Year: 2005

POVERTY

Former Senator John Edwards: ‘The government released new poverty statistics this week. The number of Americans living in poverty rose again last year. Thirteen million children – nearly one in every five – lives in poverty.’

☞ It is a great time to be rich and powerful in America. And there’s more good stuff to come. Even now, the Republican leadership is pressing to eliminate the estate tax.

NOT SO GREAT EVEN IF YOU’RE EMPLOYED

According to new government numbers last week, median wages have dropped by $1,700 since President Bush took office. And by refusing to adjust the minimum wage for inflation, our all-Republican government has allowed it to fall to just 32% of the average hourly wage, its lowest level in 56 years. Happy Labor Day.

RECONNECTING

Air America Radio has launched a way for disconnected people to find each other. Call 866-217-6255 and . . .

• If you’ve been displaced by the storm, enter the phone number people normally call you at (even though it’s likely out of service).  Record a message.

• If you’re looking for someone, dial their regular phone number (even though it’s likely out of service) and hear the message they’ve recorded.

“Obviously, for this to work,” Air America urges, “people need to know about it, so please forward the number to as many people as you can.”

COMMENTS

Greg Palast: The National Public Radio news anchor was so excited I thought she’d piss on herself: the President of the United had flown his plane down to 1700 feet to get a better look at the flood damage! And there was a photo of him taken looking out the window. He looked very serious and concerned. That was yesterday. Today he played golf. No kidding.

Andrew Sullivan: “The good news is – and it’s hard for some to see it now – that out of this chaos is going to come a fantastic Gulf Coast, like it was before. Out of the rubbles of Trent Lott’s house — he’s lost his entire house – there’s going to be a fantastic house. And I’m looking forward to sitting on the porch.’ (Laughter).” – president George W. Bush, today. Just think of that quote for a minute; and the laughter that followed. The poor and the black are dying, dead, drowned and desperate in New Orleans and elsewhere. But the president manages to talk about the future “fantastic” porch of a rich, powerful white man who only recently resigned his position because he regretted the failure of Strom Thurmond to hold back the tide of racial desegregation.

Laura Rozen: Dutch viewer Frank Tiggelaar writes:  “There was a striking discrepancy between the CNN International report on the Bush visit to the New Orleans disaster zone, yesterday, and reports of the same event by German TV.  ZDF News reported that the president’s visit was a completely staged event.  Their crew witnessed how the open air food distribution point Bush visited in front of the cameras was torn down immediately after the president and the herd of ‘news people’ had left and that others which were allegedly being set up were abandoned at the same time. The people in the area were once again left to fend for themselves, said ZDF.” [UPDATE: THIS APPARENTLY IS FALSE. SEE SEPTEMBER 9 COLUMN FOR A LINK TO THE CORRECTION]

David Sirota: I wanted to pass on these stories about how much of the federal government’s tragic failures in the catastrophe were long ago the subject of serious concern in Congress. I remember these debates very well when I worked at the Appropriations Committee – Democrats repeatedly noted that serious budget cuts to critical Army Corps programs were coming AT THE VERY SAME TIME THE BUSH ADMINISTRATION WAS PUSHING TRILLIONS IN TAX CUTS. Former GOP Congressman/Army Corps Chief Mike Parker’s warnings in particular were very troubling back in 2002. Sadly, he was not only ignored by President Bush, but actually fired for having the guts to voice his concerns.  What we now see is very clear: there are serious, tragic and awful consequences that result from the Bush administration’s willingness to make tax cuts for the wealthy a priority over everything else – and its penchant for firing/silencing those who have the nerve to tell the truth.

Engineers’ Warnings and Pleas for Money Went Unheeded
Assistant Army Secretary Forced Out
White House Blistered Army Corps Chief In Memo Before Firing
Ex-Army Corps Officials Say Budget Cuts Imperiled Flood Mitigation Efforts
FEMA Head Forced to Resign From Last Job

CBS Meteorologist and nationally recognized hurricane expert Bryan Norcross:

Secretary Chertoff’s statement on MEET THE PRESS that he didn’t find out until Tuesday that the city was flooding – and that he was somehow guided by the newspapers that the worst had past – is absurd.  (Or, if true, frightening.)  I was on TV doing the Early Show all of Monday morning.  I reported that a  levee on the city’s east side had been breeched and some flooding was underway.  We got that information from the CBS station in New Orleans.

The 17th Street canal levee failed late Monday.  But what kind of national emergency department is  the Department of Homeland Security if the Secretary gets his information from the morning paper?  The fact is… none of the managers in DHS have emergency management experience.  They can’t visualize a disaster as emergency managers are trained to do.  James Lee Witt, the Director of FEMA in the Clinton Administration, has been speaking out about FEMA’s dismantling for some time.

☞ Few disagree FEMA was an unimpressive operation at best until the Clinton administration professionalized it.  The Republican leadership promptly abandoned that standard and has been letting it slip ever since.  You do not entrust millions of lives to a FEMA director who for nine years prior supervised a group of show-horse judges – and even had to resign under pressure from that.

But what of the city and state’s own responsibility in all this?

The lesson from hurricane Andrew in 1992, Norcross says, was clear – and known to emergency professionals:  “No local or state government can respond to a catastrophic natural disaster.  Only the military has the men, systems, and resources to descend on a city as soon as the wind stops blowing or the ground stops shaking to provide communications, security, and basic health services.  Without the military there is no command and control.  Without command and control there is only anarchy.”

Paul Sliwka (and others): “It’s amazing that the ruling party can mobilize itself for a girl named Terry but not one named Katrina.”

Bill Stosine: “If you want to know who the real incompetents are, there’s an easy way to tell.  They’ll be the ones Bush will be giving medals to over the next few months.”

Finally, an open letter to President Bush from the Times Picayune Sunday:

We heard you loud and clear Friday when you visited our devastated city and the Gulf Coast and said, “What is not working, we’re going to make it right.”

Please forgive us if we wait to see proof of your promise before believing you. But we have good reason for our skepticism.

