And THAT Man’s a DOCTOR! July 17, 2008January 4, 2017 Despite having by far the most expensive health care system in the world – double the per capita cost of the next closest nation – ‘The United States no longer boasts anywhere near the world’s longest life expectancy,’ reports this month’s HARVARD Magazine. ‘It doesn’t even make the top 40. In this and many other ways, the richest nation on earth is not the healthiest.’ But here’s the good news: ‘Poor health is not distributed evenly across the population, but concentrated among the disadvantaged.’ It is, as I’ve been saying for several years, a positively grand time to be rich and powerful in America – which may help to explain why the rich and powerful Republicans can be counted on so reliably to fight health care reform. Before you reach through the screen to throttle me, let me quickly acknowledge (as the HARVARD article immediately does) that, of course, ‘disparities in health tend to fall along income lines everywhere: the poor generally get sicker and die sooner than the rich.’ ‘But in the United States,’ it continues, ‘the gap between the rich and the poor is far wider than in most other developed democracies, and it is getting wider.’ Not to mention how the inefficiencies in the system sap our economic competitiveness. With that in mind, I urge you to read this prescription for reform from THE AMERICAN PROSPECT Magazine. It begins: Doctors have historically been the watchdogs of the U.S. medical system, with the American Medical Association scaring New Dealers into dropping national health coverage from the Social Security Act and then the AMA shredding Harry Truman’s reform efforts in the late 1940s. But a new poll and other significant indicators suggest that doctors are turning against the health-insurance firms that increasingly dominate American health care. The latest sign is a poll published recently in the Annals of Internal Medicine showing that 59 percent of U.S. doctors support a “single payer” plan that essentially eliminates the central role of private insurers. Most industrial societies — including nations as diverse as Taiwan, France, and Canada — have adopted universal health systems that provide health care to all citizens and permit them free choice of their doctors and hospitals. These plans are typically funded by a mix of general tax revenues and payroll taxes, and essential health-care is administered by nonprofit government agencies rather than private insurers. The new poll, conducted by Indiana University’s Center for Health Policy and Professionalism Research, shows a sharp 10 percent spike in the number of doctors supporting national insurance: 59 percent in 2007 compared to 49 percent five years earlier. . . . ☞ Do you remember the Mike Nichols / Elaine May skit where Elaine drives home a point triumphantly with the phrase, ‘And that man’s a doctor!‘ ? Well, 59% of American doctors now in effect think Michael Moore – with his documentary, Sicko, last year – was right. And how might we get change in America? IN THE FIELD WITH A DOCTOR FOR OBAMA Last month I ran an account (‘In the Field for Obama’) by my young pal and UCLA pediatrics resident Alex Blum, on leave as an Obama Organizing Fellow. His latest account – cracking a tough nut . . . and meeting Obama: One of the counties I organize for the Obama Campaign has some very interesting local politics. The woman who is the local Dem Chairperson is at war with the others in the county party hierarchy. I had been warned by the soon to be elected state Assemblyman and my field director that the Chairwoman, we’ll call her Sarah, is hyper-controlling and “all talk and no action.” Apparently in the recent past, members of the local Democratic leadership had tried unsuccessfully to take away her Chairmanship. I decided to deal with the Chairwoman head-on; I called her. Sarah immediately tested me by firing off a number of names of Dem activists in her town and asked if I had talked to them. Then she paused, “you haven’t talked to Russ, have you?” I later learned that she is also at war with Russ (who is the vice chairman). She described how decimated she had been in 2004 by Kerry’s lose and at that point needed to act. At that point she had recently retired, she was in her mid sixties, and everyday she went door to door trying to stir up interest in the local Democratic party. She clearly felt proud and without articulating the words, pointed out that she had established the local Democratic community. I got the feeling that she didn’t want me to intrude on her turf. I explained the Obama Campaign’s philosophy: we will build a lasting grassroots movement. Unlike other campaigns I’ve worked on (congressional campaigns in South Dakota, Ohio, Nevada, and California), this campaign focuses on building strong relationships with community members and working hard to empower them. This philosophy is based on the social science work of the famous organizer Marshall Ganz. He teaches organizing and leadership at Harvard’s Kennedy School of Government and emphasizes the empowerment of people in the community. We place our focus on developing our own persona narrative, our story, and this is a tool we use to form relationships with community members. After sharing our story, we ask them theirs. The other campaigns I have worked on tend to hand you talking points, a list of doors to knock on, or calls to make. Here we spend little time talking policy. If we speak openly and put ourselves at risk by telling our very personal story, it will inspire community members to open up about their lives. Our goal is to identify and befriend like minded people who have not been politically active and have them open their homes and hold house meetings so all their contacts become more involved in the Campaign. Those that attend house meetings may be inspired to hold their own house meeting and/or become involved in voter registration efforts. The concept is to build a grassroots infrastructure of empowered community members who will become part of a national structure; this network of grassroots, progressive activists will be in place and ready to move in future campaigns (either issue-oriented, which the Obama Administration plans on using, or elections). But the local Chairwoman had no interest in holding her own house meeting and didn’t seem interested to help; she told me that she would prefer to have a “supervising” role. I decided to end the conversation as soon as I could by pretending that my wife was calling on the other line. I got a call a few days later from Sarah; she told me that I was making too many calls to people in her district and that I should “just cool it, Alex.” I brushed her off with a joke and mentioned that in the previous phone call she had complained to me about how lazy the previous Democratic organizers had been. I finally met her in person at a State Senator’s fund raiser. At this event held in a