From Kabul to Kansas McCain's Egregious Comment July 25, 2008March 11, 2017 Did you watch Obama’s speech in Berlin today? I did – along with 200,000 cheering Germans (versus 120,000 who turned out for Kennedy’s “Ich Bin Ein Berliner” and 40,000 who turned out for Reagan’s “Tear Down That Wall”). The world YEARNS for a leader like this . . . and giving the world the hope that it yearns for will be immensely good for American security, American prosperity, America’s standing in the world, and America’s pride. If the last eight years have shown anything, it’s that whom we elect President matters. Consider these two contrasting columns: OBAMA IN KABUL Obama’s Overseas Success: What’s His Secret? By M.J. Rosenberg July 23, 2008 I think I have read every word Barack Obama uttered on his visits to Israel and Palestine and I’m struck by his ability to navigate this tricky issue with such dexterity. After all, everybody is just waiting for him to trip up on the Arab-Israeli issue. Joe Lieberman, the Israeli media, the right-wing pro-Israel organizations are just waiting to pounce on some misstep. It didn’t happen, just as it didn’t happen in Afghanistan or Iraq. And here’s why. He knows his stuff. I worked on Capitol Hill for 20 years and I can tell the difference between a staff driven politician and one who knows what he’s talking about. The staff driven pol (McCain is an example) is always capable of the big blunder. He does not mix up Shiites and Sunnis because he “misspoke;” he really doesn’t know the difference. Same on the economy, he studies a memo and works to assimilate it. But there is no depth. The sad fact is that most of our politicians are like that. On the Arab-Israeli issue, all they know is that they need to sound pro-Israel. So they end up mouthing the most superficial pieties. They are afraid to talk about the Palestinians because they might say the wrong thing. They pander and pander, knowing that they won’t get into trouble by just sucking up. Not Obama. He is pro-Israel and he supports the two-state solution. He is for keeping Jerusalem undivided but supports resolving Jerusalem’s status in negotiations. He acknowledges the Iranian threat to Israel but does not endorse a military response to deal with it. So what’s Obama’s secret. He’s smart. He reads. He knows his sh*t. And that is why the Republicans who are counting on him to lose this election through some verbal blunder are going to be disappointed. I’m not saying that McCain cannot win. He can. But he’ll have to win it. Obama is not going to hand this election to him by stumbling. I just talked to a friend who saw Obama in Israel. I asked him what his friends in the Israeli media are saying. “What are they saying? They are saying that he’s the next President. And they think he’s the smartest American politician they have seen yet.” Me too. McCAIN IN KANSAS The Egregious John McCain Interview By Robert J. Elisberg John McCain made news last week for an interview with the Kansas City Star, noteworthy for an egregious comment. When asked if his Democratic opponent for president was a Socialist, Sen. McCain — apparently channeling red-baiting of the glorious 1950s — shrugged and said, “I don’t know.” Honest. If Sen. McCain is that unperceptive with a man he works with, why should anyone trust the Republican with total strangers? At least George Bush could look in people’s hearts. On the other hand, if John McCain actually knows that Barack Obama really isn’t a Socialist, well… what does that say about his renowned integrity? It’s a remarkable quote, and understandable why it got all the attention in Dave Helling’s interview. But that wasn’t the egregious comment. Because Sen. McCain continued disingenuously, “All I know is his voting record, and that’s what people usually judge their elected representatives by.” Forgetting for a moment that that’s not remotely true — since people judge their representatives by countless things, like their smile, their lapel pin, their spouse, the crude jokes they tell, whether they’d like to share a beer, and how disingenuous he is — by Mr. McCain’s logic, he might be a Communist mole. Or an escaped ax murderer. Or a mime. Because if all we know for sure about a representative is his voting record, then John McCain, too, could be anything. (While I’m aware there was some satire above, I apologize for suggesting that John McCain could be a mime.) But that wasn’t Sen. McCain’s egregious comment, either. In attempting to smear Sen. Obama with red paint, Mr. McCain commented that his opponent’s voting record “is more to the left than the announced socialist in the United States Senate, Bernie Sanders.” Blanket statements generally play havoc with the full truth — as did John McCain. In fact, checking VoteView, made up of actual political scientists, Sen. Obama is only 10th most liberal – behind, among others…Bernie Sanders. Oops. In Congressional Quarterly, an actual, official record of government, it reported Barack Obama voted with George Bush 40% of the time, putting him in the middle of Democrats. Oops. By the way, the rating John McCain likely refers to is from the National Journal, which doesn’t rank McCain himself — because he missed over half the key votes. Oops. Yet that wasn’t Sen. McCain’s egregious comment, either. Because Dave Helling asks the senator about the Minutemen, a rifle-toting posse pushing for a wall across the U.S.