently has attempted to grow by acquiring the work and achievements of others. For example, they merged with Compaq in order to enter the computer laptop market but quickly found that they couldn't make it work and lost billions in the process. CEO Carly Fiorina, who clumsily led that takeover effort was unceremoniously fired.

Even more recently HP moved into the software business and away from its dependence on things such as printers and hyper-expensive ink. For example, under the failed leadership of Léo Apotheker, they acquired Autonomy, a business software company based in England. They paid a king's ransom for Autonomy--$11.7 billion which represented an astonishing 80 percent premium for its stock. For the uninitiated, this means HP paid 80 percent more than the value of the stock at the time of purchase. Normally, a 50 percent premium is considered to be more than sufficient.

How then did this turn out for the parent company? Not so good. Within 24 hours of the deal being consummated, HP's market value plummeted by as much as $12 billion. (See linked New York Times story.)

You might wonder where the idea came from to go after Autonomy in the first place and why HP paid so much to take it over?

Hewlett-Packard did so on the advice of others. And for that advice they also paid royally. At least $30 million. And as is customary in such acquisitions, they also agreed to pay Autonomy's advisers to the tune of at least another $38 million. That's $68 million for basically worthless advice. In fact, less than worthless advice.

Who cashed in in the advice-giving business? A familiar cast of characters--Goldman Sachs, UBS, Bank of America, Merrill Lynch, and JPMorgan Chase.

And then there was HP's $2.35 billion acquisition of 3Par, an on-line maker of storage systems. If an 80 percent premium sounds excessive, how does a 242 percent premium? The highest ever in corporate history. For the advice HP sought for this embarrassing and costly deal, HP paid JPMorgan a mere $13 million. As these things go, chump change.

What happened to CEO Apotheker who initiated these financial fiascoes? He followed Carly Fiorina out the door. But after just 11 months on the job he received a pre-hiring, non-performance-based agreed-upon "termination" payout of $23 million. Ms. Fiornia, if you are curious, after six years leading the company walked away with $20 million.

Dave Packard's garage is now a national historic monument. All future HP CEOs should be required to spend a week working in it as part of their corporate orientation.

November 9, 2011--Buddy & Pedro

Back in October 2005 I wrote here about Silo & Roy, two male penguins in Manhattan's Central Park Zoo who appeared to be in love but were being encouraged to "break up" by their keepers.

Penguins had been in the news because of a successful documentary film, March of the Penguins, which was required viewing for fundamentalists and other conservatives who saw the penguins portrayed there as evidence that our Intelligent Designer (whomever she is) created an animal kingdom in which even penguins are compassionate, monogamous, and, most important, heterosexual.

But then, inconveniently, there were Silo and Roy who appeared to offer evidence that Nature does not abhor gayness. Thus, perhaps yielding to political pressure, zoo authorities pressed Silo to take up with Scrappy, a hotty from Sea World in California.

The blogs and right wing talk shows were aflutter at this news. Radio host James C. Dobson gloated, “For those who have pointed to Roy and Silo as models for us all [emphasis added], those developments must be disappointing. Some gay activists might actually be angry.”

Well, some were and some weren’t, claiming, among other things that observing penguins in captivity was not a way to answer the question—is sexual orientation genetic or a "lifestyle" choice. Especially not in New York City, which is, well, you know.

At the time I thought there was a larger issue than just science. A humane one. Silo did OK. But Roy? Not so good. Zookeepers reported being concerned about him. After Silo was sent off to take up with Scrappy they observed Roy all alone, in a corner of the penguin house, seemingly depressed, staring at the wall.

So you would think that anyone who cares about animals as cute as penguins would not again go down that road.

Sadly, I am now hearing that officials at the Toronto Zoo are splitting up two apparently gay penguins. This time, they say, out of concern for the survival of African penguins. Zookeepers in Toronto claim they are separating the besotted gay penguins so they can be placed in a breeding program.

Staff say that Buddy and Pedro, the two penguins, are nearly inseparable and have shown signs of mating behavior. With each other.

They often mimic the way male and female penguins fool around. For instance, keepers note that every night the pair slip away to sleep together and . . . No need to go into further details.

African penguins are endangered. Therefore, in a effort to help boost their number, Buddy and Pedro, who have nearly perfect genes, are going to be split up so they can be induced to mate with female penguins.

I'm good with doing what we can to help endangered species. But still I worry about Buddy and Pedro. I want to know--are they happy?