Bienville built New Orleans where he built it for one main reason: It’s accessible. The city between the Mississippi River and Lake Pontchartrain was easy to reach in 1718.

How much easier it is to access in 2005 now that there are interstates and bridges, airports and helipads, cruise ships, barges, buses and diesel-powered trucks.

Despite the city’s multiple points of entry, our nation’s bureaucrats spent days after last week’s hurricane wringing their hands, lamenting the fact that they could neither rescue the city’s stranded victims nor bring them food, water and medical supplies.

Meanwhile there were journalists, including some who work for The Times-Picayune, going in and out of the city via the Crescent City Connection. On Thursday morning, that crew saw a caravan of 13 Wal-Mart tractor trailers headed into town to bring food, water and supplies to a dying city.

Television reporters were doing live reports from downtown New Orleans streets. Harry Connick Jr. brought in some aid Thursday, and his efforts were the focus of a “Today” show story Friday morning.

Yet, the people trained to protect our nation, the people whose job it is to quickly bring in aid were absent. Those who should have been deploying troops were singing a sad song about how our city was impossible to reach.

We’re angry, Mr. President, and we’ll be angry long after our beloved city and surrounding parishes have been pumped dry. Our people deserved rescuing. Many who could have been were not. That’s to the government’s shame.

Mayor Ray Nagin did the right thing Sunday when he allowed those with no other alternative to seek shelter from the storm inside the Louisiana Superdome. We still don’t know what the death toll is, but one thing is certain: Had the Superdome not been opened, the city’s death toll would have been higher. The toll may even have been exponentially higher.

It was clear to us by late morning Monday that many people inside the Superdome would not be returning home. It should have been clear to our government, Mr. President. So why weren’t they evacuated out of the city immediately? We learned seven years ago, when Hurricane Georges threatened, that the Dome isn’t suitable as a long-term shelter. So what did state and national officials think would happen to tens of thousands of people trapped inside with no air conditioning, overflowing toilets and dwindling amounts of food, water and other essentials?

State Rep. Karen Carter was right Friday when she said the city didn’t have but two urgent needs: “Buses! And gas!” Every official at the Federal Emergency Management Agency should be fired, Director Michael Brown especially.

In a nationally televised interview Thursday night, he said his agency hadn’t known until that day that thousands of storm victims were stranded at the Ernest N. Morial Convention Center. He gave another nationally televised interview the next morning and said, “We’ve provided food to the people at the Convention Center so that they’ve gotten at least one, if not two meals, every single day.”

Lies don’t get more bald-faced than that, Mr. President.

Yet, when you met with Mr. Brown Friday morning, you told him, “You’re doing a heck of a job.”

That’s unbelievable.

There were thousands of people at the Convention Center because the riverfront is high ground. The fact that so many people had reached there on foot is proof that rescue vehicles could have gotten there, too.

We, who are from New Orleans, are no less American than those who live on the Great Plains or along the Atlantic Seaboard. We’re no less important than those from the Pacific Northwest or Appalachia. Our people deserved to be rescued.

No expense should have been spared. No excuses should have been voiced. Especially not one as preposterous as the claim that New Orleans couldn’t be reached.

Mr. President, we sincerely hope you fulfill your promise to make our beloved communities work right once again.

When you do, we will be the first to applaud.

☞ If all this leaves you steamed, consider what happened after New Orleans was flooded in 1927.  Greg Palast’s column, snipped above, goes on to provide historical perspective that’s worth the click.  (I’m no historian.  If he’s got it all wrong, I know I can count on you to set the record straight.)

PS – The shelter link worked!  Charles and I have a young family of six coming to stay in a guest condo that goes largely unused.  They are hardly the most needy of the needy – but it’s a great feeling to be able to help, even a little.  We plan to make them Democrats by the time they leave.

OK, FALWELL GETS IT – HOW ABOUT YOUR UNCLE?

With so much going on, this was easy to miss. But, while it hardly rivals Katrina or Iraq in importance, a little good news, however relatively minor, is never a bad idea at a time like this.

Guess who now believes equal rights for gays are not special rights? The story, in key part:

“I may not agree with the lifestyle,” Falwell said. “But that has nothing to do with the civil rights of that … part of our constituency.

“Judge Roberts would probably have been not a good very good lawyer if he had not been willing, when asked by his partners in the law firm to assist in guaranteeing the civil rights of employment and housing to any and all Americans.”

When Carlson countered that conservatives, “are always arguing against ‘special rights’ for gays,” Falwell said that equal access to housing and employment are basic rights, not special rights.

“Civil rights for all Americans, black, white, red, yellow, the rich, poor, young, old, gay, straight, et cetera, is not a liberal or conservative value,” Falwell went on to say. “It’s an American value that I would think that we pretty much all agree on.”

So let’s hope, as HRC’s Joe Solmonese suggested, that the good Reverend will minister to the Republican Leadership and allow the passage of long-stalled legislation that would include sexual orientation among the bases (like religion and race and disability) on which it is illegal to discriminate.

THE CATASTROPHE

We have contingency plans to bomb virtually every country on the planet, or so one sometimes gets the feeling.  “We have contingency plans for everything,” is a line I remember hearing several times in years past.  So how about a contingency plan for what to do in the event of a likely catastrophic disaster?

You will recall this quote from yesterday:

In 2001, the Federal Emergency Management Agency ranked a major hurricane strike on New Orleans as “among the three likeliest, most catastrophic disasters facing this country,” directly behind a terrorist strike on New York City.

The Republican leadership, Bush, Cheney and Rice, were warned point blank on January 7, 2001, that Osama Bin Laden represented a “tremendous” and “immediate” threat to the United States – and did nothing.  Eight months later, a good long Crawford vacation.

Warned four years ago of the threat to New Orleans, they slashed the budgets for measures designed to lessen the threat.

Warned three or four days before Katrina’s impact that it could be imminent, the Republican administration seems to have done little to prepare for the contingency.