park, the Senator wore cowboy boots and sang cowboy songs for the crowd as he grilled burgers from cows off his ranch. I had been at this event not 5 minutes, sitting next to Sarah, when the number 3 person in the local Democratic party walked up to the Chairwoman and said in a loud voice that she was going to hold an emergency meeting to revoke Sarah’s chairmanship. Though Sarah had been terse and obstinate, it was still difficult to see her embarrassed in front of a large crowd. Later that night, after her husband, she, and I left the fundraiser and returned to her home, she explained how she had been at war with others in the local Dem party. Basically they have personality conflicts that are years old; to me they seem stubborn and threatened by each other. I spent the night chatting with her; I explained my story, and she shared her complaints about local small town politics and how she had got involved in the Democratic party. By the end of the night she still would not agree to host a house meeting and mentioned again her desire to help “supervise” others. I told her that I was interested in approaching those in her community who had not been traditionally involved in politics (for me, this is where the growth of our movement stems from). She seemed to like the notion of me not contacting her loyalists and helping to build her party. That was last week; after multiple more phone conversations in which we discussed me trying to pull in new community members to be more politically involved, she turned from an obstacle to an ally. Last night, Sarah e-mailed all the Dems on her local e-mail list and described me as “a pediatrician who really cares about changing our country” and encouraged them to meet with me. On a slightly different note, I worked as an usher last week at a speech Obama made in Colorado Springs about community service. The speech was great. Afterwards I made my way upstairs; I will admit I may have been hoping to bump into Obama. I ran into a couple I know that are Latino leaders in Pueblo. They introduced me to Frederico Pena (former Secretary of Transportation and Energy) and we chatted for a while; I explained to them my story. I could tell that the crowd of 10 – 15 were waiting to meet Obama, because they were well dressed in suits, and kept glancing down the hall anxiously at the Secret Service. Sure enough, a few minutes later the Secret Service ushered us into a small room. The head of the Colorado Obama Campaign entered the room and started to hit people up for donations; I kept my head down. A few minutes later, in walked Obama. We were lined up in a semi crescent greeting line, and he walked down the line stopping to chat with each of us. I told him my name, how proud I was to meet him. I briefly explained my story about how I am a Pediatrician volunteering this summer with his organizing fellowship. He asked me to repeat my name and he said my name back to himself. He asked if I was enjoying the summer and I told him I’m having a ball!
Phoning for 2 Cents a Minute Instead of $3.49 July 16, 2008January 4, 2017 PHONETAG.COM This is so cool – I wish I needed it. Basically, for $30 a month, PhoneTag converts your voicemail into text and delivers it directly to your handheld and/or your email. You can still hear it as voicemail, but it sure is faster just to read through it all. And what’s so neat is the quality of the transcription – at least judging from a few samples a friend who does use it sent me. Amazing. ‘With PhoneTag,’ reads the website, ‘you can read every voicemail that comes into any of your phone numbers – from anywhere.’ PENNYTALK.COM Another friend was horrified to see a $378 phone bill for a handful of calls to China on his iPhone – at $3.49 a minute. With pennytalk.com, those calls – from the same iPhone – are now 49-cents each plus TWO CENTS a minute. (So about $4 instead of $378.) OTHER CURRENCIES Mike Woolen: ‘I am one of those rare conservative Republicans who read your column without fail. Thanks for the link to the ‘bubble’ video. I ended up watching all fifteen videos and feel like I have a better understanding of what is really going on in the country. Indeed, hard times are coming. Mr. Martenson says in one of the videos that he decided to ‘place my wealth out of the path of a potential dollar collapse.’ But he would not suggest a specific strategy to do so. I was hoping that you might.’ ☞ The first thing to say (other than that I’m really happy you come here, despite our differing views) is that part of the collapse (or perhaps most of it, we’ll someday look back and realize) is behind us. The dollar has lost more than half its value, versus the euro, since conservative Republicans swept George W. Bush into office January 20, 2001. So there could be an element of horses and barn doors in this. But I expect the dollar may have farther to fall, so the second thing to say is that I keep some of my own cash in foreign currency Exchange Traded Funds with the symbols FXA, FXC, FXE, FXF, and FXY. Will this turn out to be smart? I hope not. (In addition to foreign currency, lots of investments – including some mentioned yesterday – might be unscathed or even helped by further erosion of the dollar.) FANNIE AND FREDDIE Tom Knapp: ‘I’m an English teacher, not an economist, so of course I don’t know too much about these corporations, but I’m puzzled why FNM and FRE wouldn’t seem like good buys now – down from highs of 70 to 8 and 67 to 6 respectively and paying about 13% at that rate. All the Jim Cramers say they are ‘too big to fail,’ the government seems to agree, and some are even talking about having the U.S. buy shares. What’s not to like here? (Of course with MYCTATL…)’ ☞ I hear you, and you could be right. But the government may not be eager to bail out the shareholders, only to recapitalize the companies. One way to keep them from failing would be to put up (say) $500 billion for a new set of strong companies into which the existing companies would be merged on terms that left the current shareholders with just (say) a 1% token stake. HISTORICAL ANALOGIES Chip Ellis: ‘You write, ‘Inevitable antidote to nutty inflation is a wrenching recession (does anyone remember 1981?).’ I think that you really should be looking back a decade further. Johnson gave us guns and butter (Great Society) that combined with oil price hike led to stagflation in early 1970’s. W has given us guns and tax cuts and oil prices have again jumped – this seems pretty similar so shouldn’t we expect a similar stagflation? What investment strategies can be learned form the 1970’s?’ ☞ Quite possibly. Inflation got worse and worse, interest rates peaked at 15% in the summer of 1982, and the Dow – which had first touched 1,000 in 1966 – didn’t touch it again until 16 years later. (One investment strategy that can be learned is not to buy 30-year 4.5% Treasury bonds at the outset of what could be a long struggle with inflation.)