November 8, 2011--Wall Street Earnings: Obama vs. Bush

If you have been wondering how the financial community has been doing since Barack Obama was elected president, do not be fooled by the evidence that they are shifting their campaign contributions to Republicans. They are doing fine, thank you. In fact, much better than fine.

According to Zachary Goldfarb of the Washington Post:

Wall Street firms, independent companies and the securities-trading arms of banks earned more in the first 2 1/2 years of the Obama administration than they did during the eight years of the George W. Bush administration, industry data show. . . .

The largest banks, including Bank of America, Citigroup and Wells Fargo, earned $34 billion in profit in the first half of the year, nearly matching what they earned in the same period in 2007 and more than in the same period of any other year.

Securities firms, the trading arms of big banks and hundreds of other independent firms have fared even better. They’ve generated at least $83 billion in profit during the past 2 1/2 years, compared with $77 billion during the entire Bush administration, according to data from the Securities Industry and Financial Markets Association.

If you are wondering why Barack Obama hasn't made more of an issue of this, I have no acceptable answer. Only deep disappointment.

November 7, 2011--Wall Street

November 4, 2011--Factoid: Number of Federal Workers

I am not very good at making charts, but the messy one below is revealing and puts a lie to some of the extravagant claims that Democrats are by nature big government people while Republicans, when in power, shrink the size of the federal government.

To help you read the chart, as an example, look at the Kennedy line. In 1962 the total number of civilian federal employees was 2.48 million. The U.S. Population was 186.5 million, which means that there were 13.3 employees per thousand Americans.

Working your way down the chart you will see that Nixon added to the size of the government as did George H. W. Bush, while Republicans Gerry Ford and Ronald Reagan reduced the number slightly.

Note especially that both George W. Bush and "socialist" Barack Obama had and have the smallest percentage of federal workers, 9.1 and 8.4 percent respectively. By the numbers Obama is the smallest-government president in modern history.

Also interesting is the fact that the actual number of federal employees fluctuated very little from 1962 to the present.

So, as with many issues, things are more complicated that the demagogues assert.


Federal Government Employment Levels Through the Years (including the U.S. Postal Service)

Executive Branch civilian
Employees Total U.S. population Executive Branch employees
per 1,000 population

1962 (Kennedy) 2.48 million 186.5 million 13.3
1964 (Johnson) 2.47 million 191.8 million 12.9
1970 (Nixon) 2.94 million* 205 million 14.4
1975 (Ford) 2.84 million 215.9 million 13.2
1978 (Carter) 2.87 million 222.5 million 12.9
1982 (Reagan) 2.77 million 232.1 million 11.9
1990 (Bush) 3.06 million* 249.6 million 12.3
1994 (Clinton) 2.9 million 263.1 million 11.1
2002 (Bush) 2.63 million 287.8 million 9.1
2010 (Obama) 2.65 million+ 310.3 million+ 8.4+

SOURCE: Office of Management and Budget. *= Figure includes temporary Census Bureau workers. += Estimates by OMB and U.S. Census Bureau.

November 3, 2011--Malthus

There is a controversy raging, or at least agitating population specialists.

According to United Nation's demographers, the earth's population earlier this week reached 7.0 billion. But the United States Census Bureau claims that their population clock will not hit 7.0 billion for another four months. This disagreement is because of the way the two agencies estimate the growth in the number of people who live on earth. And the margin of error.

Why these different numbers?

The two agencies begin with data from 228 countries and non-national entities and then they project birth and death rates (the former minus the latter) and attempt to calculate migration and refugee patterns. So, for example, if Mexico says its population was x million in 2010 and during 2011 y Mexicans migrated to the United States and z returned to Mexico because they can't find work or are intimidation by immigration authorities, all of this has to be included in the estimate.

Thus, if there is a worldwide margin of error of only 1 percent, considering the world's total population, this means that one or the other bottom line estimate can vary by as much as 30 million. More than the population of Saudi Arabia.

Specifically, the Census Bureau's global population clock projects that 255 people are born every minute (this adds up to 367,000 a day) while 106 die (153,000 each day) and at that rate the earth's human population grows by about 78.5 million a year, more than the entire population of England or France.

In other words, we're talking very big numbers either according the the U.N. (which sees things moving along faster) or the United States.

While the experts poke at each other by touting the strengths of their models (and the weaknesses of their rival's), as indicated, the world's population is adding the equivalent of another France or England each year. Nonetheless we have either reached a global population of 7.0 billion already or are about to. And we will add another billion, reaching 8.0 billion by either 2026 (the U.S. estimate) or 2025 (according to the U.N.). This is only 15 or 14 years from now.

