It’s Not That They Don’t Care And a Few Thoughts on Your Money October 6, 2008March 12, 2017 JOHN McCAIN AT HIS BEST This clip is only 38 seconds long, so suffer the first half (the McCain campaign goes negative this week) . . . because the second half is John McCain at his best.* *That John McCain deplored the despicable negative campaign Bush ran to beat him in South Carolina in 2000. This John McCain has hired the same firm to try to beat Obama. HIS CHARITABLE GIVING – I According to the Chronicle of Philanthropy, last year the McCains gave $211,000 to the John and Cindy McCain Family Foundation (the vehicle through which they do their charitable giving). Although it’s impossible to know for sure, it’s a pretty fair guess that they’ve spent substantially more operating their private jet each year than they’ve contributed to charity. That’s totally their choice. But it speaks to their priorities. The John and Cindy McCain Family Foundation gave out $78,000 last year and $188,000 in 2006 – $93,000 of it to the private prep school his sons attended and the private prep school his daughter attends. These are huge amounts to give to charity (or to prep schools) if your household income is a few hundred thousand dollars . . . but theirs tops $6 million. We should honor their wealth (this is America). And it is absolutely theirs to with as they please. But that is the point. You can learn a lot about a family’s priorities from how it spends its money. HIS CHARITABLE GIVING – II Ah, some will say, but it’s not his money. Fair enough. But while it is fine to imagine that the Senator would be more charitable if it were his money, what does it say about his ability to lead others that he has not been able to inspire his wife, whose net worth is estimated at $100 million, to do more? Has he no say over the number of houses they have, how many cars they have, how much he spends on a pair of shoes? Are there no pressing world problems the McCain’s have been exposed to that so alarm or concern them or tug at their heartstrings that they would like to use more that $78,000 of their $100 million wealth to address them? The Bible calls many to tithe – but those are ordinary people, who might even have to sacrifice to do it. I’m not sure what the Bible says about people with 13-bedroom houses (in case you missed the video). But I know lots of people who, because their incomes are extraordinary, give half or more to worthy causes – and still have twenty times as much to spend on themselves as a normal upper-middle-class family. (In the McCains’ case, 20 incomes of more than $150,000.) You can’t say they don’t give because they expect the government to step in and help. If there’s one thing on which John Sydney McCain III has neither flipped nor flopped, it’s his adamancy that government not help, that government be cut back (except for military expenditures). Like many good Republicans, he expects private charity to be primary in helping those in need. The problem with that is that – even with centimillionaires giving $78,000 to charity – it’s not enough. We should respect McCain’s right to want to eliminate the estate tax on $100 million estates and to make permanent – even increase – the Bush tax cuts for the very wealthy. But it’s not good social or economic policy – especially when we are running enormous deficits. We should respect his right to oppose benefits for returning Iraq vets and to fight relentlessly, time after time, year after year, to prevent a hike in the minimum wage (that at $5.15 an hour worked out to $25,000 a year if you worked 100-hour weeks). But why would we vote for him? It’s not that John McCain doesn’t care – he just doesn’t get it.* *And you know what? – and I can say this because I’m not the candidate – maybe it is, at least a little, that he doesn’t care. How else does one explain $78,000 in giving on an income that tops $6 million a year? Living so lavishly when there’s so much suffering and so much that needs doing in the world? LOSERS John Lemon: ‘I am down 95% in BZ+ Boise, 93% in FMD, and 73% in HAPNW (now INHIW). I think I bought most of them over a year ago, so they will be long term losses if I sell. Should I go ahead and dump them?” ☞ Ouch. It’s certainly worth locking in the tax loss, if you can use it. I have tons of this stuff. I even bought more last week at next to nothing. I’ll wait 31 days and sell my initial stakes for the tax loss. (You have to wait 31 days to avoid the ‘wash sale’ rule under which the losses would be disallowed. The other way would have been to sell now, wait 31 days, and then buy, quite possibly even cheaper.) The new shares and warrants may certainly end up worthless. Probably will. But three years, until the warrants expire, is a long time. We have a rough road ahead, to say the least. But I think Obama is going to win and that there is a decent chance he will be able to inspire the country and markets around the world to see that we have a long-term plan to become strong again (most importantly: energy efficient and independent) and to gradually work our way out of this mess. So while you would be nuts to buy any of this stuff now with money you couldn’t truly afford to lose – which is why almost no one is buying this stuff – there’s always the chance that three years from now you will be the envy of the homeless shelter. And while you would be nuts to bet on, say, these General Motors convertible debentures, because GM really could go broke – really, and maybe even soon – if it makes it through to the other side, you’d do very well. The rich get richer because they can afford to take really risky bets. But they get poorer or go broke not uncommonly, too. And it may become less uncommon still. Don’t sell your RSW.