-Mexican border. Since the vigilantes are based in McCain’s home state of Arizona, Helling inquires if they’re a “good thing… do they help in the immigration fight, or not?” After another shrug, John McCain starts in, “I think they are citizens who are entitled to being engaged in the process. They’re obviously very concerned about immigration.” Then again, that also describes the American Nazi Party. And it doesn’t address the question. So, Dave Helling tries again, “Are they helpful?” To which the senator answers, “I think that’s for others to judge.” John McCain is running for president — and he doesn’t think it’s for him to judge what’s helpful dealing with immigration??? He’s supposed to be guiding that very judgment. Not dodging it. Besides, who are these mystical “others” who are entitled to judge, but not the would-be president? Anyway, the Senator continues his answer, “I don’t agree with them. But they certainly are exercising their legal rights as citizens.” Of course, when a 61-year-old librarian, Carol Kreck, was exercising her legal rights by carrying a “Bush=McCain” sign to one of the senator’s open meetings, his security detail had her ejected. But still, no, that too wasn’t Sen. McCain’s egregious comment. You see, near the end, John McCain starts to point out issues on which Barack Obama changed his positions. Dave Helling finally interrupts the speech, and in a soft, “Okay, okay, I know, but let’s be honest here a moment” voice, says politely: “You flip-flop a little bit, too. You flip-flop on drilling a little bit. On tax cuts….You were against the tax cuts, now you’re talking about making them permanent. Isn’t there flip-flopping on both sides? To which the engineer of the Straight Talk Express acknowledges — “Actually, no.” “No.” Period. That’s as emphatic as it gets. Never mind that seconds before, he explained changing his position on drilling! Adding, “I haven’t changed my position on any other issue.” Only to then explain – seconds after insisting there’s “No” flip-flopping on his side – that his changed position on tax cuts was because, “We had to restrain spending, that’s the main reason I voted against them.” Here’s a good linguistic tip: just because you have a reason you changed your opinions doesn’t mean you didn’t change your opinions. But “No,” there is no flip-flopping on his side. None. Honestly, there was more flip-flopping in that single answer by John McCain than most people see at the dolphin show at Seaworld. And…even that wasn’t the egregious comment. This was the egregious comment – After Sen. McCain explains his gas tax holiday suggestion, Dave Helling points out, “A lot of experts say this is not a good idea.” And this is how John McCain defends criticism of the detailed facts and specifics of his economic plan: “A lot of experts are driven to work in chauffeured limousines. A lot of experts live in Georgetown and walk to work.” Yipes. I mean…yipes. That may be. But…they’re still experts. And he’s said he’s not. Further, I’ll bet cash money that most economic experts don’t have chauffeured limousines. Name four. Most don’t live in Georgetown, but across America. Though John McCain himself is chauffeured in a limousine.* And again — they…are…experts. Even if they bicycle to work. Of course, sometimes you have to put things in perspective. After all, John McCain’s economic expert was Phil Gramm, who explained there’s only a “mental recession” in our “nation of whiners.” But now he’s been fired, so perhaps Sen. McCain is left without guidance. In the end, it might be hard to say which of these comments is the most egregious. But what’s most noteworthy is not which one — but that all these egregious comments weren’t said over the course of weeks … but in 6 minutes and 7 seconds. *In addition to being chauffeured, John McCain and his wife own nine homes and a private jet. Which is fine. Part of me desperately wishes I owned a private jet. It’s not his extravagant lifestyle I mainly object to, or even his carbon footprint. It’s the deception. Like George W. Bush, he will pretend he is just an ordinary guy – unlike his elitist opponent, the egghead who got good grades, where McCain and Bush ranked – far more affably – at the bottom of the class.