What is insufficiently addressed in this back and forth about the differing estimates (see linked New York Times article as an example) are the consequences of this acceleration in population growth. Simply put, considering the globe's resources and the affects of such a huge population on the environment, this is unsustainable and ultimately disasterous.

When projections of this kind were first articulated--most famously by Thomas Malthus toward the end of the 18th century--they were largely ignored and when confronted poo-pooed.

It was blithely claimed that progress in agriculture, technology, and science would overcome all population challenges. Our resources were seen to be infinite and our ability to solve all problems was proof that there was nothing to be concerned about. If all else failed, epidemics and starvation brought about by droughts would periodically trim the population. At worst, this was Nature's way. Cruel to be sure, but efficient.

But Malthus was not convinced. In 1798, in An Essay On the Principle of Population, he wrote:

"The power of population is indefinitely greater than the power in the earth to produce subsistence for man."

More than 200 years ago he was right but ignored. And so now we are headed toward a global population of 8.0 billion. It's time to trot Malthus out again and, if we're smart, this time pay heed.

November 2, 2011--GOP Speed Dating

What is going on with the Republicans?

Mitt Romney has from the first been the candidate-in-waiting. Historically, the GOP nominates the person who came in second during the previous presidential cycle.

Reagan was the runner up to Nixon in 1968 and then won the nomination in 1980 after Nixon was elected to a second term, resigned, Ford inherited the presidency, and then haplessly lost to Jimmy Carter in 1976. H. W. Bush came in second to Reagan in 1980 (remember "Voodoo economics"?) before himself being nominated eight years later. Dole was Bush's chief challenger then, and after losing was nominated and then lost to Bill Clinton in 1996 who had defeated President Bush four years earlier.

Are you following this?

George W. Bush was the rare exception. He made a first and successful effort to win the nomination in 2000, but as a Bush he had a lifetime's experience coming in second. Then the pattern reasserted itself with McCain, who was the runner up to Bush in 2000 before being nominated in 2008 with Romney coming in second.

So according to the Republican way of doing things, this should be Romney's turn, right?

Wrong.

From all the polls it seems as if Romney can't manage to get more than 25 percent of Republicans to cozy up to him. I have speculated here that this has less to do with his flip-flopping and the resulting suspicion among the ultra-conservative base that he is a closet moderate than the fact that the evangelicals in the Grand Old Party see Mormons as non-Christian cultists.

For whatever the reasons, a parade of candidates has challenged Mitt and in turn become short-lived front runners. Even if they are certifiably ignorant about the most basic facts of American history (Michele Bachmann), certifiably self-promoting (remember The Donald); certifiably crazy (see Rick Perry's speech, twitches, and muggings at a recent New Hampshire rally--it's on YouTube); or just plain certifiable (see Herman Cain's on-going struggles to present his preposterous tax "ideas" and his bumbling defense of himself from sexual harassment charges--only Bill Clinton made more of a mess but he had more to lie about).

If poor Herman falls by the wayside, like Bachmann, Trump, and Perry look for Newt to make a move or even, help us, Rick Santorum. If they fail, as they surely will, there is always Sarah Palin to fall in love with again. Remember her?

November 1, 2011--Sticker Shock

No map was required. Without consulting our GPS, I knew where we were and where we were headed.

We needed gas and pulled off at the first exit in Connecticut. There was a Mobil station and a Citgo. Good, I thought, since there's local competition we won't get taken advantage of.

How wrong I was.

"Can you believe it," Rona said, "We've been up in Maine too long. Regular here--at both places--is $3.96 a gallon. What were we paying in Waldoboro?"

"Recently," I tried to remember, "I think about $3.48."

"Indeed. Let's drive on. It's only a couple of dollars more to fill up the tank, but I hate to feel like a victim."

And so we did. Though the snow was approaching, we tried the next two exits but it was the same story.

"It's a high tax state, Connecticut," Rona said. "We need gas but have no choice." And so we filled up.

The snow intensified and we realized we couldn't get much closer to the city than Waterbury where we felt fortunate to find a room--the last one--at a Holiday Inn. It was fine. They had a dinner buffet and we loaded up on chicken marsala and penne. Especially penne. Carbohydrate packing seemed like a good idea since we were expecting to lose power and maybe get stranded for an extra day until the roads were clear.

We hardly noticed how much it was per person. I was curious, though, and asked Rona who had paid the bill. "Don't ask," she said. "Just be happy we have a room, the power's still on, and we have enough food in our bodies to get us through at least two days."