Meanwhile, what struck me about the President’s interview with Diane Sawyer yesterday morning was his insistence on “zero tolerance” for looters.

Has he been watching the news?  Might he at least have made a distinction between looting jewelry and looting food?  Looting water?  Looting dry clothes?  Does he think at this stage most people are looting wide screen TVs?

One pattern of Republican leadership, these past five years, has been poor planning and poor judgment.  Another pattern has been favoring the rich and powerful at all costs – tax cuts for the rich as more low-income families slip below the poverty line; tougher bankruptcy laws with no exemption for, say, hurricane victims; refusal to adjust the minimum wage for inflation; efforts to make it harder for ordinary citizens to sue corporations; zero tolerance for a mother “looting” in an attempt to keep her children alive.

Some people seem to blame the folks who didn’t evacuate, and certainly it would have been better if they had.  But how do you evacuate if you have no money?  How will you fill your gas tank at $3 a gallon?  What hotel will take you in?  Where will you go?

Ah, but it was irresponsible of them not to have money.  Perhaps. But do restaurants pay their busboys or hotels pay their maids or does Wal-Mart pay its greeters enough for a family to have adequate flood insurance, car insurance, and a rainy day fund to get out of town?  With elderly parents in tow?

Yes, the focus must be almost entirely on helping.  (As one friend sensibly asked me just now – “Why isn’t every truck in Texas being stopped, unloaded, and sent to New Orleans to rescue people?”  Or if that’s not the best plan, why wasn’t a better plan ready to go the minute disaster struck?)  But for those of us unable to do more than send money, offer shelter, and watch the news, that still leaves a lot of time to be angry.

CHEAP DENTAL CARE

Yesterday’s item on lowering your dental costs (worth reading if you missed it) prompted this additional suggestion . . .

Kirk Elliott: “Tell your readers to check if there is a dental hygiene school in their area, usually at a community college. Most have a program where you can get your teeth checked and cleaned by students, who are supervised by a dentist, for a nominal fee.  I pay $5.00 for a cleaning and they do good work.  However, they can’t do fillings or any work that would require a dentist.  Also, I have a Scottish friend living in Harlingen, Texas, who goes across the border to a Mexican dentist, paying 1/3, and he says the dentist is excellent. Plus, he buys his liquor and drugs there cheap also – it’s about an hour drive.”

☞ Should be able to get a haircut from a student barber at the same time, while you’re lying back in the chair.  Oh!  And here’s another great idea I’ve always had: an exercycle hooked up to a generator hooked up to a battery, so your peddling always keeps it charged – and so in case of a real emergency you could generate enough power to keep your laptop and cell phone running, and maybe even your TV and refrigerator (if you’re Lance Armstrong).

Dale McConnell: “One reason that UK teeth are so horrid is national health care.  By controlling price, the government has mandated a market-clearing price that limits supply so there is unsatisfied demand and thus, poor teeth.”

☞ But is that the fault of national health care – or of setting the price too low?

If we set the wages for our all-volunteer Army at $500 a year, we’d probably have a pretty lousy army.  But would its rotten condition stem from the concept of an all-volunteer army, or from the level at which we funded it?

MERCK

Peter: “About 3 years ago you indicated you had bought some Merck when it had weakened to about 40… It’s even lower now and could hit 20 or worse if they lose a lot of these VIOXX lawsuits.  Do you still hold Merck?”

The suggestions in that column – even Merck at first – did surprisingly well. (Not to scare you, but I’m always a little surprised when one of my suggestions does well.)  But VIOXX is the kind of unexpected event that brings home the truth of warnings that stocks are risky and the importance of diversifying.

I have no idea how the lawsuits will ultimately be resolved, how much of that may be covered by insurance, and what good things Merck may have in the pipeline.  I still have some Merck January 2007 calls with a big fat paper loss.  I may well sell them before year end for a big fat tax loss.

With the stock price down nearly 30% from where we started, the market may be accurately reflecting the risks and potential rewards – as the market for widely followed stocks in theory ought to do.  Or it may be overreacting with dismay and disgust and the general uncoolness of owning something out of favor, as markets often do, making it a bargain here.  Or it may be underreacting because it cannot quite accept what could befall this great company (as markets also often do), making it a sitting duck.

I have no idea which of these three possibilities is most likely, but I lean toward the first – that the market in a situation like this is a pretty good bookie, setting the odds about right.

Have a great weekend.  If you can, send money and offer shelter.

Sorry for the delay posting this. Internet problems.

1-900-GOOGLE

Doug Simpkinson: ‘The main problem I have with the business plan for 1-900-GOOGLE is that . . .I can already search Google. Infone gives you a personal concierge – I don’t know if they can look stuff up on Google for you, but it’s pretty close. Google has an SMS (text messaging) service – you can do searches for business, or even limited Google searches like ‘population of India.’ Who doesn’t have a cell phone with SMS nowadays? This has mostly replaced Infone for me, as SMS is cheaper. Remind me to sell my Infone stock. Yahoo has a similar thing.’

WHEN YOU CAN’T AFFORD A DENTIST

Jeff Bauer: ‘This article by Malcolm Gladwell in the August 29th New Yorker is yet another stunning indictment of the current health care situation in the U.S.’

☞ In small part:

The Moral-Hazard Myth
by Malcolm Gladwell

Gina, a hairdresser in Idaho, whose husband worked as a freight manager at a chain store, had a peculiar mannerism of keeping her mouth closed even when speaking. It turned out that she hadn’t been able to afford dental care for three years, and one of her front teeth was rotting. Daniel, a construction worker, pulled out his bad teeth with pliers. Then, there was Loretta, who worked nights at a university research center in Mississippi, and was missing most of her teeth. ‘They’ll break off after a while, and then you just grab a hold of them, and they work their way out,’ she explained to Sered and Fernandopulle. ‘It hurts so bad, because the tooth aches. Then it’s a relief just to get it out of there. The hole closes up itself anyway. So it’s so much better.

. . .