Buffett and Borealis (No, He's Not Buying It) October 3, 2008March 12, 2017 THE DEBATE Governor Palin’s weeks of cramming paid off. Not only was she well-prepared (if you put your mind to it, you really can learn to be President in two weeks), she actually winked at me! Who could fail to love that? My friend Peter, a life-long Republican financial whiz at whose most recent birthday party a congratulatory note from President Bush was read, writes: ‘I feel like I just watched an adult debating a college student.’ Peter voted for Bush twice but just wrote $60,000 for Obama. FAUX NEWS This 26-second video shows why Obama wins Pennsylvania – and why Fox is truly pathetic. FAUX REGULAR GUY This 60-second tour of the McCain home (13 bedrooms, 14½ baths) gives you a sense of how the family has lived the past 20 years. In that context, the level of the family’s charitable giving is pretty astounding. Specifics on Monday, but they sure seem not to have used any meaningful slice of their giant Bush tax cut to support nonprofits. Which is totally their choice. It’s their fortune to do with as they please. But it speaks to their core priorities. Thirteen cars, seven or eight houses, a private jet – it’s been a positively grand time to be rich and powerful in America, and John McCain has vowed, with his promise to make the tax cuts permanent, to keep it that way. ANOTHER REPUBLICAN FOR OBAMA Wick Allison – former publisher of the nation’s leading conservative magazine, The National Review – is editor-in-chief of the Dallas-Fort Worth city magazine, D. He maxed out to McCain in the primary, but now writes: My party has slipped its moorings. It’s time for a true pragmatist to lead the country. The more I listen to and read about “the most liberal member of the U.S. Senate,” the more I like him. Barack Obama strikes a chord with me like no political figure since Ronald Reagan. To explain why, I need to explain why I am a conservative and what it means to me. In 1964, at the age of 16, I organized the Dallas County Youth for Goldwater. My senior thesis at the University of Texas was on the conservative intellectual revival in America. Twenty years later, I was invited by William F. Buckley Jr. to join the board of National Review. I later became its publisher. Conservatism to me is less a political philosophy than a stance, a recognition of the fallibility of man and of man’s institutions. Conservatives respect the past not for its antiquity but because it represents, as G.K. Chesterton said, the democracy of the dead; it gives the benefit of the doubt to customs and laws tried and tested in the crucible of time. Conservatives are skeptical of abstract theories and utopian schemes, doubtful that government is wiser than its citizens, and always ready to test any political program against actual results. Liberalism always seemed to me to be a system of “oughts.” We ought to do this or that because it’s the right thing to do, regardless of whether it works or not. It is a doctrine based on intentions, not results, on feeling good rather than doing good. But today it is so-called conservatives who are cemented to political programs when they clearly don’t work. The Bush tax cuts—a solution for which there was no real problem and which he refused to end even when the nation went to war—led to huge deficit spending and a $3 trillion growth in the federal debt. Facing this, John McCain pumps his “conservative” credentials by proposing even bigger tax cuts. Meanwhile, a movement that once fought for limited government has presided over the greatest growth of government in our history. That is not conservatism; it is profligacy using conservatism as a mask. Today it is conservatives, not liberals, who talk with alarming bellicosity about making the world “safe for democracy.” It is John McCain who says America’s job is to “defeat evil,” a theological expansion of the nation’s mission that would make George Washington cough out his wooden teeth. This kind of conservatism, which is not conservative at all, has produced financial mismanagement, the waste of human lives, the loss of moral authority, and the wreckage of our economy that McCain now threatens to make worse. Barack Obama is not my ideal candidate for president. (In fact, I made the maximum donation to John McCain during the primaries, when there was still hope he might come to his senses.) But I now see that Obama is almost the ideal candidate for this moment in American history. I disagree with him on many issues. But those don’t matter as much as what Obama offers, which is a deeply conservative view of the world. Nobody can read Obama’s books (which, it is worth noting, he wrote himself) or listen to him speak without realizing that this is a thoughtful, pragmatic, and prudent man. It gives me comfort just to think that after eight years of George W. Bush we will have a president who has actually read the Federalist Papers. Most important, Obama will be a realist. I doubt he will taunt Russia, as McCain has, at the very moment when our national interest requires it as an ally. The crucial distinction in my mind is that, unlike John McCain, I am convinced he will not impulsively take us into another war unless American national interests are directly threatened. “Every great cause,” Eric Hoffer wrote, “begins as a movement, becomes a business, and eventually degenerates into a racket.” As a cause, conservatism may be dead. But as a stance, as a way of making judgments in a complex and difficult world, I believe it is very much alive in the instincts and predispositions of a liberal named Barack Obama. 7 MINUTES WITH A UNION GUY ON RACISM Powerful. 54 MINUTES WITH WARREN BUFFETT All is explained. ANOTHER WAY TO CHECK YOUR REGISTRATION A few of you reported bugginess with voteforchange.com. This site may be a helpful alternative – although for Florida it says, “Call local office,” where the Obama site handles Florida seamlessly. (As to those upset to be asked for an email address, just enter one you never check.) BOREALIS Ed H.: “Any comment? It’s a sinking like a stone. Bid/Asked is 2.80/3.60.” ☞ The stock price, while depressing, is sort of irrelevant. BOREF has always been a long-shot that will either work out or it won’t. As good a lottery ticket as I’ve thought it is . . . and as many shares as I own . . . it’s still a lottery ticket. Imagine a ticket where you had a one-in-four chance of making, say, 100 times your money. Phenomenal, no? And yet there’s a 75% chance you lose everything. A tiny amount of buying or selling moves BOREF. So, as people get discouraged and sell . . . or sell to take a tax loss, or sell because they died (technically, that would be their estate selling), or sell because they actually need the money, or sell because the IRS has garnisheed their brokerage account and forced a sale . . . the stock goes down. And may continue to. If at some point Delta announced that WheelTug™ is ready to be deployed – which may never happen! – or if at some point the slow but seemingly steady progress at Roche Bay led serious investors to believe there really is a highly valuable resource up there . . . then the stock would do very well. The past decade at first seemed to shorten the odds of success – the plane moved! the drill samples show tons of high grade ore! But by now? I remain resigned to the very real possibility, as from the beginning (“A Stock That’s Surely Going to Zero”), that this will not work out. Then again, it might.