What About $$$ You CAN’T Afford to Lose? July 15, 2008March 11, 2017 But first . . . IT’S NOT JUST YOUR STOCKS THAT ARE LOSING VALUE So are your children. According to this, ‘the US environmental protection agency (EPA) has lowered the value of a human life by nearly $1 million under George Bush’s administration. The EPA’s estimate of the ‘value of a statistical life’ was $6.9 million as of this May – down from $7.8 million five years ago . . . ‘ In Euro terms, of course, your kids’ value has declined far more. ‘Though it may seem like a harmless bureaucratic recalculation,’ the Guardian continues, ‘the devaluation has real consequences. When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation . . .‘ In fairness, while we all would agree every human life is priceless, even $6.9 million doesn’t seem completely stingy. And by not spending it to save each of those lives, the same resources, spent differently, might save ten times as many. But shouldn’t American lives become more precious each year, or at least keep up with inflation? Not in George Bush’s America. And now . . . SO WHAT TO DO? If you’re young, it’s easy. All the suggestions from my book apply, as usual: live beneath your means, keep your transaction costs low, don’t try to time the market, stick with a lifetime habit of monthly investing as much as you can afford in two or three mutual funds of the type recommended in the Appendix. And so on. Chances are, the world will not end, and when it doesn’t – what with the power of ‘dollar-cost averaging’ and your international diversification – you’ll be the envy of all your classmates at the 40th reunion. But what if you’re not so young? And/or what if, like me, you want to control at least some of your specific investments . . . if not for the excitement (I hope not, but we’re human), then for the tax advantages (using the short-term losses to lower your taxable income and the long-term gains to fund your charitable giving)? Yesterday I amused you with a long word picture of me digging an even deeper hole for myself with a shovel called Borealis. One reason I like this situation, apart from simple perversity (that’s why I liked Russian – everyone else was taking French), is that its success or failure really have little to do with the turmoil we are seeing and are likely to see in the financial markets and the economy. Borealis has no debt, and little by way of overhead – it’s largely a ‘virtual’ company – so (unlike a real company) it can likely sail right through recession or inflation. Its technology, if any of it ever proves viable (perhaps as early as 2010, perhaps never) will be in demand as long as we’re trying to conserve fossil fuel (which we will be trying to do from now on more or less forever). And its iron ore, if it ever proves viable (each summer, they shoo away the polar bears and pile up additional proof that it may), is likely to keep pace with inflation over the long term (I figure steel will be replaced by other materials for some uses, like automobiles; but that it will still be useful in building skyscraping cities, which will become increasingly economical versus the fuel-heavy lifestyle of suburban wood homes). That said – for the love of God do NOT bet anything on this preposterous speculation that you cannot truly afford to lose . . . do NOT place a ‘market’ order for the stock if you decide to buy a little (specify a ‘limit’ price or the market maker will take every dime you’ve got and buy a villa in the South of France) . . . and underdstand that if you ever needed to sell your shares, the market is so thin that the market maker will take it as an opportunity to buy himself a wine cellar. So what isn’t a lottery ticket? Here are a few random late-night thoughts. (You deserve better, but sleepy is as sleepy does.) The only retailer I can remember suggesting here is Walmart, whose shares have done reasonably well. Walmart is the low-cost provider, a huge advantage in trying times. I would avoid most other retailers – indeed most other companies that rely on sales to the consumer. As suggested over the last few years, I wouldn’t sell my oil stocks, even though the price could well drop sharply for a while, and even though additional taxes might be levied. For the very long term, I continue to like timber (PCL is the stock’s symbol) – and, really, any company rich in resources not saddled with more debt than it can handle in the event of a deep recession. (Think about the difference between trees and houses for a minute. People say their home ‘gained in value.’ It did? It was a three-bedroom house before; is it a four-bedroom house now? Did it suddenly acquire a view? Did a terrific new public school just open in the neighborhood? If not, in exactly what sense did the house gain value, other than going up in price? Trees, by contrast, literally grow. And as they do, they gain value disproportionately, because the wood from wide trees is worth more than an equal volume of wood from saplings. This is not to say the bottom might not fall out of the timber market. But over long periods of time, timber is likely to grow faster than inflation.) If you need a market hedge, there is the aforementioned RSW, which goes up when the market goes down, and about twice as fast. (And – be warned – vice versa.) HOW TO THINK ABOUT DEBT You want to owe as little as possible, especially adjustable-rate debt (because it’s hard to see how at some point inflation will not get reflected in higher interest rates). The one big exception is a good long-term fixed rate mortgage. This is a great deal, because the lender is on the hook to you for 30 years (say), at 6%, whereas you are on the hook to the lender, typically, not at all – you can pay off the debt any time you want. So in case we had nutty inflation for a while, the $200,000 you had borrowed at 6%, which was a stretch at the time, would seem ever less daunting with each passing year. Then again, don’t be too cavalier about this, because the inevitable antidote to nutty inflation is a wrenching recession (does anyone remember 1981?), which can daunt in a different way. HOW TO THINK ABOUT OWNING DEBT I’d be careful here, too. There is the credit risk – the entity you lend to could go broke. And there is the interest rate risk. If it’s a long-term loan (as for example a 30-year Treasury bond), inflation and rising interest rates could leave you feeling foolish for accepting 5% interest when everyone else is getting 12% – and if you had to sell, you’d have to take a steep loss to get anyone to buy your 5% bonds. I’d stick with short-term Treasuries. Or, perhaps, TIPS (the Treasury Inflation Protected Securities), though these have gone up sharply since we first bought them. CASH? Cash is good. Sometimes, ‘cash is king.’ We may be approaching one of those times. (Nor, as I’ve been saying, need cash be 100% in U.S. dollars, if you have a lot of it.) REAL ESTATE Not yet, I’d guess. By and large.
