If Abe Lincoln Started a Chicken Sandwich Business March 2, 2011March 22, 2017 TWO WELL-CIRCULATED QUOTES IN FELICITOUS JUXTAPOSITION “Either that wallpaper goes, or I do.” – Oscar Wilde’s last words (supposedly) “The problem with Internet quotations is that many are not genuine.” — Abraham Lincoln SEX AND A CHICKEN SANDWICH Why are our taxpayer dollars going to fund ineffective abstinence-only don’t-have-sex education programs? Smartly written/asked, here. THINKING OF STARTING YOUR OWN SMALL BUSINESS? Free step-by-step assistance from my friend Bryan Janeczko at wickedstart. I’m running this item a second time because small businesses need all the help they can get. Including wickedstart, a small business in which – full disclosure – I have an interest.
Paper Money, Paper Plates – China March 1, 2011March 22, 2017 CHINESE MONEY And to think that’s what we used to call worthless money – also known as “funny money.” Well, I marched up to the Citibank teller with 2,112 renminbi that Charles had tossed into bags when he came home over the years, and there was $287.86 coming back my way. (Chances are it would have appreciated over the next few years; but a birdnest soup in the hand, and all that.) Likewise a further $1,000+ in euros ($509.02), in old French francs ($349.09), old Italian Lire ($6.69), old Swissies ($40.71), Hong Kong dollars ($15.40) and British pounds ($114.82) – except that the bulk of my 2,080 Hong Kong dollars and British pounds she handed back to me – along with my 47,200 Indonesian rupiah, my 700 yen, my 33,000 won, my 240 dihrams, some Guatemalan money that had somehow found its way into the bag (Guatemala? I’m fairly certain Charles never went to Guatemala, but maybe I need to rethink that) – all notes were too old to show up on her screen. The pound notes, certainly, were right as rain. Queen Elizabeth, the Bank of England. Who could doubt it? But if my teller didn’t see a picture of currency on her screen that matched the currency in her hand, back it came. So there’s still a ways to go on this – a great project for a nephew who wants to navigate the shark-infested waters of Times Square currency conversion – but all told, including a smaller earlier stash I had cashed in, I’d say we had something a little north of $2,000 scattered around for a rainy multi-national day. CHINESE ENERGY CONSUMPTION James Stafford: “I work for oilprice.com. Our team has spent the last 3 months creating some excellent free financial widgets that cover almost all energy and metal sectors: Gold, Silver, Crude oil, Coal, Nat Gas, Copper, Aluminium, Solar Energy . . . as well as Government and Consumer Debt tables and charts. All are interactive and constantly moving. To see what we have please take a look. How we benefit is by getting a backlink from your site. As oilprice.com is still relatively new and we need a little more authority in Google, I thought providing interesting and useful financial content would help us achieve that goal.” ☞ Note how China will be catching up to our energy consumption (a dubious distinction, but still) any minute now.
You Never Promised Me A Sculpture Garden February 28, 2011March 22, 2017 THE OSCARS Geoffrey Rush was robbed. I’m so angry, I’m stammering. (I do on some level reluctantly recognize that these are actors, not the actual characters they pretend to be; and that it is the best acting that’s meant to be voted for, not the character you most like or admire. But still.) Otherwise, wonderful as always. DNC MEETING Paul deLespinasse: ‘I was just scanning around on the TV for a minute Saturday morning and ran into the Democratic National Committee meeting under way. There you were. Nice story about your mother. I do wish you guys (and the New York Times) would lay off Citizens United. One small thought: Do you suppose you might want to update your photo on this blog?’ ☞ You are so right about the photo. It must now be 40 years old. I kept trying to change it but Charles nixed every choice, promising to take a better one himself but never quite getting around to it. Now I guess I’m free to do it, finally. If you get a chance to watch the meeting, you’ll see Chief of Staff Bill Daley, Labor Secretary Hilda Solis, and Governor Kaine. I especially loved the Governor’s puzzlement over the Republicans’ opposition to Obamacare. ‘I’m glad Obama cares,’ he said. ‘If it’s not Democrats, who is gonna care?’ Not the Republicans. They want to cut taxes for the rich and the social safety net for everyone else. Democrats think that when billionaires are in lower tax brackets than their secretaries and poverty is rising, the pendulum has swung too far. CONDOLENCES Just when I thought your collective generosity of spirit had reached its outer limit, one of you, John Leeds (with the support of his wife Michele), proffered a sonnet. (A sonnet!) . . . For Andy and Charles Sometimes the most important words are said In passing; trust these words will stay with thee Though I have left to live among the dead I still love you; I know you yet love me We had our time on earth. The best of days Will linger like a morning mist ere sun Has risen. Green, the field will glow with praise Of countless drops, our love in ev’ry one. Unknown, though day must come and mist to air Must go, the dew remains in secret form Within the field; so trust the dew is there. Let day come fresh and light, and clear, and warm. Within this life, within this mystery, Our love, my Love, will live eternally. Another of you, Michael Gardner, wrote a haiku. (A haiku!) . . . Last night’s winter winds Blew a hole in my roof Leaving no space between me And everything And yet another, John Bell Young, offered his transcription and performance of Mahler’s Adagietto from the Fifth Symphony ‘in the hope it would be comforting.’ Good Lord. I am blown away. Unless you can produce an opera or a sculpture garden, the condolence window is now closed. But with my great thanks. Tomorrow: Widgets. Watch As China’s Energy Consumption Surpasses Our Own