A Quick Way to Be Sure You’re Registered Plus: How To Put Out a Barn Fire October 2, 2008March 12, 2017 QUICK! CHECK YOUR VOTER REGISTRATION I went to voteforchange.com to find out whether I’m still registered. (Our Republican friends like to do voter purges.) The site asked me address and then – an instant later – told me that if April such-and-such is my birthday (i.e., if I am that Andrew Tobias) then, yep, I’m registered. Knocked my socks off how fast it worked. I then asked for my early-voting locations (early voting has already begun in eight states) and – bang – there they were. The site may not work this well for your state, but it sure worked well for me. The first deadlines for voter registration are this Saturday. By next Wednesday, deadlines will have passed in 22 states. If you know anyone in a battleground state, be sure he or she knows about voteforchange.com. HURRY UP AND PASS THE THING This links to a summary of a study of 42 banking crises around the world. To summarize the summary: Some types of government intervention work and some don’t. One characteristic that is needed though is speed. Dithering, a la Japan, is a recipe for disaster. ☞ I love the man-and-woman-on-the-street interviews with folks angry at the situation. ‘This should not be happening!’ they say. (They’re right about that much.) ‘Absolutely not!’ they say to any bail-out. They seem quite sure that the combined wisdom and expertise of Fed Chairman Bernanke (who’s spent his life studying the Depression), Treasury Secretary Paulson (who ran the world’s premier investment bank), and Barney Frank (28 years on the House Finance Committee and now its chair) must be subsidiary to their own. It seems to me that when political polar opposites like George W. Bush and Barney Frank agree, the urgency must be real. It’s fine not to like the rescue plan. The liberal, brilliant Professor Jeffrey Sachs went on at some length on CNN explaining why he didn’t like it – but then made certain viewers understood that, if he were in Congress, he would have held his nose and absolutely voted for it. Good for the Senate last night, 74-25. Now for the House, please. Because, speaking of ‘dithering’ . . . FIRE! Few people know that on October 8, 1871, Mr. and Mrs. O’Leary, of 137 De Koven Street, were actually in the barn when their cow kicked over the lantern. ‘Patrick!’ screamed Mrs. O’Leary, looking around frantically for something wet. ‘Smash that champagne bottle and pour it on this hay!’ ‘The champagne? It cost a fortune! And what the hell’s it doing out here in the barn? — ‘ ‘Patrick!’ she screamed again. ‘ – and isn’t alcohol flammable? It just might make it worse!’ Her husband started running to the pump to get a bucket of water. Catherine herself then lunged for the champagne bottle, smashed its neck with a hammer and . . . SCENARIO A: . . . managed to douse the little fire. They went to bed. SCENARIO B: . . . was just a little too late to contain it. While the blaze ironically spared the O’Leary house, more than three square miles of Chicago were razed, leaving 100,000 homeless and 300 dead. I have purposely not Googled to find out whether champagne actually would put out the beginnings of a fire. There is uncertainty in any rescue plan. But beer would. TONIGHT’S DEBATE From the Campaign: This debate is about two very different philosophies of where to take the country: The economic philosophy that got us in this deep hole the last eight years, cost us 600,000 jobs this year and brought Wall Street to the brink of collapse and the foreign policy philosophy that isolated America and got us into a war in Iraq with no end in sight – versus a philosophy that says we need to invest in the middle class, put in place responsible 21st century regulations to protect consumers, revitalize our alliances and end this war. Joe Biden brings to the vice presidency more legislative experience and deep relationships on Capitol Hill than any vice president since the days of Lyndon Johnson and Hubert Humphrey, which is critical for an incoming Administration committed to making big, bold, fundamental changes in public policy at home and throughout the world. Governor Palin has energized John McCain’s campaign with his base, and demonstrated she’s an incredibly skilled politician who can throw a punch. She is undefeated as a debater with a 7-0 record. She debated and defeated two giants of Alaska politics: sitting Governor and 17-year Republican Senator Frank Murkowski as well as two-term former Democratic Governor Tony Knowles. She’s an exceptional communicator. ☞ I share characteristics with both. I am like Joe Biden in that I sometimes get a bit wordy. I am like Sarah Palin in that I am not qualified to be President of the United States. (If you think that’s not the relevant test, click here for a video reviewing Senator McCain’s health.) Tomorrow: ANOTHER Republican for Obama – a Texan, No Less, Former Publisher of the National Review!