Here We Go Again July 14, 2008March 11, 2017 You will be amused to know I bought a little more Borealis Friday – with money that . . . thanks to a lifetime of eating leftovers Charles would long since have trashed . . . I can truly afford to lose. I paid only a dollar a share more than I did nine years ago, when we started all this (‘A Stock That’s Surely Going to Zero’). Back then, at around $3.50 a share, the company had a total market value of barely $15 million; today, at $4.50, barely $20 million. Granted, this is a lot better stock-market performance than GM or Merrill Lynch – or even GE – have turned in over the same nine years. (What a comment that is. Maybe I should just end this column right there.) But with hindsight, it would have been smarter to wait until now to buy it (not that it will necessarily prove smart to have bought it now) . . . except that, as a practical matter, buying any appreciable number of shares (let alone a roundly ridiculous lot of shares, as I have*) would likely have driven the price a good bit higher. *In Wall Street parlance, at least back in the old days of humans with eyeshades, a ’round lot’ was 100 shares. A ’roundly ridiculous lot’ is lingo unique to my own situation with Borealis. Borealis stock – symbol BOREF – may certainly still peter out to zero someday. But consider where we are now versus nine years ago. One thing that has not changed, to be sure, are the company’s extravagant claims and lack of any actual commercial production. This is a company that still has no sales. But where once the company boasted a gigantic Canadian iron ore deposit no one had even visited in decades – and the price of iron ore was $27 a ton – today the company has a for-real mining partner that (to excerpt just a little from the latest press release) ‘has completed over 5,500 metres of sampling in 2008 that includes 706 metres from previous drilling. Hole RB-07-16 has returned a 12 metre interval averaging 45.56% Fe within a broader interval of 85 metres that averaged 29.91% Fe. The high grade intersection occurs in an area that was thought to be predominantly lower grade material (less than 26% Fe). High grade intersections such as this indicate the potential to increase the high grade zone intersected in the northern portion of C1’ – and the price of iron ore has quintupled. This mining endeavor may ultimately not work out. But I am persuaded that the people involved are actual, flesh-and-blood mining professionals excited by the prospect they are pursuing. If it does work out, the Borealis take over the next decade or two, via its subsidiary Roche Bay, could dwarf today’s market valuation. And where once the company’s Chorus Motor was just a lot of patents and projections, now it is even more patents – and a team working to retrofit all of Delta Airlines’ 737s with its Wheeltug™ motors. Quite a few serious professionals seem to have bought into the possibility that this is feasible (and that, if it is, it will be extended to most other kinds of airplanes). This, too, may ultimately not work out. But if it does . . . same deal: The rewards could be huge. And there’s more. Consider (preposterously) the latest possibility: Chorus Cars. The company believes its motors could be just the thing for series hybrid cars. (“This is the simplest hybrid configuration,” Google informs me. “In a series hybrid, the electric motor is the only means of providing power to get your wheels turning. The motor receives electric power from either the battery pack or from a generator run by a gasoline engine.”) Borealis writes: The Series Hybrid approach is dominant for diesel-electric trains, and for things like cruise liners. Series Hybrids are also advancing for earth moving equipment, and even with Oshkosh’s line of military and refuse trucks. Cars are a great fit with the Series Hybrid approach as well. Several small firms (Aptera and Spirt Avert to take two examples) are proposing and building Series Hybrid cars, promising mileage in excess of 50mpg. And of course the Chevy Volt also promises 50mpg in pure gasoline mode. How can a car get much better mileage if it still uses an old-fashioned internal combustion engine? The answer lies in the difference between the *average* power draw, and the *burst* power requirement. An internal combustion engine is sized for its *maximum* power production . . . those brief seconds of maximum acceleration. [C]armakers, aware that customers want to have a car that is fast off the mark, are wary of downsizing an engine too much, of making a car’s performance anemic. Think of the hostile reviews to very inexpensive, and underpowered cars like some of the old (and >40mpg) Honda Civics, or the Geo Metro. There is a safety angle here as well; a car that cannot accelerate rapidly enough to merge on the highway is not something most people want to drive. So engines have to be made for that “burst” requirement. But electric motors are entirely different. The limitation for electric motors, especially a Chorus machine, centers around the *continuous* requirement; the amount of power that a car would be reasonably expected to use for an ongoing basis, such as cruising on the highway. And the continuous requirement is vastly different from