Foreign Affairs Isn’t His Strong Suit, Either (And Math is Apparently Not Mine*) July 24, 2008March 11, 2017 Everyone should be allowed to slip. McCain recently referred to current events in ‘Czechoslovakia’ (which has not been a country since 1993) . . . and also to ‘the Iraq/Pakistan border’ (Iraq and Pakistan do not share a border; a country called Iran separates them – for an amusing map, click here). But that doesn’t mean we can afford a commander in chief who repeatedly confuses whether Iran is predominantly Sunni or Shiia (it’s Shiia) or who needs Senator Lieberman to correct his repeated misstatements about whom Iran is arming (the insurgents, not Al-Qaeda) or who tells Katie Couric yesterday that Obama has it all wrong – ‘the surge’ began ‘the Anbar Awakening’ (Anbar awakened months before the surge was even announced, let alone initiated). If this seems as trivial as that ‘gotcha’ question from 1999, when a reporter asked Texas Governor Bush to name the leaders of India and Pakistan (I mean: who the hell knows stuff like that? and what possible relevance could it have to choosing the next president?), I’d urge you to read this explanation of why it actually does matter. *Tuesday I divided $9 billion by $3 trillion and told you it was ‘three-thousandths of one percent.’ As Greg Stathis kindly pointed out, it is simply ‘three-thousandths’ – or three-tenths of one percent. The point stands – even three-tenths of one percent is tiny – but mea culpa nonetheless.
Above the Clouds July 23, 2008March 11, 2017 OPTIMISM II George Hamlett: ‘You’re right, John Mauldin is upbeat. He may be right. Wonder if he’s read the latest from Evans-Pritchard of the Telegraph. He’s not upbeat.’ ☞ Sobering, for sure. One small sample: ‘[The failure of IndyMac Bank] will deplete a tenth of the $53bn reserve of the Federal Deposit Insurance Corporation. The FDIC has some 90 ‘troubled’ lenders on watch. IndyMac was not one of them.’ (And note that Mauldin isn’t optimistic in the short run – he says things are worse than they appear.) Don’t sell your RSW. BOREF Bob: ‘Sorry to be the one to inform you Andy. BOREF just lost value because Roche Bay handed over to Advanced Explorations another 20% of their future profits. They are now down to 30% from 50%. They say easy come easy go but so far no come just go :)’ ☞ Well, not exactly. According to the press release, if the deal is consummated, Roche Bay will also get $3.5 million in cash and a further 6 million AXI shares. And AXI only gets to its maximum stake in the project if it meets certain goals. And the AXI deal, as I understand it, only covers Roche Bay’s Eastern deposits. PHONETAG Michael Axelrod: ‘Nice idea but it seems a little pricey at $30 a month. I use lingo which provides universal calling anywhere in the US and Canada for a flat rate. Voice mail is then sent out as an audio file attached to an email. You can keep all your voice mails in a folder and scroll to the one you want to hear. With Lingo you can program your phone system. I have it ring my home phone and my cell phone simultaneously so now I just give out one telephone number. You can also do forwarding and many other things.’ ☞ Okay, but what I loved about phonetag – even though I’m not springing for it myself – is the way it transcribes your voicemails, and with pretty astounding accuracy, given what it has to deal with. (Not every caller speaks clearly; and it must instantly differentiate between a deep-voiced Atlantan and a nine-year-old calling from Bah Hahbuh (a town, with R’s, in Maine.) I like that phonetag would let me tie all my ridiculously-too-numerous phone numbers into a single voicemail account. But, at least so far, I’m just not persuaded it’s worth the setup time or, yes, the $360 a year. (For less than that, ‘You can help an entire community build a future free from poverty.’ But for some, this $360 could enhance productivity by more than enough to pay for itself and help two of those communities. And, of course, it is the kind of luxury that is wonderfully light on the land, requiring no materials or energy to produce, package, ship, and, one day, dispose of.) AN OVERVIEW Jim Hayes: ‘You write, ‘the earth is an island or spaceship.’ There is a movement called the ‘overview effect.’ the book has been out for a while, but a movement is growing. Maybe a consciousness-raising is in order?’ ☞ I’m glad I clicked that link. And though the movement is born of the space program (‘when you go around the Earth in an hour and a half,’ says astronaut Rusty Schweikart, ‘you begin to recognize that your identity is with that whole thing’), its Declaration ends with a quote from Socrates: ‘Humanity must rise above the earth, to the top of the atmosphere and beyond. For only then will we understand the world in which we live.’ And the sooner the better.