If your teeth are bad, you’re not going to get a job as a receptionist, say, or a cashier. You’re going to be put in the back somewhere, far from the public eye. What Loretta, Gina, and Daniel understand, the two authors tell us, is that bad teeth have come to be seen as a marker of ‘poor parenting, low educational achievement and slow or faulty intellectual development.’ They are an outward marker of caste. ‘Almost every time we asked interviewees what their first priority would be if the president established universal health coverage tomorrow,’ Sered and Fernandopulle write, ‘the immediate answer was ‘my teeth.”

YOUR HUMMER

If you don’t already get ‘The Progress Report,’ why not sample this past Thursday’s and see if you want to receive them daily. Thursday’s lead item explained how the Administration’s new fuel efficiency standards actually encourage automakers to produce bigger, more fuel inefficient vehicles – and actually forbid states to do better. (‘Buried on page 150 of the regulations is this provision: ‘A state may not impose a legal requirement relating to fuel economy, whether by statute, regulation or otherwise, that conflicts with this rule. A state law that seeks to reduce motor vehicle carbon dioxide emissions is both expressly and impliedly preempted.”)

JESUS V. STEVE FORBES

Joe Devney: ‘You asked, ‘Do you think Jesus would have favored a flat tax?’ I think the beginning of chapter 21 of the gospel of Luke makes it clear that he would not. Jesus is in the temple at Jerusalem. ‘He glanced up and saw the rich putting their offerings into the treasury, and also a poor widow putting in two copper coins. At that he said, ‘I assure you, this poor widow has put in more than all the rest.” The temple at Jerusalem may or may not be analogous to a modern government, but the point that giving should be proportional to wealth is unmistakable.

Craig Gawel: ‘Jesus drove the money changers out of the temple, He didn’t give them tax cuts. The story of Jesus is one of compassion for the poor and troubled.’

SHORTS VS PUTS

Steve Stermer: ‘What are the pros/cons of buying puts vs shorting a stock like NTMD that one expects to drop? I shorted it (so far, so good), but see that you bought puts. I know that I have more potential for loss than you do, but how do you decide which approach to take?’

☞ Great question.

Generally speaking, it’s a matter of balancing two things: the size of the premium you have to pay for the puts (if it’s wide, you are tempted to avoid it by going short) with the amount of risk you can afford to take by going short (if you have $10 million, shorting 200 shares of some stock is a trivial risk; if you have just a little money to play with, you should never, ever, ever short stocks – but might gamble on a put).

The advantage of puts: your loss is limited to what you bet. There is no worse feeling than seeing a stock, overvalued at $80, go up and up to $400 before crashing back down to what you (perhaps rightly!) thought it was worth in the first place. Yes, your judgment was vindicated, but you got wiped out first.

Another possible advantage is that with appropriate approvals from your brokerage firm, you may be able to buy puts for your retirement plan. You can never short stocks in an IRA. (Even if you get approval, puts – being really risky – generally do not belong in a retirement plan.)

A third potential advantage is that, if you buy very long-term puts – expiring in more than a year – and you do hold them more than a year and win, your profit will be lightly taxed as a long-term capital gain. That is never true of a short sale, even if you wait 20 years before taking your profit. (Long-term puts, called LEAPS, are not available for NTMD.)

A fourth advantage: your put position cannot be disrupted before expiration. It’s a contract. Whereas with a short sale, your broker may call you at any time to say that the lender of the stock you borrowed (and sold short) wants his stock back (so you have to buy it back to cover your short so he can return it). That doesn’t happen frequently, but it happens – and never at a time you would want it to.

The disadvantage of puts: you pay a premium to buy them. And you can get whipsawed, losing 100% of your bet, as the stock holds steady or drifts up for a while – only to crash days after your puts have expired worthless.

Another disadvantage: if you do make money with puts, it’s all taxed.

Yes, profits on shorts are all taxed at ordinary rates – but only when you take your gain. Some short-sellers try never to take their gains. For them, the ideal stock is shorted at $90 (say), falls to $2, and just hangs on. In that situation, they have use of the $88-per-share gain tax-free. Yes, there’s a risk the stock could go back to $90. But the more likely ‘risk’ is that the stock will become totally worthless, at which point the IRS deems a ‘taxable event’ to have occurred. Tax is then due on the entire $90 profit – which is a risk if you long ago spent the entire profit on a round-the-world cruise.

But OK. Back to the question: what to do if you think a stock is likely to head down? Buy a put? Short some shares? Every situation is different.

The most important thing to say is that most people should not ordinarily do either one. Especially selling short, which can be very difficult to manage emotionally. With shorts, you can get squeezed, hammered or bled to death. (You may even have to PAY dividends.)

Puts, though less risky, are a ‘zero sum game’ – less commissions, spreads, and taxes. Over time, it is a mathematical certainty that most people will lose money gambling with puts and calls.

Having said that, some situations – for those with money they can truly afford to lose – offer a good opportunity.

With NTMD, the December 30 puts were appealing because (for example), with the stock at $23 and the puts at $8 or so, you were paying only a modest premium over their $7 intrinsic value. (The right to sell something at $30 that you can buy for $23 is intrinsically worth $7.) You were paying a $1 premium to limit your loss to $8 a share instead of running the risk of shorting the stock at $23 only to see it shoot to $90, losing $67 a share.

(Yes, you could cover your short and take your loss long before $90 – but would you? Or would your instinct be to short MORE, because now, as it rose, it had become even more obviously overvalued? Like so many of the tech stocks in 2000 that hit $100 or $200 and have since disappeared into single digits if they even exist at all. So at 45 you do short some more and the stock doubles AGAIN, and your broker FORCES you to cover, because you have no more money in your account to secure the position.)

A put like the NTMD December 30s – selling for $8 when it was $7 ‘in the money’ – is one way to play a situation like this.

Another is to buy ‘out of the money’ puts with NO intrinsic value (the right to sell something for less than it’s worth has no intrinsic value) . . . but that, accordingly, cost much less.