the burst requirement: the Chevy Volt expects a continuous requirement of 45kW, and a burst requirement of as much as 120kW. We have seen other cars where the burst requirement is as much as 4x that of the continuous requirement. Practically speaking, this means that the *average* power requirement for a typical sedan is perhaps 25-35 kW, but in order to gain market acceptance it needs to apply 150kW or more for a few seconds at a time. From a mileage perspective, it means that a *small* gasoline or diesel motor can give superb performance, as long as excess energy is stored in a battery or capacitor, to be called upon occasionally to meet burst requirements. The motor would be optimized and tuned for a limited speed and power range, which gives better efficiency (and lower emissions) than today’s automotive engines that have to operate at everything from 500 to 5000 rpm. Such a motor, sized like the 50-60hp of a Geo Metro, would easily generate 40+ mpg, yet still throw a medium or large car around with impunity. A Series Hybrid approach allows a vehicle to use an engine sized for the average power requirement. In a Series Hybrid design, that engine does not drive a heavy mechanical transmission, but instead directly produces electrical power with an attached alternator. Whenever running, the electrical output drives the electric motors and/or charges a battery and/or capacitor bank. That energy storage in turn allows for intermittent power that is 4-6x that of the continuous capability of the engine. Cars do not accelerate for very long, so 5-10 seconds of overload provides for a lot of torque, without making the engine large. In our opinion, Series Hybrid car approaches are fundamentally correct in terms of the powertrain. We believe that where it falls short is in insisting on the “plug-in” approach that requires batteries that do not exist (and if they did would not be affordable), and hundreds of pounds of extra weight that those batteries would bring with them. As GM admits, the Volt is likely to top a sticker price of $45k — and a lot of that is the battery. But the Series Hybrid approach can work, and work well. Eliminating the mechanical drivetrain has sizable benefits. So does optimizing an engine for a narrow speed and power range instead of designing an engine that needs to work well from 500 to 5000 rpm, at all kinds of power levels. And efficiency can indeed be excellent, without compromising performance. The key for a successful Series Hybrid car lies in the electric motor. State of the art electric motors are permanent magnet (also called DC Brushless) designs that are super efficient and very elegant. The problem, as Oak Ridge National Labs discovered when reverse engineering the Prius, is that these motors fail at elevated temperatures, and so cannot be relied upon to work all the time. That is why Toyota and others use “parallel” or “dual” hybrid designs that keep the mechanical drivetrain, and the mechanical linkage from the engine to the wheels. GM, like Tesla, uses AC induction motors that do not have the same thermal limitations — but they are oversized because the overload performance requires a larger, heavier, and far more expensive motor and drive electronics. Up to this point, there has been no motor technology that met both the size and heat requirements of automobiles. Which brings us to Chorus. ☞ The profusely patented Chorus Motor purports to deliver tremendous torque in a compact, lightweight design. Can it ever really meet the reliability requirements that would be required? Can it ever really be mass-produced economically? And in time not to be leapfrogged by superior technology? Who knows? The conservative assumption: “probably not.” But how do you value a long-shot? Single-product drug companies are routinely valued at $500 million – even when management can’t really explain the biological mechanism by which they believe the drug works – in the hope that years of expensive Phase I, Phase II, and Phase III trials will prove its efficacy and ultimately lead to FDA approval. One such company whose shares I’m short is currently valued at $16 billion – roughly 1,000 times the valuation of Borealis. It does have other products (reporting sales in the last year of $798 million and a loss of $397 million); but a majority of the market cap is attributable to one hoped for – but, I’m told, biologically impossible – home-run drug. The drug failed to meet its “endpoints” in the Phase II trials just concluded, but is proceeding with Phase III trials anyway. I’ve long-since given up on this kind of valuation for Borealis. (At $500 million, that would be $100 a share, which a few years ago I argued – and still believe – would be about right. If it worked out, people paying that price might make ten times their money; if it didn’t, they’d lose everything. Bets like that get made all the time.) For so consistently failing to deliver on its projections, Borealis has become the ultimate “show-me” company. Fair enough. And yet I have to think the bet – while still wildly speculative – is a lot better today, at $4.25, than it was nine years ago, at $3.50. Tomorrow (I hope): How This Fits into the Bigger Picture (and What About Money You CAN’T Afford to Lose?)