So I didn't pursue it, but I knew it must have been well over $20 each if Rona was reluctant to tell me. Again, while we were in Maine we had become used to eating out where even a steak dinner was usually less than $20.

The next morning we still had electricity and the hotel was serving breakfast. There was well over a foot of snow on the ground and we again thought we should have a hearty breakfast to help get us through the clean up--we had to dig out our car--and the still long drive to New York.

Again there was a buffet. A very modest one with overcooked scrambled eggs, bacon, dry cereal, and some melon that tasted more like potatoes than fruit. But, again, we felt, fortunate to be warm, dry, and fed and were not about to be disappointed much less complain. We are not as yet that spoiled. We knew that many in the area were without power and would be lucky to have anything for breakfast.

This time I paid the bill and was a little shocked to see that it was $30 plus tax--$15 each. "You know how hotels are," Rona said in an attempt to keep me feeling as good as the circumstances would allow, and so I forgot about the cost and turned my attention to getting the snow off the car and us back on the road.

"Let's take a couple of yogurts with us. From the buffet. Who knows if there will be any place to get a snack. I'm sure the hotel won't mind."

"I don't know," Rona said. "I'm sure they don't want people taking food with them. It's all you can eat. Not all you can put in your pocket."

"But at $15 dollars each, I think . . ."

"Please, enough about the cost of things. We can afford whatever it costs. Be thankful for that. Think about all the people who are waking up this morning in the cold and dark. And . . ."

"You're right. I'm being silly."

"Actually, worse than silly." She was right and I headed for the parking lot and our buried car.

We got to New York without too many incidents. The had done a remarkable job clearing I-84 and all it's entrance and exit ramps. But there were still trees along the way that were so ladened with snow that some crashed onto the highway and we had at times to thread our way through. A few cars driving to fast spun out into the guard rails but no one thankfully appeared to be injured. We took our time and were fine.

Once in Manhattan there was little evidence that there had been a record-breaking snowfall, though many trees in Central Park had apparently been uprooted. But the roadways and sidewalks were clear and dry. Nothing like central Connecticut.

We unloaded and parked the car and were eager to have an early dinner.

Everything was familiar and open. "This is one good thing about Manhattan" I said. "I hate the busy streets and the crazy traffic but shop and restaurant workers are intrepid and it takes more than a little snow to shut them down."

"Listen to you. You're back for two hours and already think about what's going on as 'a little snow.' You really are spoiled."

"Including when it comes to the price of a bowl of soup?"

"What are you talking about?"

We were walking on 9th Street toward our favorite local Japanese restaurant and passed an English pub that listed it's specials on a chalkboard. "Today they have lentil soup."

Rona looked back to see what I was referring to. "I can't read it. But I'm not in the mood for lentil soup. I want some miso soup and sushi."

"Me too. But my point is how much they're charging for it." Rona picked up the pace. She had clearly had it with my concern about the cost of things. "I know you're not interested but it's $9.50. For a bowl of lentil soup!"

I of course was expecting that our usual sushi lunch would no longer be $14.95 but at least $20. I was pleasantly surprised to notice that in the five months we had been away it was now "only" $16.95. "Not bad," I said, getting used to the inflation and cost of things.

Though she knew what I meant, Rona ignored me and dipped into her soup. Which was still included in the price of the sushi.

After a wonderful lunch we thought it a good idea to go the nearby Gristedes to stock up on basics--bottled water, some fruit and cheese, and yogurt. Especially yogurt, which for both of us on most days constitutes lunch. Later in the week we would make a more extensive list so that we could do a little cooking and not be so dependent on restaurants.

"Look at this," Rona said, clearly agitated, "Can you believe it?" She was standing by the dairy chest. I was down the aisle looking for my 5-ingredient chocolate Häagen-Dazs ice cream and turned to join her. "I'm now sorry I didn't let you take the yogurt from the breakfast buffet."

"You hate when I suggest doing that sort of thing." I knew where this was headed and enjoyed playing along.

"How much was a Dannon yogurt at Hannaford's in Damariscotta?"

"The last time we bought them I think 79 cents."

"Exactly," Rona said with considerable passion. "And how much do you think they are here?"

"I recall that when we were here in May about 99 cents."

"And now? Take a look." She tugged me closer to her.

I bent toward the price sticker on the shelf and was by then not surprised to see that they cost $1.39 each.

"I rest my case," Rona said.

What case might that be I wondered.