Instead of paying $8 per share for a December $30 put (which is to say, $800 for one 100-share put), you might have paid $1 a share for a December $15 put – or even less for a put that had less time to run before it expired. If the stock never got below $15, and in fact went to $30, you’d lose your $1. But that’s a lot better than losing $8!

But what if the stock when to $16? The $8 you paid for a put giving you the right to sell the stock at $30 would be worth $14 (you’d buy it at $16 and sell it at $30 an instant later) . . . while the $1 you might have paid for the right to sell it at $15 would expire completely worthless. (And, knowing you, because they were just $1, you might have bought 8 of them and lost the full $800 anyway. Geez! What will I do with you?)

And, yes, you could short the stock to avoid paying a premium for the puts and then, more or less simultaneously, buy some ‘way out of the money calls’ as a way of limiting your loss, just in case. Short the stock at $23, say, but buy some calls for a relative pittance that give you the right to buy the stock at $30. So if it zooms to $90, your loss on the short position would be almost entirely balanced by the gain on your calls.

But this is what’s actually known (I think – I get confused) as ‘manufacturing a put.’ Right? It’s a short sale combined with a call, which gives you all the characteristics of a put.

And around and around.

So, no, all this is not ordinarily a good thing to dabble with.

But when you do decide it makes sense to dabble – as I thought it did with NTMD – you need to do it in away that fits your risk profile. Ordinarily, the simpler the better.

No one should short stocks who doesn’t truly know what he’s doing (which, even then, is no guarantee of success!). Buying puts is less crazy, but you should absolutely be prepared to lose every penny of your bet, because you frequently will.

I’d suggest holding onto one’s NTMD puts, even now that we have a good profit. But be prepared for spikes up in the price (like Friday’s) – and be prepared, really, to lose every penny of your bet, because (a) we could be wrong; or (b) we could be right and still lose everything if the stock doesn’t crater until after our puts expire.

GOOD IDEA FOR A BIZ?

Paul: ‘Would anyone pay for a cell phone service that connected you to a real person at a computer (Google) who could research information you need at that moment. Your answered call would start with a voice recognition capability (like directory assistance) in which you spelled key words related to your subject. From there a real person could narrow your specific need based on the search response from your key work input. I know wireless PCs are portable nowadays, but how many people could be employed from home with a little business like this?’

☞ Good idea – even if all the new employees would be in India (hey, the better they do, the better, in the long run, we all do). I’m driving along the Interstate, or trying to settle a bet at dinner, and instead of calling Marc, whom I always bother for stuff like this, I dial 1-900-GOOGLE.

THEOCRACY

Donald R.: ‘Would Jesus have blessed the IRS? Charity and welfare are profoundly different.’

☞ Yes. With charity the recipients feel like beggars. With income redistribution (progressive income tax, public education, earned income credit, Social Security, unemployment insurance and, someday, universal health insurance), the recipients feel like members of a caring community that recognizes that within limits – and with TONS of room for self-interest, incentives, and wildly different levels of wealth – we are all in this together. Do you think Jesus would have favored a flat tax? No one can know for sure, of course, but what’s your hunch?

IN 2006 IT WILL BE IMMIGRANTS

The wedge issue in 2002 was race – with the code word, ‘quotas.’ In 2004, it was gays. In 2006, it will be immigrants. A taste of what’s to come, from a piece Wednesday for Tom Paine, ‘The Rise Of The Anti-Immigrant Right,’ by Bill Berkowitz:

If Horowitz and other neoconservatives are successful, their new association with the anti-immigration forces will produce an expanding political constituency for the Republican Party­, one that focuses on progressives, liberals, and civil rights advocates as the lobby that is supposedly causing the country to lose control of its borders and be overridden by terrorists and non-citizens.

Interestingly enough, “Horowitz and other neoconservative critics of the open borders lobby do not insist that anti-immigration forces share the entire agenda of the neoconservatives ­such as Middle East policies, the War on Iraq, or support for Corporate America. Instead,” Barry said, “they see the rising anti-immigration movement as a new base constituency in their long-term strategy to bury the left and the Democratic Party.”

IRAQ

There are those who think that the Republican thinktankers who got us into Iraq should apologize.  Herewith a devastating “memo” from Jude Wanniski to “Bill Kristol & Friends.”  With passages like this one:

During the war itself, Kristol turned his attention to the shape of a post-Hussein Iraq. Characteristically, he dismissed nettlesome complexities that did not bolster his case for war, substituting a more comforting, albeit inaccurate, analysis of his own. “There’s been a certain amount of pop sociology in America … that the Shia can’t get along with the Sunni and the Shia in Iraq just want to establish some kind of Islamic fundamentalist regime. There’s almost no evidence of that at all,” he reassured NPR listeners in April 2003. “Iraq’s always been very secular.”

NTMD AND BOREF

Two gambles.  They are both reasonably priced, I think, given the very considerable risk and reward, at market caps of $80 million and $520 million – except that the market caps are backwards.  The one valued at $80 million should be $520 million, I think, and vice versa.  (If those valuations ever do reverse, there will be considerable singing around our house.)  NTMD dropped another 20 cents yesterday.

TIAA-CREF AND DWARF-TOSSING

If you have the latest edition of my investment guide, please delete the paragraph on page 269 recommending TIAA-CREF mutual funds.  It warned of possible fee hikes – and now they’ve come.  From August’s Fund Alarm:

When TIAA-CREF started its line of mutual funds back in 1997, the business opportunity was clear…..Low fees, plus historically good performance by TIAA-CREF’s private money-management arm, gave TIAA-CREF a real shot at competing with Vanguard…..But the performance never materialized, marketing was non-existent, and the funds never created even the slightest buzz….Now, we learn that TIAA-CREF was supposedly losing money on its funds ever since they started, and the obliging Trustees of these funds recently approved dramatic increases in TIAA-CREF’s management fees, in some cases by as much as 500% (the Trustees also voted to add a 0.25% 12b-1 fee)…..If shareholders don’t approve the fee increases, the Trustees have threatened to close the funds down, which raises an interesting question: Why didn’t the Trustees step in sooner, before this alleged problem became a crisis?…..In any event, fund shareholders will almost certainly agree to saddle themselves with the higher fees (what a great business this is!), and TIAA-CREF will become just another average-cost third-quartile fund provider, with a funny name…..If you own a TIAA-CREF fund, and you can sell without taking a big tax hit, we can’t think of any reason why you wouldn’t want to get out…..TIAA-CREF was going to be the next Vanguard, and it failed miserably…..Vanguard is still Vanguard, so why not just put your money there?