Not a Slurpee Drinker Myself, But . . . July 11, 2008January 4, 2017 MORE BUBBLES As suggested yesterday, try to find 14 minutes to watch this. SLURPEE BUBBLES You will be excited to know that participating 7-Elevens – because today is 7/11 – will be giving away 1,000 free Slurpees each. Is this a great country, or what? ASSUME THE BEST A substantial friend (if you’re 77 and support more than 30 environmental internships each year, I’d call you substantial) sent me the Maureen Dowd column that reveals the true source of Obama’s funding. ‘Is this true?’ asked my friend – and in a way that suggested he had more than half a mind to think it was. Surely I would have heard about it if it were. And yet there it was in the New York Times, so it had to be true. Except that of course it was not. As noted in the Huffington Post: A comically absurd Barack Obama smear email is making the rounds right now . . . The email, presented as a June 29 op-ed (replete with The Times’ font, layout, and Dowd byline) presents the “shocking” revelation that Obama’s prodigious Internet fundraising apparatus is really driven by wealthy financiers from — you guessed it — “Saudi Arabia, Iran, and other Middle Eastern countries.” Comically absurd – but it will be believed by an awful lot of the people who receive it. Separately, another friend – who used to give the DNC $100,000 at a pop back when that was legal – told me Monday that she couldn’t support Obama because of some terrible things she had come to believe about him . . . that just weren’t true. (And Gore never said he invented the Internet, never did anything wrong at the Buddhist temple, never inflated his and Tipper’s role in Love Story. Kerry never shot himself to get a medal. The Iraqis did not attack us on 9/11. The Jews do not bake cookies with the blood of Arab children.) I went back to the Chicago Sun-Times article my friend seemed to be referring to. It just didn’t say any of the things she had read it to say, or been told that it said. People: Assume the best of your fellow Democrats (if you are one) – it’s usually a pretty good assumption. And when you hear something like this about Obama, check out FightTheSmears.com, for starters. A lot of this junk is debunked there.
Bubbles July 10, 2008March 25, 2012 Try to find 14 minutes to watch this. Hmmm. On second thought, let me rephrase that: Watch this. And don’t be put off by the fact that it starts off with the familiar 17th Century tulip mania. I promise you, it gets more interesting. Not to say it may not be a bit too gloomy. (And let’s remember that at least some of the home price decline he talks of is already behind us.) But while no one has a crystal ball, here is a view of the Big Picture that is worth your consideration. Don’t sell your RSW.
Sally and the Surge; SYMS and a Hiss (Do NOT Miss the Hiss) July 9, 2008March 11, 2017 SALLY Sally HH: ‘I made it into your blog. How cool is that. Maybe even better than winning the daily news contest (the little wooden and brass plaque they sent reads: I WON THE DAILY NEWS CONTEST AND I AM SO HOT!) I won for the contest ‘how do you cure a cold’ and I used my great-uncle’s remedy: Put hat on bedpost. Get into bed. Drink gin until you see two hats.’ ☞ The plaque I would send if I weren’t so cheap: ‘I have the best readers in the world. How cool is THAT?’ THE SURGE Excerpts from Arianna Huffington: Surge Amnesia: The Media’s Newest Affliction John McCain, aided and abetted by his loving protectors in the media, is running a victory lap on Iraq. To hear them tell it, the surge has “worked” — indeed, it has been a huge success — and this, like a last second Hail Mary pass, has vindicated the entire disastrous Iraq misadventure. . . . [Yet] last month’s GAO report offered chapter and verse on all the ways the Iraqis have failed to reach the benchmarks that were the actual goals of the surge . . . . . . Despite the revisionist re-writes, we didn’t go to war because we were committed to demonstrating that America could unleash violence in Iraq and then, five years later, curb it through the use of reinforcements. We went to war because we were told Iraq posed a grave and imminent threat to our national security and, secondarily, as a means of fomenting democracy throughout the Middle East. Of course, the “imminent threat” turned out to be non-existent, and our presence in Iraq has strengthened the hand of every bad actor in the region: al Qaeda is safe and adding recruits, Hamas has come to power in Palestine, Hezbollah has reasserted itself in Lebanon, and Iran has become the strongest player in Iraq. Meanwhile, the reduction in casualties in Iraq is starting to be offset by increased casualties in Afghanistan — once again showing the fatal ignorance of stealing from Peter to stop-loss Paul and keep him in Iraq. So, tell me again: how is the surge working? SYMS For those who follow it, here’s a good recap leading up to tomorrow’s annual meeting. Not that anything dramatic is expected to happen – with 57% of the stock, Syms and his daughter can do almost anything they want – but the situation is still interesting. HISS A 61-year-old librarian was ticketed (her court date is July 23rd), escorted off a public plaza outside a McCain town hall meeting, and threatened with arrest for carrying a sign that read ‘McCain=Bush.’ (Hey, it’s a free country – you ought to be able to be arrested for anything, so long as it’s not hurting other people, right?) You really have to watch the two-minute video. I love what she asks at the end: ‘Why is [the sign] offensive? Why would Republicans who voted for Bush find it offensive?’ I suppose it would be gilding the lily to note that when the grotesquely unchristian Reverend Phelps holds up signs reading ‘God Hates Fags’ outside funeral services, he is not ticketed, forced to leave, or threatened with arrest. (Nor, in America, should he be.)