McCain Would Raise Your Taxes July 22, 2008March 11, 2017 Well, no, he probably wouldn’t – but at least we honestly admit that. Why must McCain take such a different tack? This is not straight talk, my friends, this is deception and fear-mongering. When he talks about ‘Czechoslovakia’ as if it were still a country, or repeatedly confuses whether Iran is predominantly Shiia or Sunni, he’s not trying to deceive. But on taxes? He knows better, my friends. He is doing just what Bush did: planning to massively favor the rich while trying to make himself out to be the champion of the average guy. Two examples: 1. From factcheck.org: McCain’s Small-Business Bunk He claims 23 million small-business owners would pay higher tax rates under Obama. He’s wrong. The vast majority would see no change, and many would get a cut. . . . 2. The beginning of a letter he just sent me: Dear Friend, I’ve taken the liberty of enclosing a McCain 2008 bumper sticker for you. I’m hoping I can count on you to display your sticker right away as part of our effort to build momentum and excitement across America. Every campaign argues that the differences are great and the stakes high. This time, they are. This election will present Americans with a clear choice between my vision for our country and that of my Democratic opponent, Barack Obama. Senator Obama talks about change. But his idea of change is to raise your taxes . . . The underlining was his, not mine. And because the letter, asking for as little as $25, was a mass mailing, my friends, the straight talk would have been to say, ‘His idea of change is to give average folks a tax cut – but to pay for it not by digging deeper into debt, but, rather, by restoring the tax rates on income above $250,000 to roughly their Clinton/Gore levels.’ The letter goes on to say, ‘Senator Obama, despite being a freshman Senator, has championed a long list of pork-barrel projects for his state – 53 special earmarks totaling $97.4 million.’ Wow. That’s a lot of money. If we assume that every one of those projects was completely worthless (e.g., why does the Red Cross need money for emergency preparedness?), it works out to $9.7 billion a year if ‘everybody did it’ (100 Senators times $97 million). So if McCain killed 100% of such spending, we’d reduce our $3 trillion in Federal spending by three-tenths of one percent! You go, Senator McCain! Way to give it to us straight! Of course, most would agree that some portion of that $97.4 million in spending was worthy. Maybe even all of it. (Here were his 2007 requests – do any of them seem like a Republican Senator’s $398 million ‘bridge to nowhere’ to you?) And others would note that Senator Obama voted for a moratorium on all earmarks. It failed by a wide margin, so Obama chose not to disadvantage the people of his state by ‘unilaterally disarming,’ as it were. But let’s not get into all that. The main point, my friends, is that Senator McCain is trying to deceive average Americans into thinking Obama will raise their taxes . . . and into thinking that cutting Federal spending by three-tenths of one-percent is bold and visionary. AND THAT’S JUST WHAT THEY’RE DOING OFFICIALLY 3. Another posting on Factcheck.org . . . A new e-mail being circulated about Obama’s tax proposals is almost entirely false. Alert readers may already have noted that this chain e-mail does not provide links to any of Obama’s actual proposals or cite any sources for the claims it makes. That is because they are made up. This widely distributed message is so full of misinformation that we find it impossible to believe that it is the result of simple ignorance or carelessness on the part of the writer. Almost nothing it says about Obama’s tax proposals is true. We conclude that this deception is deliberate. . . . ☞ We can do better than this. And, I think, come November 4, we will.