☞ If you have time (and own Fidelity mutual funds), you may also want to read the Fund Alarm item on dwarf-tossing that precedes this one on TIAA-CREF.

THEOCRACY

Sorry about yesterday’s link to the LA Times story. Was working. Not now. So here’s the whole thing. (We may just have to delay Interesting Salt.)

Grooming Politicians for Christ
Evangelical programs on Capitol Hill seek to mold a new generation of leaders who will answer not to voters, but to God.
By Stephanie Simon
LA Times Staff Writer

August 23, 2005

WASHINGTON – In the blue and gold elegance of the House speaker’s private dining room, Jeremy Bouma bowed his head before eight young men and women who hope to one day lead the nation. He prayed that they might find wisdom in the Bible – and govern by its word.

“Holy Father, we thank you for providing us with guidance,” said Bouma, who works for an influential televangelist. “Thank you, Lord, for these students. Build them up as your warriors and your ambassadors on Capitol Hill.”

“Amen,” the students murmured. Then they picked up their pens expectantly.

Nearly every Monday for six months, as many as a dozen congressional aides – many of them aspiring politicians – have gathered over takeout dinners to mine the Bible for ancient wisdom on modern policy debates about tax rates, foreign aid, education, cloning and the Central American Free Trade Agreement.

Through seminars taught by conservative college professors and devout members of Congress, the students learn that serving country means first and always serving Christ.

They learn to view every vote as a religious duty, and to consider compromise a sin.

That puts them at the vanguard of a bold effort by evangelical conservatives to mold a new generation of leaders who will answer not to voters, but to God.

“We help them understand God’s purpose for society,” said Bouma, who coordinates the program, known as the Statesmanship Institute, for the Rev. D. James Kennedy.

At least 3.5 million Americans tune in to Kennedy’s sermons, broadcast from Coral Ridge Presbyterian Church in Fort Lauderdale, Fla. Since 1995, the unabashedly political televangelist has also reached out to the Beltway elite with his Center for Christian Statesmanship in Washington.

The center sponsors Bible studies, prayer meetings and free “Politics and Principle” lunches for members of Congress and their staffs, often drawing crowds in the hundreds.

The Statesmanship Institute, founded two years ago, offers more in-depth training for $345.

It’s one of half a dozen evangelical leadership programs making steady inroads into Washington.

The most prominent is Patrick Henry College in Purcellville, Va., an hour’s drive from the capital. The college was founded five years ago with the goal of turning out “Christian men and women who will lead our nation with timeless biblical values.” Nearly every graduate works in government or with a conservative advocacy group.

The Witherspoon Fellowship has had similar success, placing its graduates in the White House, Congress, the State Department and legislatures nationwide. The fellowship brings 42 college students to Washington each year to study theology and politics – and to work at the conservative Family Research Council, which lobbies on such social issues as abortion and same-sex marriage.

Such programs share a commitment to developing leaders who read the Bible as a blueprint.

As Kennedy put it: “If we leave it to man to decide what’s good and evil, there will be chaos.”

“I’m sure there are people who won’t appreciate the fact that this class goes on here in the Capitol,” Myal Greene said one recent evening.

He glanced around the stately dining room, reserved for the institute by a member of Congress. (House regulations allow private groups to hold events in the Capitol as long as they are noncommercial, nonpolitical and do not discriminate based on race, creed, color or national origin.)

To Greene, there could hardly be a more appropriate location. He considers his private faith and his public duty inseparable.

Greene, the deputy press secretary for a Republican congressman from Florida, signed up for the Statesmanship Institute in part because he felt his Christian ethics were under constant assault – from lobbyists offering him free steak dinners, from friends urging him to network over beers.

The seminars proved a revelation. In one, Greene learned that ministers ran many of America’s earliest schools. He hadn’t thought much about education policy before that class. Now he plans to fight for history lessons on the Founding Fathers’ faith, science lessons drawn from the Book of Genesis and public school prayer.

“It’s one thing to have a [biblically inspired] position on one or two issues,” said Greene, 26, who was wearing a wristband printed with the slogan “Jesus Is My Homie.” “This class has you look deeper. It gives you an intellectual consistency.”

On this night, the topic was bioethics. As the students unwrapped deli sandwiches and brownies, prominent bioethicist Nigel M. deS. Cameron praised them for thinking about the “great questions of the day” through the prism of faith.

Too often, he added – to a few startled looks – “Christians are not noted for using their brains.”

In an hourlong lecture, Cameron argued that Christians must move beyond denouncing abortion to see the “moral outrage” in other common practices, such as paying Ivy League students to donate eggs in the quest for a perfect baby.

“Taking human life made in God’s image may not be as bad, from God’s point of view, as making human life in your own image,” said Cameron, a professor at Chicago-Kent College of Law. “Our humanity, warts and all, is what we have been given to steward. It’s not to be manipulated.”

When Cameron called for questions, one student tentatively raised his hand to ask about embryonic stem cell research – specifically, the use of “spare” embryos, frozen in fertility clinics. “Under current practice, they’re going to be discarded” unless they’re used for research, he said. “What do we say about that, as Christians?”

Cameron did not hold back.

“They’re going to die anyway, right?” he said, indignant. “We don’t apply the same principle to death row inmates. They’re going to die anyway, so why can’t we get some use out of them? We’d be able to do some fascinating experiments.

“The principle of manipulating human life to get experimental benefit,” Cameron said, “that is a very, very serious line to cross.”