Cheer Up! Soon I’ll Be Able to Enlist July 8, 2008March 11, 2017 CHICKENS Chris Marcil: ‘You write: ‘And I fear there are a lot more chickens straggling roostward. (Did anyone count them when they left?)’ Well, I did, but that was before they hatched, unfortunately.’ ☞ Cute. CHEER UP Anon: ‘Your blog was terribly depressing Thursday and you sounded very depressed yourself. You must focus on the positive. Sunrises and sunsets are both free.’ ☞ I totally agree . . . and to the extent I am a bit glum from time to time, it is way less for me than in thinking how much needless harm we Americans have done ourselves. Sally: ‘Hey, Don’t Feel Bad!!! I took a little money that I could afford to lose, just as you said, and bought a little tiny bit of FMD. When it went up by 25%, I said, Hey! I’m outta here! And made a cool $400 or so. That was quite fun for a novice pipsqueak investor, thank you! I’ll spend some of it on Obama.’ ☞ You were a heck of a lot smarter than I was. SALUTE What happens when you assemble a bipartisan panel of retired brass to study ‘Don’t Ask, Don’t Tell’ 15 years after its adoption? Study: Military gays don’t undermine unit cohesion By ANNE FLAHERTY, Associated Press Writer Monday, July 7, 2008 (07-07) 14:18 PDT WASHINGTON, (AP) — Congress should repeal the “don’t ask, don’t tell” law because the presence of gays in the military is unlikely to undermine the ability to fight and win, according to a new study released by a California-based research center. The study was conducted by four retired military officers, including the three-star Air Force lieutenant general who in early 1993 was tasked with implementing President Clinton’s policy that the military stop questioning recruits on their sexual orientation. “Evidence shows that allowing gays and lesbians to serve openly is unlikely to pose any significant risk to morale, good order, discipline or cohesion,” the officers state. . . . Navy Vice Adm. Jack Shanahan said he had no opinion on the issue when he joined the panel, having never confronted it in his 35-year military career. A self-described Republican who opposes the Bush administration’s handling of the Iraq war, Shanahan said he was struck by the loss of personal integrity required by individuals to carry out “don’t ask, don’t tell.” “Everyone was living a big lie – the homosexuals were trying to hide their sexual orientation and the commanders were looking the other way because they didn’t want to disrupt operations by trying to enforce the law,” he said. ☞ The study itself is even clearer. Page 2 has ten ‘findings’ and four ‘recommendations’ that blow this issue out of the water. If you want a stronger America, you don’t want to exclude talented, committed volunteers based on their race or religion or gender – or, yes, sexual orientation.
Touring the Devastation July 7, 2008March 11, 2017 A FRIEND WRITES: ‘In this election, experience does matter. Think about YOUR experience with eight years of Bush/McCain policies. Can you afford four more?’ PRESIDENT BUSH TOURS THE DEVASTATION Click here. JOHN McCAIN – This, from the Seattle Post-Intelligencer. It’s not new, but I just saw it: . . . Right up to his twenties, he remained a strikingly violent man, “ready to fight at the drop of a hat,” according to his biographer Robert Timberg. This rage seems to be at the core of his personality: describing his own childhood, McCain has written: “At the smallest provocation I would go off into a mad frenzy, and then suddenly crash to the floor unconscious. When I got angry I held my breath until I blacked out.” But he claims he was transformed by his experiences in Vietnam – a war he still defends as “noble” and “winnable,” if only it had been fought harder. (More than three million Vietnamese died; how much harder could it be?) His plane was shot down on a bombing raid over Hanoi, and he was captured and tortured for five years. To this day, he cannot lift his arms high enough to comb his own hair. On his release, he used second his wife’s fortune to run to as a Republican senator. He was a standard-issue Reaganite corporate Republican – until the Keating Five corruption scandal consumed him. In 1987, it was revealed that McCain, along with four other senators, had taken huge campaign donations from a fraudster called Charles Keating. In return they pressured government regulators not to look too hard into Keating’s affairs, allowing him to commit even more fraud. McCain later admitted: “I did it for no other reason than I valued [Keating’s] support.” McCain took the only course that could possibly preserve his reputation: He turned the scandal into a debate about the political system, rather than his own personal corruption. He said it showed how “we need to drive the special interests out of Washington,” and became a high-profile campaigner for campaign finance reform. But privately, his behavior hasn’t changed much. For example, in 2000 he lobbied federal regulators hard on behalf of a major campaign contributor, Paxson Communications, in an act the regulators spluttered was “highly unusual.” He has never won an election without outspending his opponent. But McCain has distinguished himself most as an über-hawk on foreign policy. To give a brief smorgasbord of his views: at a recent rally, he sang “Bomb, bomb, bomb, bomb Iran,” to the tune of the Beach Boys’ “Barbara Ann.” He says North Korea should be threatened with “extinction.” McCain has mostly opposed using U.S. power for humanitarian goals, jeering at proposals to intervene in Rwanda or Bosnia — but he is very keen to use it for great power imperialism. He learned this philosophy from his father and his granddad Slew, who fought in the Philippine wars at the turn of the 20th century, where he was part of a mission to crush the local resistance to the U.S. invasion. They did it by forcing the entire population from their homes at gunpoint into “protection zones,” and gunning down anybody over the age of 10 who was found outside them. Today, McCain dreamily describes this as “an exotic adventure” which his grandfather “generally enjoyed.” Then McCain’s father, John, led the U.S. invasion of the Dominican Republic in 1965, at a time when there was a conflict on the Caribbean island. On one side, there were forces loyal to Juan Bosch, the democratically elected left-wing president who was committed to land redistribution and helping the poor. On the other side, there were forces who had overthrown the elected government and looked nostalgically to the playboy tyranny of Rafael Trujillo. John McCain Sr. intervened to ensure the supporters of the democratic government were crushed, bragging that it taught the natives “how to behave themselves.” He saw this as part of a wider mission, where the U.S. would take over Britain’s role as a “world empire.” These beliefs drive McCain today. He brags he would be happy for U.S. troops to remain in Iraq for 100 years, and declares: “I’m not at all embarrassed of my friendship with Henry Kissinger; I’m proud of it.” His most thorough biographer — and recent supporter — Matt Welch concludes: “McCain’s program for fighting foreign wars would be the most openly militaristic and interventionist platform in the White House since Teddy Roosevelt…[it] is considerably more hawkish than anything George Bush has ever practiced.” With him as president, we could expect much more aggressive destabilization of Venezuela and Bolivia — and more. So why do so many nice liberals have a weak spot for McCain? Well, to his credit, he doesn’t hate immigrants: He proposed a program to legalize the 12 million undocumented workers in the U.S. He sincerely opposes torture, as a survivor of it himself. He has apologized for denying global warming and now advocates a cap on greenhouse gas emissions but only if China and India can also be locked into the system. He is somewhat uncomfortable with the religious right (while supporting a ban on abortion and gay marriage). It is a sign of how far to the right the Republican Party has drifted that these are considered signs of liberalism, rather than basic humanity. Yet these sprinklings of sanity — onto a very extreme program — are enough for a superficial, glib press to present McCain as “bipartisan” and “centrist.” Will this be enough to put white hair into the White House? At the moment, he has considerably higher positive ratings than Clinton, and beats her in some match-up polls. If we don’t start warning that the Real McCain is not the Real McCoy, we might sleepwalk into four more years of Republicanism. SYMS This, from the New York Observer. Don’t sell.