Another Republican for Obama October 1, 2008January 3, 2017 TWO MINUTES WITH THE CANDIDATE Click here. It’s about your taxes. Speaking of which: LESS TIME FILING YOUR TAXES From his economic plan: Obama and Biden will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and return. Experts estimate that the Obama-Biden proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees. ANOTHER REPUBLICAN FOR OBAMA This comes – via a friend who forwarded it – from a 63-year-old capitalist, John H. Scully, who sits on the board of, among other things, our very own Plum Creek Timber. (Yes, the trees keep growing.) It’s an email to members of a social and investing club that he and other members of the Stanford Graduate School of Business Class of 1968 set up: Dear Fellow Stanco Member, Like most of us I have never asked anything of my wonderful classmates in the GSB Class of 1968. I am now. Allow me to make it clear that I write to you as a concerned citizen, not representing Stanco or the Stanford GSB, but expressing my own personal views. Some of you may share these views and some of you may not. I respect everyone’s right to differ, but allow me mention that I am hardly a political zealot. (I voted for the republican presidential candidate in every election from 1976 up to and including, I’m embarrassed to say, 2000). But as Americans, whose country has been so good to us, I believe we are now all called upon to take action in response to the extraordinary incompetence of the last eight years that has so seriously marginalized our great nation and put us at real risk. It is very clear to me that we are now in our worst economic crisis since 1929, and the possibility of systemic failure is real. While reasonable men and women can differ on the immediate steps we should be taking, it is demonstrably apparent after eight dreadful years of gross mismanagement and incompetency that we need to expunge from our polity the Bush-Cheney-McCain-Palin axis of ideological pap and judgmental disasters. With all due respect I ask, indeed implore, that you join me and millions of others in the mission to elect Barack Obama as the next president of these United States. We have a long road ahead of us to reverse the disastrous damage done to our nation in the last eight years, and Barack is the leader with the intellect, character and courage to do it. We are blessed to have his candidacy in this moment of crisis. Smart, inspirational and endowed with superb judgment, Barack is the real agent of change. He’s a man of character and principles, who wants to give back to the country that has blessed him with the “audacity of hope.” And at the core he’s a market oriented moderate, not an ultra liberal – please read the key excerpts from his book that I have attached. Those of you that like to focus on your personal taxes, you will notice that he proposes lower capital gains rates than Reagan’s era and zero for start ups! There can be little doubt that Bush 43 will go down as the worst president in the modern era. Besides the damage to our economy, our international standing has dropped precipitously, our brave military has been fundamentally weakened and our wonderful sense of limitless potential sadly compromised. Ronald Reagan’s beautiful image of the “shining city on a hill” is in real peril. Consider the legacy of the last eight years: Huge annual fiscal deficits – $450 B in the current year BEFORE the bailout, which will more than double to over $1 trillion. (Remember the democratic surpluses under fiscal conservative Bob Rubin?) Trade deficits in excess of $600B annually $700B down the drain in Iraq and over 100,000 dead – in a country that did not attack us! Ultimate costs of well over $1 trillion (Couldn’t we use those funds now!). Near exhaustion of our military capacity. Patent neglect of Afghanistan, the source of the real threat, which has lead to the resurgence of our true enemy. Zero energy policy – putting trillions of dollars in hostile or questionable hands Environmental disregard on all fronts China now our lender of last resort holding $1 trillion of US government paper (We had to save Fannie and Freddie because they and others own so much of this “agency “paper) No thoughtful oversight (in fact further liberalization of leverage limits) of the Wall Street casinos. (Lehman had 30x leverage) A decline in real family income of $2,500 in a supposed economic expansion period now ending with a thud. THESE HORRIFIC DEFICITS AND COSTS OF AN ELECTIVE WAR HAVE PUT US IN A POSITION WHERE OUR RESPONSES TO THIS HIGHLY DANGEROUS FINANCIAL PANIC ARE SEVERELY CONSTRAINED AND THE CORE OF OUR SYSTEM AND OUR VERY CURRENCY ARE AT SYSTEMIC RISK. The Bush republicans have been more effective at weakening our country than any enemy, domestic or foreign, has ever been. And we are supposed to reward this incompetence by reelecting the same party and Bush’s chosen successor? IF YOU WERE ON THE BOARD OF THIS “COMPANY USA,” WOULD YOU SUPPORT THE SUCCESSOR CHOICE AND PROTOGEE OF THE OUTGOING CEO, WHO HAD FAILED SO COMPLETELY? McCain a change agent? He has 26 years in DC. He has supported Bush 90% of the time. His campaign is run by lobbyists and the ads by Rove wanabees. He admits to a weak skill set in economics. What economic views he has were formed under the tutelage of Phil Gramm, who opposes even prudent government oversight. He’s been pro Iraq war from the outset. He wants more truncation of our tax code to favor the rich and further weaken the middle class. The projections for his policies are massive deficits and, unlike Obama, he has not presented any detailed deficit estimates, only saying the budget would be balanced in 2013! Then there are the total lies in advertising (straight talking express?) in an ad campaign produced by the same attack squad that ironically beat him working for Bush in South Carolina in 2000 with a series of clear lies. Then he chooses Palin – solely on the basis that she can boost his chances and reverse his sagging outlook, irrespective of her qualifications. Well, at least she is a change. Three prominent conservative intellectuals, led by George Will, have charitably phrased their view that, “She’s not ready.” Yet this is someone who would be a step away from a 73-77 year old president, who has had recurring melanoma. Her finger on the red button. Uncomprehensible and irresponsible risk – what kind of judgement does that show? Now I ask you to be part of the change that will allow us to emerge from this darkness and support Barrack Obama as generously as you can. A TOTAL OF UP TO $65,000 CAN BE GIVEN PER PERSON, less whatever other federal contributions you have made in the last two years (ask your legal advisor). Regina and I have each done this. Clearly most of you have the capacity to contribute generously. Most of these funds can go directly to the Campaign For Change, all of which is used exclusively to help fund the presidential race in the 18 battleground states. This is a highly focused and efficient way of getting the message out and combating the lies where it matters the most. I would be delighted to answer any questions and discuss the giving options by email or phone. If you are ready to contribute, please send the checks to me, and I will make sure they get to the appropriate party and promptly. This is a critical moment in our nation’s history. Just as our class has excelled in so many other callings, I would suggest that we are now called upon once again to lead. John ☞ Actually, it’s $67,800, not $65,000 (and on questions of federal campaign giving limits, feel free to ask me). But with literally millions of donors, the biggest push comes not from those who give all the law allows (truly grateful though we are and proud though they should be) – like the Scullys – but from those who give what their straitened circumstances permit, whether it’s $20, $50, or $250.