The philosophy animating Cameron’s lecture – that federal law should be based on biblical precepts – troubles the Rev. Barry W. Lynn, executive director of Americans United for Separation of Church and State.

“This nation was founded specifically to avoid the government making religious and theological decisions,” Lynn said. “We are not to turn the Holy Scriptures of any group into public policy.”

Kennedy counters that evangelicals have every right to put up candidates who vote what they believe to be God’s will – and let voters judge them.

To which Lynn responds, with exasperation: “He says that because he knows in a majority Christian country, the Christian view is going to be expressed by more voters. They have no problem imposing their biblical worldview on every American.”

Evangelical conservatives acknowledge that’s their goal.

And they now have a systematic plan for achieving it.

Early evangelical leaders were determined social activists, championing causes such as the abolition of slavery and the prohibition of alcohol. But in the 1920s, a theological dispute split the movement. The more liberal ministers pushed for continued engagement in politics – and went on to take leading roles in the civil rights movement and Vietnam War protests.

The conservative faction called for withdrawing from politics and focusing instead on building up the church.

“Getting into politics didn’t fix anything. It just diverted them from saving souls,” said Jim Guth, a political science professor at Furman University in Greenville, S.C.

With the legalization of abortion in 1973, some fundamentalists began to argue that they had an obligation to try to arrest society’s moral decay.

“We realized we [were] having our little holy huddles but not having any influence in Washington,” said George Roller, a former public school teacher who now directs Kennedy’s Center for Christian Statesmanship.

Ministers such as Jerry Falwell and Pat Robertson jumped headlong into politics. They succeeded in helping to elect conservatives, starting with President Reagan. “But things haven’t changed very much,” said Robert D. Stacey, chairman of the government department at Patrick Henry College.

“Our candidates tick off the right policy positions, but it turns out, once they’re in office, they’re willing to compromise an awful lot – not just to bend but to break,” he said. “Now, religious conservatives are saying they want the real thing.”

To develop such steadfast politicians, evangelicals are building on decades of work by nonprofit groups such as the Leadership Institute and Young America’s Foundation, which train conservatives in grass-roots activism, effective campaigning, even how to launch a right-wing magazine.

The new evangelical initiatives reach out to the same up-and-coming leaders, but put them through courses that sound a lot like a seminary.

“If you’re clinging to conservatism just because you like conservatism, you don’t put yourself on the line for your beliefs,” Stacey said. “Your positions need to come from something deeper and more meaningful.”

That message resonates with Jessica Echard, 23, who completed the Statesmanship Institute last year.

Growing up in rural West Virginia, Echard believed passionately in her church’s teachings against abortion, but thought little about such issues as economic policy or foreign trade.

The institute gave her a framework for evaluating those topics.

Now the director of the Eagle Forum, a conservative lobbying group founded by Phyllis Schlafly, Echard says Jesus would approve of a call for lower taxes: “God calls on us to be stewards of our [own] money.”

She dips into the Bible to explain her opposition to most global treaties, reasoning that Americans have a holy obligation to protect their God-given freedom by avoiding foreign entanglements.

“The Scripture talks of taking every thought and making it captive to Christ, and that’s what the Statesmanship Institute helps us do,” Echard said.

Like other evangelical training programs, the institute avoids endorsing any party or position. Lecturers this year include a Democratic congressman and a Republican who says the Lord inspired him to buck President Bush by demanding a timetable for withdrawing from Iraq.

Homework includes readings from the Bible – but also from Nietzsche, Engels, Machiavelli and Henry Kissinger.

“We don’t tell our students what to think,” Roller said.

Yet professors also make clear that “there absolutely is an objective truth,” in the words of Paul J. Bonicelli, academic dean at Patrick Henry College.

Hannah Woody, for instance, came away from the institute’s seminars confident that abolishing the Department of Education is not just a Republican goal, but also a Christian imperative.

The Bible gives parents – not some distant bureaucracy – the primary responsibility for raising children, said Woody, 26, who hopes to one day run for governor in her home state of North Carolina. (For now, she’s working as a legislative assistant for a Republican congressman from Kansas.)

Kennedy offers a similar take on education policy in the gilt-edged, leather-bound Bible his staff delivers to each new member of Congress. In an introductory essay, Kennedy quotes Scripture to explain God’s views on taxes, capital punishment, gay rights and a dozen other issues. Most of the policy prescriptions he finds in the Bible dovetail neatly with the Republican agenda.

That focus on legislative victory disturbs some evangelical leaders, who would prefer to work on spreading Christian values throughout society.

“Too many programs start with the idea that if we [enact] right-wing, conservative policies, we’ll change America and God will be pleased,” said Ryan Messmore, who runs a leadership academy aimed at helping young Christians share their faith through the arts, the media and other professions.

But to Rep. Walter B. Jones, a North Carolina Republican, it’s clear the institute is “doing the Lord’s work.”

The nation needs more politicians who take their cues from God, not Gallup, or “our morality will crumble,” he warned. “We won’t recognize America.”

Roller shares that fear. So he ended the recent class on bioethics with a plea: “Heavenly Father, we pray you will help us to know how we should respond to these issues.”

The students answered as one: “Amen.”

☞ But what of those who believe Jesus would have favored providing every child with decent health care? Taxing the rich to help the poor? Not rushing to war except as, truly, a last resort? And – by the way – judging not lest ye be judged?

Oh! And what of those of us who believe he would not have turned a blind eye to genocide?

From the American Progress Action Fund:

Apparently you can’t even pay TV networks to cover genocide. American Progress and the Genocide Intervention Fund have created a television advertisement for BeAWitness.org, our netroots campaign that calls out the television news media for their deplorable coverage of the genocide in Darfur. In the last few days, three Washington, DC television affiliates, NBC-4, CBS-9, and ABC-7, informed us that they refuse to air the ad. For months, these networks (as well as their cable counterparts) have closed their eyes to the ultimate crime against humanity. Now they won’t allow people to purchase 30 seconds of air time urging better coverage of the genocide. Send a message to NBC, CBS and ABC demanding that the stations air the ad.