Clay July 3, 2008March 11, 2017 I sent my piece to 12 magazines simultaneously (I was 23; I didn’t know you weren’t supposed to do that) and got rejected by them all. Weeks later, New York Magazine called – I had forgotten about that one – I must have sent it to 13 – and had me fly down from Cambridge to have my picture taken for the cover. And that, in the fall of 1970, is how I met Clay Felker. He was old (to a 23-year-old, 45 is old), but erupting – always – with energy and enthusiasm and urgency. He was a spectacular advocate for his writers, always putting them front and center and reveling in their success. And, for whatever reason, he had decided to make me one of them. My piece was about a company I’d worked for called National Student Marketing. Its stock went from 6 to 140 in 18 months – DLJ bought some, Harvard’s Endowment Fund bought some – but the ‘creative accounting’ the company had been practicing, it turned out, could really only be fairly termed ‘fraudulent accounting.’ The CEO went to jail – as did a guy from Peat Marwick, the auditor – and I went off to business school. One thing led to another, and MBA in hand, I found myself in the employ of Clay Felker. Here are the things I remember best about Clay: He was passionate about everything, but especially people and power. He would meet someone at a cocktail party – real estate developer Sam Lefrak or music mogul Ahmet Ertegun or British financier Sir James Goldsmith – and the next day he would have me calling to profile them for New York. (‘It’s not hard to make fun of a billion-dollar builder who can’t pronounce the word ‘condominium,” the Lefrak piece began, ‘ – he pronounces it ‘condominimum.’ But Samuel J. Lefrak . . .’) He was irreverent – the more outrageous, at least within the limits of an upstanding Missouri native, the better. He had me write a piece about OPEC – should we just go into the Middle East and TAKE the now outrageously-priced $12-a-barrel oil? The thrust of the piece was, ‘no,’ but it landed me on an assassination list anyway, because he had illustrated the cover Action Comic style, with Ford and Kissinger storming the desert with machine guns. He knew how to sell magazines. He let me do a piece on solar energy, circa 1974, and I was amazed to find that he not only had made room for it — he had made it the cover. The cover? Well, it was February, so used a shot of a gorgeous model on a pool float, all but topless, soaking in the rays. He allowed his writers tremendous latitude. He once let me do a piece called, ‘How Tall Is Robert Redford Really?’ – the Times had said he was 6’2′, others had told me he was 5’7′, and I just thought this was one question, in a complex subjective world, we ought to be able to answer definitely. (‘About five-nine.’) And the next week he would let me do a piece about ‘Bank Capital Adequacy.’ He supported writers every way he could. He helped Gloria Steinem launch Ms. He helped Judy Daniels launch Savvy. He helped Steve Brill launch American Lawyer. He ran the Aaron Latham piece that became John Travolta’s ‘Urban Cowboy.’ He persuaded George J. W. Goodman to adopt the penname ‘Adam Smith,’ which led to the #1 best-seller, The Money Game, and the long-running, award-winning ‘Adam Smith’s Money World’ on PBS. He was not great with money. Personally, he was always asking me (and others, let’s hope) for financial advice. Professionally, how could he stint on the editorial package? The stories and graphics and writing meant far more to him than profits. And so it was he once met a terrific young Australian publishing tycoon – ‘you’ve got to go meet this guy,’ he told me, sending me over to visit Rupert Murdoch – who soon joined the New York Magazine board and then, to Clay’s consternation, grabbed it out from under him. But in even the few years he had it, Clay made an enormous impact, not least on us, his writers. I can’t imagine how different, and less interesting, and less blessed, my life would have been if he hadn’t. Clay died Tuesday morning, at 82, in the loving care of another of his writers, his wife, Gail Sheehy. ‘A visionary editor who was widely credited with inventing the formula for the modern magazine,’ the Times obit begins. A great talent – and, not incidentally on this July 4th eve, a great American – is gone.