Optimism, Hope, Gore . . . and the Washington Times on McCain July 21, 2008January 4, 2017 OPTIMISM John Mauldin is optimistic. Things are worse than they appear, he makes clear in his current letter, but the world will not end . . . we will get through this . . . and longer-term we can expect astonishing technological progress to lift lots of boats. Indeed, an amazing global bootstrapping is already underway – he cites Goldman Sachs’ estimate that 70 million people will transition from poverty to the middle class every year, for decades. Each of those newly minted consumers will have the means to buy something we make or grow or create – or a share of stock we may need to sell, in our old age, to finance our retirement. I always learn lots from Mauldin’s letters, which are free. HOPE ‘I’d put my money on the sun and solar energy. What a source of power! I hope that we don’t have to wait ’til oil and coal run out before we tackle that.’ – Thomas Edison (1847-1931) ☞ And that man invented the light bulb (that should have gone off over a lot more heads these last few decades). GORE Cuddy: ‘From Al Gore’s speech … ‘And by the way, our weather sure is getting strange, isn’t it?’ No informed person would try to use only bits and pieces of this year’s weather to justify his conclusions of long term weather changes. That is just as ridiculous as making fun of the fact that last year one of Al Gore’s speeches on global warming was delivered on the day of record cold temperatures. Most of the hard science points towards the fact that the real weather anomaly has been the lack of climate change experienced in recent human history. Human activity may or may not be responsible for a part of these recent changes but our weather has been subject to fluctuations for as long as the planet has existed, which makes it likely that a natural phenomenon is the trigger. Common sense also dictates that we should do anything reasonable to solve our energy problems now rather than losing our resolve every time the price of oil drops, but I think buying carbon credits and spreading rumors of impending doom without any real science behind it is just a bunch of crap.’ ☞ Always eager for common ground, I am happy wholeheartedly to agree with the portion of your email I have bold-faced. But to focus on one admittedly folksy sentence in Gore’s hugely important call to action strikes me as unproductive. (And by the way – our weather sure IS getting strange, isn’t it? And won’t it strike you as legitimately strange, or at least noteworthy, if the Arctic does disappear a few summers from now? And is it not cause for concern that Greenland’s largest glacier is losing 20 million tons of ice a day?) There’s widespread scientific consensus (albeit not unanimity) that we 6.5 billion humans (inexorably headed to 9 billion, up from 2.5 billion when I was born) – each of them responsible for vastly more toxic pollutants than Earth’s fewer than one billion inhabitants when our young nation was born – are throwing things out of balance. And why is this is even a strange notion? How many people, doing what kinds of things, would it take to foul our nest? Jared Diamond’s Collapse details human extinctions caused – e.g., on Easter Island – by human activity. The Earth is much bigger than Easter Island. But it is an island. Call it a nest or an island – or a spaceship. We are all on it, and only the ostriches, it seems to me, would imagine we are having no impact on the ecosphere. Which is why, at this moment in time, we need sweeping, inspirational leadership for a new day. People like Al Gore and Barack Obama; not George Bush and John McCain. FROM THE WASHINGTON TIMES, NO LESS In Friday’s edition of this conservative newspaper: McCain’s Straight Talk spins wheels By Stephen Dinan Washington Times July 18, 2008 From signature issues such as immigration and climate change to tax cuts, the presumed Republican presidential nominee sometimes just seems lost as to his own record and his stance on hot-button social issues. After Mr. McCain said he opposed child adoptions to gay and lesbian couples, his campaign clarified that he wasn’t making policy and would leave the issue to the states. In the past week, the candidate was unable to say whether he thought health care plans that cover drugs to treat impotency also should cover contraceptives. Mr. McCain voted against such a proposal in 2005. For a candidate who delights in telling audiences that it’s time for ‘a little straight talk,’ he has given his opponents chances to question that reputation. The Planned Parenthood Action Fund on Wednesday announced a TV ad campaign showing Mr. McCain’s eight-second pause and his fumble for an answer to the question on coverage for birth control. ‘The problem, said Michael McKenna, a Republican strategist who works on climate change issues, is that Mr. McCain’s campaign doesn’t prepare him well and that he stakes out positions for political reasons. Twice this year, Mr. McCain has said he doesn’t support ‘mandatory’ caps on greenhouse gas emissions, even though that is the crux of his proposal to address climate change. He often uses his proposal as a chief example to differentiate himself from President Bush. Mr. McKenna said it’s impossible to have a cap-and-trade program without mandatory caps. By embracing targets rather than mandatory caps, he said, ‘it sounds like something Bush could have said.’ ‘I would be willing to bet you every dollar I’m going to make this year he could not describe the important parts of his [own] cap-and-trade proposal,’ Mr. McKenna said. ☞ As to his vaunted foreign policy experience, how do we explain his repeatedly mischaracterizing Iran as predominantly Sunni when it is predominantly Shiia? Once is an easy slip – that’s how I’d explain his forgetting Czechoslovakia no longer exists – but over and over again? How do we explain Senator Lieberman’s having to correct him when he repeatedly said Iran was arming Al-Qaeda in Iraq?