Your Chances of Getting the Flu Or Being Left-Handed September 30, 2008March 11, 2017 SURPRISED I thought the bill would pass – and that the Dow would drop 300 points because the markets delight in not doing the obvious. ‘Buy on the rumor, sell on the news,’ runs the old saw. Meaning that if something good is expected to happen, buy before it happens – and sell when it does. Instead, in a display of irresponsibility unusual even for Congress, the bill failed. (John McCain and George Bush were supposed to deliver 100 votes; they delivered only 65. Democrats were supposed to deliver 120 votes; they delivered 140.) So the market really dropped. Surprises move markets. (‘Buy on the rumor, sell BIG if the news fails to materialize.’) The 777 point drop, at roughly 7% – lucky sevens! – was nothing like the 22.6% (509 point) drop of October 19, 1987. Then again, a lot of stocks dropped more than 7% yesterday (just as a lot of them dropped more than 22.6% October 19, 1987) – the Dow tends to be stodgy compared to smaller stocks. So as painful as 7% is, for the average portfolio, which is less conservative, yesterday was even worse. I assume the rescue plan will pass later this week. Many others must be assuming the same thing or the market would have dropped more yesterday. If no rescue plan does pass, we could have a problem worse – at least in some ways – than any economic problem we’ve seen before, because our economy is so much more complex and interconnected – and so much more leveraged. There were no credit cards in 1929. No home equity loans. No no-money-down mortgages. The National Debt was less than 20% of Gross Domestic Product; today it approaches 70% (up from 30% when Reagan/Bush took over). And who can even quantify the leverage of some of our more esoteric financial derivatives. A true collapse of the kind Congress is being asked to avert could also hurt worse because the era of cheap domestic resources – oil gushers and firewood aplenty – seems to have waned. And because we have more to lose. As Roaring as the Twenties were, families didn’t need air-conditioning to be happy – or flat screen TVs or washer/dryers or SUVs. There were no such things. All that said, don’t get too scared. Congress will pass a bill. And unlike 1929, we have FDIC insurance, we have Social Security, we have unemployment insurance. NOT SURPRISED From the January 2005 edition of The Only Investment Guide You’ll Ever Need: I am dismayed by the reelection of George Bush. Yes, my taxes are likely to stay low, but I don’t see how we become more prosperous if much of the world hates us . . . if we are adding to our national debt at a tremendous rate . . . if we are investing in missile systems instead of education . . . if we are giving tax incentives to encourage the purchase of Hummers rather than fuel-efficient vehicles. And that just begins the list. Under either Bush or Kerry, we would have faced challenges: Terrorism, which even when it doesn’t strike costs us dearly (security guards make us safer but they do not make us richer). Globalization, which will make the whole world more prosperous in the long run, including us, but which threatens our manufacturing base and puts high-wage jobs at risk of being teleported abroad. And more. (The likelihood of high energy prices for a very long time could be another.) But under Bush, I see the problems just getting worse, not better. [ . . . ] When Alan Greenspan spooked the world by talking about ‘irrational exuberance’ in December of 1996, the Dow was 6500. Well, we’ve all worked very hard and smart these last few years, and earnings are up and we’ve built the Internet and laid a zillion miles of fiber optic cable and made astonishing breakthroughs in medicine-we’re richer than we were-so maybe 6500 on the Dow is no longer irrational at all. . . . ☞ But 14,000 sure was. And even once the bailout does pass, we’ll want to be realistic. I think we have to view the next decade as an exciting opportunity for our nation to tighten its belt, rebuild its infrastructure, achieve energy independence, and repair its balance sheet. At which point, in real terms (who knows what inflation or deflation will do the actual number), the Dow might reach 14,000 again. For all our problems, we also have tremendous strengths. And technological progress is an economic tailwind. But as the last 8 years have so tragically shown (and as the 8 years before that also showed, by contrast), who runs the show really matters. Which brings us to . . . HOW SURPRISING WOULD A PALIN PRESIDENCY BE? This piece by Bob Rice (Three Moves Ahead: What Chess Can Teach You About Business) takes the fairly conservative view that it would be a one in six or seven chance if John McCain were elected. My view, of course, is that a McCain Presidency alone – never mind a handoff to Governor Palin – would be a calamity. Our country and the world yearn for a fresh start. Our youth, in particular, yearn for an inspirational call. We can do this. But it is not four more years of Republican leadership that will provide the fresh start. And it is not John McCain who is best suited to issue to our youth – who are our future – that inspirational call. But what if it did become a Palin presidency? Rice helps us think through what a one in six or seven chance means. If McCain is elected, he notes, a Palin Presidency is more likely than your getting the flu this winter. Or about as likely as your rolling doubles with a pair of dice. A Palin presidency would be three times more likely than that either one of the presidential candidates were left-handed. (And as it happens, both are.) HOW SCARY WOULD IT BE? Newsweek’s Fareed Zakaria puts the chance of a Palin Presidency, if we elect Senator McCain, at about one in five. Others put it higher still. But the point is – unless you’d sleep well knowing you had a round of Russian roulette to play tomorrow, a six-gun to your left temple – you really need to decide whether you’d be okay with a Palin presidency. Zakaria is not. Like the conservative columnist I linked to yesterday, he thinks she should step down. On CNN yesterday he said, ‘it’s not that she doesn’t know the right answer; it’s that she clearly does not understand the question.’ To her claim of ‘executive experience,’ Zakaria responds that 85% of Alaska’s budget comes from oil revenues, and that her main job is in distributing that oil money to the citizenry: ‘This is good training to be president of Saudi Arabia, not the United States.’ The whole clip is worth watching. We live in interesting times.