☞ It’s a powerful ad. The networks owe us better – and on so many fronts. (How could 70% of Bush voters this last time around have believed Iraq played a significant role in 9/11 if the news media had been doing its job?) An ill-informed democracy can so easily go off the rails.

FREE SLINGBOX ALTERNATIVE

Paul Haber: ‘There is actually another product just like Slingbox, but it’s FREE and needs no outside equipment, just the software you download. I haven’t tried it yet, so I don’t know if the set-up is easier, but considering the cost, it’s worth looking into. It’s called Orb.’

☞ Well, it’s free if your PC has a tuner card. If not, you can buy one for $179. But even without that, it appears there are still some things it can do. For example, play a slide show of the photos you have on your desktop PC at home on the laptop you’ve brought with you to Grandma’s:

Orb™ provides spontaneous access to a person’s music, live television, videos, photos and other digital content at any time from any device that can connect to the Internet, such as a mobile phone, PDA, or notebook, and create their own personal media portal.

Orb is based on an elegant, robust and scalable architecture and is the first of its kind to allow consumers spontaneous mobile access to all of their digital media – securely and without any restrictions. Using any Web browser, Orb provides a simple, intuitive interface to the user’s content located on their home PC.

NTMD

Closed at $18.01 last night, down another 68 cents.  Tomorrow: TIAA-CREF AND DWARF-TOSSING, as well as PUTS VERSUS SHORTS.  And maybe salt.  But I’ve already taken up too much of your time.

SLINGBOX

Thanks to Frank Schrader for forwarding this cautionary review from the Washington Post. The reviewer says Slingbox is complicated to set up, not a high quality picture, and well, why do you need it? I watched it on our guest’s laptop and thought it was fine for what it is. You may not need it, especially if you don’t travel much; but I can’t wait for mine to arrive. I hope I can figure out how to set it up.

NTMD

Closed at $18.69. UBS is still enthusiastic, with a target price of $28. In part: ‘As of 8/20, the 7-day rolling average for BiDil TRx’s [total prescriptions] is 15.9 vs. 17.3 on 8/19. The 7-day rolling average for BiDil NRx’s [new prescriptions] is 12.9 vs. 14.3 on 8/19. Assuming 180 pills per TRx and $1.80 per pill, this equates to an annual sales run-rate of $1.88 MM. BiDil was launched on 7/1.’

UBS obviously assumes sales will take off soon and discounts any possibility of widespread loss of sales t the generic alternative. But others are not so sure, including one of you, who writes . . .

Eric Batson: ‘In medical school we are taught to only use fixed combinations if the fixed combination turns out to match what we independently decide the patient needs, first using individual drugs. Of course people are lazy and combinations are often used, for many reasons, some good, some not so good.

‘Will these guys succeed at selling BiDil? Maybe. Depends on several factors. First, the patients in the tightly controlled health systems (like Kaiser) will never see the drug. Their pharmacies will only list the generic components in their formulary and the doctors will get a memo on how to prescribe the two drugs individually. On the other hand, insurers will have a hard time denying payment for an FDA approved indication of an FDA approved drug, unless the insurers are already limiting drug access through a formulary.

‘I can go on… But honestly….it all depends on how good the marketing department is. I have worked in devices/pharma/biotech for 15 years. The marketeers are the most powerful force. Just like Windows over Apple is marketing, NOT technology.’

☞ Maybe so, but I’m holding onto my puts. So far, prescriptions are being written at an underwhelming rate.

THEOCRACY

One of you writes: ‘The desire and intent and attempt to establish a theocracy could not be clearer.’ And attaches this link:

Grooming Politicians for Christ
Evangelical programs on Capitol Hill seek to mold a new generation of leaders who will answer not to voters, but to God.
By Stephanie Simon
L.A. Times Staff Writer

August 23, 2005

WASHINGTON – In the blue and gold elegance of the House speaker’s private dining room, Jeremy Bouma bowed his head before eight young men and women who hope to one day lead the nation. He prayed that they might find wisdom in the Bible – and govern by its word. . . .

REAL REMOTE CONTROL

Picture it. You are in a broadband enabled Internet café in Tibet, or in your room at a Courtyard by Marriott outside Tampa. Far from home, but watching TV on your laptop just as if you were at home. You get HBO at home? Then you get it in Tibet. You have Tivo at home? Better still. You can watch all the programs it’s stored for you, whenever you want – even if your business dinner runs long.

It’s called Slingbox, and a house guest of ours 1400 miles from his TV set at home is watching it on our dining room table as if he were at his dining room table. (Or maybe you don’t have a TV in your office and you’d like to watch CNN n a corner of your screen while you work?)

I haven’t got mine yet – I only saw this in action yesterday – but it will be delivered shortly. No monthly charges, no long ‘buffering’ delays if you have broadband . . . ‘just’ $250 or so at BestBuy, which has a fuller description. I think we just solved one of your Christmas gift problems for the man or woman who has everything.

WAR OF THE WORLDS

And you think we have problems. I almost didn’t see this movie because, well, Tom Cruise and Scientology. And I’m not going to sit here and tell you it’s as good as Batman Begins. Let’s be real, Batboysandgirls. But if you’re looking for some summer fun, see Steven Spielberg’s War of the Worlds.

INDEX FUNDS

Anthony Lawler: ‘You are a great proponent of Index Funds. How do you respond to the critics that claim the stocks in the Index Funds are artificially inflated in price because so many Index Fund managers are compelled, by their charter, to buy them?’

☞ The indexes in which they invest are so broad, this effect should be slight. For example, the S&P 500, comprised of the 500 largest companies in America, represents more than 75% of the total U.S. market cap. The Russell 3000 accounts for 98% of the whole market. This graphic gives you a good idea of how broad some of the best known indexes are.

OIL

My old pal Matt Simmons has a new book out on this topic, and you can read a very accessible, instructive interview with him here. One never knows, of course; but Matt knows more than most.