The Transformative Decade July 18, 2008March 11, 2017 I had all sorts of other things planned for today – so come back Monday – but what could possibly be as important as yesterday’s speech by Al Gore? A Generational Challenge to Repower America D.A.R. Constitution Hall Washington, D.C. Ladies and gentlemen: There are times in the history of our nation when our very way of life depends upon dispelling illusions and awakening to the challenge of a present danger. In such moments, we are called upon to move quickly and boldly to shake off complacency, throw aside old habits and rise, clear-eyed and alert, to the necessity of big changes. Those who, for whatever reason, refuse to do their part must either be persuaded to join the effort or asked to step aside. This is such a moment. The survival of the United States of America as we know it is at risk. And even more – if more should be required – the future of human civilization is at stake. I don’t remember a time in our country when so many things seemed to be going so wrong simultaneously. Our economy is in terrible shape and getting worse, gasoline prices are increasing dramatically, and so are electricity rates. Jobs are being outsourced. Home mortgages are in trouble. Banks, automobile companies and other institutions we depend upon are under growing pressure. Distinguished senior business leaders are telling us that this is just the beginning unless we find the courage to make some major changes quickly. The climate crisis, in particular, is getting a lot worse – much more quickly than predicted. Scientists with access to data from Navy submarines traversing underneath the North polar ice cap have warned that there is now a 75 percent chance that within five years the entire ice cap will completely disappear during the summer months. This will further increase the melting pressure on Greenland. According to experts, the Jakobshavn glacier, one of Greenland’s largest, is moving at a faster rate than ever before, losing 20 million tons of ice every day, equivalent to the amount of water used every year by the residents of New York City. Two major studies from military intelligence experts have warned our leaders about the dangerous national security implications of the climate crisis, including the possibility of hundreds of millions of climate refugees destabilizing nations around the world. Just two days ago, 27 senior statesmen and retired military leaders warned of the national security threat from an ‘energy tsunami’ that would be triggered by a loss of our access to foreign oil. Meanwhile, the war in Iraq continues, and now the war in Afghanistan appears to be getting worse. And by the way, our weather sure is getting strange, isn’t it? There seem to be more tornadoes than in living memory, longer droughts, bigger downpours and record floods. Unprecedented fires are burning in California and elsewhere in the American West. Higher temperatures lead to drier vegetation that makes kindling for mega-fires of the kind that have been raging in Canada, Greece, Russia, China, South America, Australia and Africa. Scientists in the Department of Geophysics and Planetary Science at Tel Aviv University tell us that for every one degree increase in temperature, lightning strikes will go up another 10 percent. And it is lightning, after all, that is principally responsible for igniting the conflagration in California today. Like a lot of people, it seems to me that all these problems are bigger than any of the solutions that have thus far been proposed for them, and that’s been worrying me. I’m convinced that one reason we’ve seemed paralyzed in the face of these crises is our tendency to offer old solutions to each crisis separately – without taking the others into account. And these outdated proposals have not only been ineffective – they almost always make the other crises even worse. Yet when we look at all three of these seemingly intractable challenges at the same time, we can see the common thread running through them, deeply ironic in its simplicity: our dangerous over-reliance on carbon-based fuels is at the core of all three of these challenges – the economic, environmental and national security crises. We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that’s got to change.
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?)