Senator McCain; Paul Newman September 29, 2008March 11, 2017 McCAIN: IF YOU WATCH NO OTHER CLIP Watch this one – less than 90 seconds. It’s the judgment thing. McCAIN: JUMPING THE GUN The McCain campaign was so pleased with their man’s performance Friday they released an ad saying he had won – several hours before the debate began. McCAIN: DISRESPECTING THE COUNTY Have you seen Sarah Palin in the swimsuit contest? Hot! AND she can field dress a moose, got a D in macro-economics, and can see Russia from her house. I think she’s pretty neat (the creationism stuff and her political views notwithstanding), but one of my formerly-Republican acquaintances put it best: ‘McCain disrespected the country by choosing her to be next in line to be President of the United States.’ CONSERVATIVES LOSING FAITH IN PALIN At least one conservative columnist, Kathleen Parker writing for the National Review, calls Governor Palin ‘clearly out of her league.’ No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted. ☞ She calls for Palin to step aside. But as noble and patriotic as that would be, it wouldn’t matter. The fact would remain that, faced with a hugely important decision – and with six months to make it – Senator McCain entrusted the future of our country, should he be sidelined, to her. These are seriously challenging times. They require serious, brilliant, thoughtful people who make carefully considered decisions. Which brings us to . . . ELITISM Nobody likes the smart kids. Maybe Doogie Howser; maybe Malcolm (in the middle). But those were TV scripts written by smart kids, for ratings. In real life, the smart kids had better dumb it down. Have you noticed how even John Kerry – who used the phrase ‘who among us’ when responding to a question about NASCAR (‘who among us doesn’t love NASCAR?’) – was persuaded somehow to drop half the G’s from his gerunds? (Tryin’ to be a regular guy.) Fine. But in every other field, we seek and celebrate excellence. The most talented athlete, not the one who runs like us. The most talented singer, not the one who sounds the way we do in the shower. The teacher of the year. The most skilled surgeon. The rocket scientist who is a rocket scientist. So, sure, a President does need to be ‘of the people.’ But the Rhodes Scholar who came from nothing and went to Yale Law School, who lives and breathes public policy and keeps a billion statistics straight in his head (think President Clinton) really may serve us better than the guy who got into Yale because of his dad, writes off his first 40 years to youthful indiscretion, and failed in business despite his father’s connections (our current affable leader). Do we want a man born in a log cabin who made it through law school and became an Illinois State senator based on his brains, good judgment and eloquence (think Abe Lincoln) . . . . . . a man raised on food stamps who became President of the Harvard Law Review and an Illinois State senator, then a United States senator, based on his brains, good judgment and eloquence, whose presidential bid is backed by Warren Buffett, Susan Eisenhower, and Hillary Clinton? . . . a man in his prime who can do more than one thing at a time? Or do we want a guy more like George W. Bush, great to party with, descended from and married to ‘royalty’ (to the extent America has such a thing), whose presidential bid is backed by all-Enron-roads-lead-to Phil Gramm; whose campaign is run by lobbyists (and by the same guys who slimed him in South Carolina in 2000); who won’t release his medical records; and who, for all we honor his service – as we should – is, arguably, past his straight-talking prime? # COOL HAND I met Paul Newman three times. First in 1968, when he was Harvard’s Hasty Pudding Man of the Year. I was a member of the Pudding – not the theatrical part (no talent; nonplussed by guys in drag), just the eating and drinking part – and was somehow one of a half dozen students who got to host him for a drink before the ceremony. He had just made Cool Hand Luke, wherein he eats 50 hard-boiled eggs in an hour, so we asked him about that. (As I recall, the answer was: yeah, he really ate them.) He was unbelievably cool and gracious: just the right mix of ironic skepticism over the award (the Hasty Pudding Theatrical Society is not exactly the Royal Shakespeare Society) – and twinkle of the eye. ‘You may not remember,’ I said to him, mustering a twinkle of my own 22 years later at a fundraiser to defeat Jesse Helms, ‘but twenty-two years ago, you were Hasty Pudding Man of the Year and you came and had a drink with us and told us about the hardboiled eggs and I just had to say hello thanks for all you’ve done and are doing.’ He responded graciously: with just the right mix of ironic skepticism over the absurdity of my compliment – and twinkle of his eye. Finally, I met him and his wife of 50 years, Joanne Woodward, at their home in Westport last summer, 2007, when he was already not well, but still magnetic and unbelievably gracious. A fundraiser for the DNC. Lemonade in their ‘barn.’ Oscars and movie posters everywhere. He welcomed us and spoke of the urgent need to get our country back on track. And so . . . rest in peace, Paul Newman. We’re trying.
Sarah Clips – And Advice For Living September 26, 2008March 11, 2017 GENERAL ADVICE To get a leg up in life, keep your feet on the ground, your ear to the ground, your nose to the grindstone, your head on your shoulders, your shoulder to the wheel, your eye on the ball, your finger on the pulse, your chin up and your hand in. Being limber helps. MORE SPECIFIC ADVICE: CHARLES’S MARVELOUS INVENTION In our family, I am generally the one who tries not to waste things (‘you’re going to eat that?’ Charles will say of a perfectly good leftover) on the theory that ‘best if bought before’ gives you another few days to consume it (surely they don’t expect you to eat it right there at the check-out) . . . plus what may be weeks or months more in the refrigerator, when it is not, perhaps, ‘best,’ but still ‘very good,’ ‘just fine,’ or, at worst, ‘edible.’ I am only halfway through a half gallon of apple cider marked ‘ENJOY BY 06/29/08’ but still enjoying it. And not because it’s become hard cider – it’s still sweet, and only, at most, a tiny bit off. My point in this is not to poison you – do not under any circumstances follow my example expecting me to accept liability for the consequences. This is microbial madness. Rather, my point is that it is I, not my profligate beloved, who generally comes up with ways to scrimp or save. And so it is with no small pride, if a touch of surprise, I tell you that Charles has truly gotten with the program, turning out lights, riding his bike to work, buying lemons for decoration (a centerpiece of lemons already being cheaper than flowers, and then you can eat them) (as in: lemonade) – and generally living lighter on the land. All brought into sharp focus the other day when he came up with something entirely new. One of those, why didn’t *I* think of that? moments. You may get your shirts back from the dry cleaner differently, or – truly living light on the land – you may just wash them in cold water and hang then on a line to dry. But we get ours folded in individual clear plastic bags. The bags are made from natural gas, which is better than oil; but they’re still no friend to the environment. Likewise, the various Hefty, Glad, and Ziplock bags – not to mention Saran Wrap – we use to save the aforementioned leftovers. So here’s the breakthrough: instead of throwing out the shirt baggies, Charles realized, we can put them in the drawer with the Ziplocks, each one of which costs anywhere from a nickel to a quarter, depending on the size. And while a shirt baggie won’t work well for everything, for many things it works just fine – saving that nickel or quarter, and cutting roughly in half the number of disposable plastic bags we consume. (Speaking of which, these are really handy, too, and they stack.) Ta-da! THE SARAH CLIPS ‘I have a record of putting my country first. And that’s why I chose Sarah Palin to handle our unprecendented economic challenges and lead the Free World should I become incapacitated or die.’ – John McCain* * The first sentence is a literal quote. The second sentence – not spoken by him – follows ineluctably. No? SARAH PALIN AT HER BEST Watch her on CBS News explaining why Alaska’s being next to Russia really is an important foreign policy credential: COURIC: You’ve cited Alaska’s proximity to Russia as part of your foreign policy experience. What did you mean by that? PALIN: That Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land– boundary that we have with– Canada. It– it’s funny that a comment like that was– kind of made to– cari– I don’t know, you know? Reporters– COURIC: Mock? PALIN: Yeah, mocked, I guess that’s the word, yeah. COURIC: Explain to me why that enhances your foreign policy credentials. PALIN: Well, it certainly does because our– our next door neighbors are foreign countries. They’re in the state that I am the executive of. And there in Russia– COURIC: Have you ever been involved with any negotiations, for example, with the Russians? PALIN: We have trade missions back and forth. We– we do– it’s very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where– where do they go? It’s Alaska. It’s just right over the border. It is– from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to– to our state. SARAH SILVERMAN AT HER BEST I hesitate to include this link, because Sarah uses language grandchildren shouldn’t – and it’s not even bleeped. Then again, it’s gone mega-viral, so you’ve probably seen it already anyway. SUSPENDING HIS CAMPAIGN Two comments from many on WashingtonPost.com: abc3 said, “If McCain were serious about suspending political activity to work on the settlement, he would not have blindsided Obama by issuing his press statement before he and Obama had agreed on their bipartisan statement. At that point, he chose political advantage over bipartisanship.” GoHuskies2004 wrote, “…He blindsides Obama, and then he talks about bipartisanship out of the other side of his mouth. Even this conservative can see right through this ridiculous effort…” ☞ It would have been more impressive if they had been deadlocked before he got to Washington and then reached a deal. Instead, they appeared to have reached a deal – and then he got there. Let’s hope for better today. WAMOOPS INDEED Well, I’m sorry. If it’s any consolation (and I know it’s not), the friend who had me thinking this might be a good idea lost tens of millions of his own. I hope you lost less.
Lipstick September 25, 2008March 11, 2017 ‘Presidents need to be able to do more than one thing at a time. I’m planning to debate on Friday.’ – Barack Obama JEB BARTLETT’S ADVICE TO BARACK OBAMA It’s the next best thing to The West Wing. Click here. CONSERVATIVE ANDREW SULLIVAN ON CONSERVATIVE JOHN McCAIN I’m a couple of weeks late in passing this on. But still: McCain’s Integrity By Andrew Sullivan 10 Sep 2008 01:40 pm For me, this surreal moment – like the entire surrealism of the past ten days – is not really about Sarah Palin or Barack Obama or pigs or fish or lipstick. It’s about John McCain. The one thing I always thought I knew about him is that he is a decent and honest person. When he knows, as every sane person must, that Obama did not in any conceivable sense mean that Sarah Palin is a pig, what did he do? Did he come out and say so and end this charade? Or did he acquiesce in and thereby enable the mindless Rovianism that is now the core feature of his campaign? So far, he has let us all down. My guess is he will continue to do so. And that decision, for my part, ends whatever respect I once had for him. On core moral issues, where this man knew what the right thing was, and had to pick between good and evil, he chose evil. When he knew that George W. Bush’s war in Iraq was a fiasco and catastrophe, and before Donald Rumsfeld quit, McCain endorsed George W. Bush against his fellow Vietnam vet, John Kerry in 2004. By that decision, McCain lost any credibility that he can ever put country first. He put party first and his own career first ahead of what he knew was best for the country. And when the Senate and House voted overwhelmingly to condemn and end the torture regime of Bush and Cheney in 2006, McCain again had a clear choice between good and evil, and chose evil. He capitulated and enshrined torture as the policy of the United States, by allowing the CIA to use techniques as bad as and worse than the torture inflicted on him in Vietnam. He gave the war criminals in the White House retroactive immunity against the prosecution they so richly deserve. The enormity of this moral betrayal, this betrayal of his country’s honor, has yet to sink in. But for my part, it now makes much more sense. He is not the man I thought he was. And when he had the chance to engage in a real and substantive debate against the most talented politician of the next generation in a fall campaign where vital issues are at stake, what did McCain do? He began his general campaign with a series of grotesque, trivial and absurd MTV-style attacks on Obama’s virtues and implied disgusting things about his opponent’s patriotism. And then, because he could see he was going to lose, ten days ago, he threw caution to the wind and with no vetting whatsoever, picked a woman who, by her decision to endure her own eight-month pregnancy of a Down Syndrome child in public, that he was going to reignite the culture war as a last stand against Obama. That’s all that is happening right now: a massive bump in the enthusiasm of the Christianist base. This is pure Rove. Yes, McCain made a decision that revealed many appalling things about him. In the end, his final concern is not national security. No one who cares about national security would pick as vice-president someone who knows nothing about it as his replacement. No one who cares about this country’s safety would gamble the security of the world on a total unknown because she polled well with the Christianist base. No person who truly believed that the surge was integral to this country’s national security would pick as his veep candidate a woman who, so far as we can tell anything, opposed it at the time. McCain has demonstrated in the last two months that he does not have the character to be president of the United States. And that is why it is more important than ever to ensure that Barack Obama is the next president. The alternative is now unthinkable. And McCain – no one else – has proved it.
How We Got Here September 24, 2008March 11, 2017 James Hickel: ‘I understand the emotional underpinning behind Bill D’s outburst [raging at the Administration over the mess we’re in]. But what is the logical link between Bush Administration’s policies and the current mortgage-fueled banking crisis? Are we saying that the government should have stepped in to put limits on the amount of risk that private mortgage lenders can take on in their portfolios?’ ☞ Yes! If it was obvious to so many people that things were getting nuts, and that chickens would be coming home to roost – and it WAS obvious – it should have been obvious to a competent Administration, hired to look out for problems and mitigate their consequences. (An approaching hurricane like Katrina; a ‘tremendous, immediate’ threat like Bin Laden, the pursuit of whom Bush shut down when he took office; or, yes, a gathering housing crash, with all it would entail.) Some of this may be 20/20 hindsight (how can you possibly know a hurricane is headed your way until minutes before it hits?) – but not THIS. Millions of people getting mortgages without having to put money down or verify any means of repayment? It just had to end badly. But don’t listen to me; listen to former New York Governor Eliot Spitzer. He laid out the order of events in this February Washington Post op-ed just three weeks before his political demise: Predatory Lenders’ Partner in Crime How the Bush Administration Stopped the States From Stepping In to Help Consumers By Eliot Spitzer Thursday, February 14, 2008; Page A25 Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets. Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers. Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices. What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no. Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation. Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position. When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers. ☞ And then there was Phil Gramm, McCain’s top economic advisor. He was pivotal in assuring that energy traders like Enron and Wall Street securitizers and derivatives traders not be subject to oversight or effective regulation. Welcome to the Financial Crisis of 2008.
TV Ads September 23, 2008March 11, 2017 PRESIDENTIAL TV ADS SINCE 1952 What remarkable snapshots of history. (Thanks, Alan!) And how each one, in its own way, makes you think about the choice we face today. OR ROLL YOUR OWN Now here’s something entirely new – saysmeTV. Your beau or belle is watching his or her favorite cable news channel (say) and suddenly there you are with an ad you’ve sponsored – or even one you’ve made and uploaded – with your name on it. Or maybe you just want to promote your ice cream parlor, in your Zip code only. Fifty bucks and you’re a star.