“Shut Up,” He Explained February 25, 2011March 22, 2017 I have not seen Justin Bieber’s new movie, but I have seen its listing on IMDB – here. It receives 1.1 stars out of 10 – I can’t recall any other movie rated under 2 stars – and that rating is based on more than 22,000 votes, so it’s not just three cranky old people who wandered into “Never Say Never” by mistake, assuming it was a new James Bond. This movie may well be one of those few that are so bad you really have to see it, like “Attack of the Killer Tomatoes.” I couldn’t resist checking out IMDB’s viewer review to see how it could possibly have rated so low. I offer it here in the lovingly light spirit in which I trust it was posted: 63 out of 78 people found the following review useful. Unjustified cruelty, 15 February 2011 Author: mad_baron_haha from United Kingdom Although I agree that this was truly an awful, awful film, I do feel that the personal abuse suffered by Ms. Bieber is entirely unjustified. Yes, the songwriting and cinematography is by far the worst I’ve ever seen in a ‘music’ movie, but comments about her possible homosexuality are unjustified and hurtful. There has even been a movement by a cruel organisation of her ‘fans’ suggesting that she is really a boy in a chemotherapy wig. These people don’t seem to realise that Ms. Bieber’s androgynous look is considered very fashionable in the world of modern pop. I hope she stays away from films in the future and I wish her good luck in her career and as for her tormentors, well… all I can say is: haters gonna hate. CHARLES’ RELATIONSHIP TO FASHION Stephanie Meyer: “About a decade ago I was walking through Saks in San Francisco and was stopped in my tracks by clothes that I hadn’t seen before – fresh, original and yet accessible to a middle-age gal. For years the Charles Nolan area was the first place I headed in any Saks and I was never disappointed. When my family visited Manhattan a few years ago I dragged my husband and daughter to the Charles Nolan boutique in the Meatpacking district and was thrilled when he walked in and said hi to us. In my closet many of the best pieces are Charles Nolan, from dresses and skirts to suits and T-shirts. My college-age daughter has made off with several of his sweaters and the tan corduroy jacket she took is her favorite. It makes me sad that the handsome man we saw in Manhattan will not be designing anymore, but I wanted you to know how much his creativity has meant to me over the years.” CHARLES’ RELATIONSHIP TO MONEY I have an enthusiastic relationship to money. Thinking about it, counting it, trying to make it grow. Charles came at money from a different perspective. He liked having it and spending it and giving it to those less fortunate. He did not like thinking about it. (For one thing, it involved numbers.) By the time I met him, he was making lots, saving none. Someone was listed as a co-signer on his checking account and had been paying his bills, though by the time I met him she had converted his various monthly bills to “auto-pay” and disappeared – yet for 16 years her name remained on the account. I met her at the funeral. Another friend did his taxes. Having grown up without money, Charles might have turned into one of those people obsessed with switching off lights when leaving a room. But it was actually I, the privileged kid, who obsessed over such things. We enjoyed the contrast. “He’ll eat anything,” Charles would explain to friends when I rescued some perfectly good morsel from imminent disposal (or occasionally – think George Costanza – from the garbage itself). Charles would eat only very specific things, and they did not include leftovers. For years, Charles would have huge balances sitting idle in his checking account at the same time as he was paying 29.9% plus late fees to American Express. Bad enough that in our first year together he got me “proper notecards” (which I did need) at Cartier (agh!) and that he had spent so much on them I could never bring myself to use them. On top of all that, he paid Amex a 29.9% premium for the convenience of being able to toss his bills into a large pile of unopened mail that only got resolved with each year’s spring cleaning. There is a book I have always loved (but never read) – from the early Sixties I think – entitled, “Shut Up,” He Explained. My parents had it lying around. It is perhaps the most inspired book title ever. And it comes to mind because of a similarly definitive phrase Charles would utter from time to time. He would come back from the store with (for example) a pint of heirloom tomatoes and, horrified (because I knew what that store charged for heirloom tomatoes), I would ask . . . “how much were the tomatoes?” I know something about tomatoes, and will pay up for them, within reason. I love tomatoes. But $8.95 for a small plastic container? Rather than criticize or confront him directly, I would feign casual curiosity. Perhaps if they were cheap I’d want to go back and pick up some more. “Hey, how much were the tomatoes?” “I don’t look at prices,” he would explain. “Sweetness!” I would moan. But as far as he was concerned, he had provided a fully reasoned response and all the information one could need. “Shut up,” he explained (with his glare). He didn’t want to be a person who had to skimp. Or had to think about skimping. Or who ate his eggs out of the pan. One properly cooked eggs in a skillet and removed them with a Calphalon spatula, laying them, properly, on china and eating them, properly, with a silver knife and fork and linen napkin. He allowed me my stainless steel, but did not use it himself. Sometimes the only way I dared try to influence his behavior was through this page. For example – though not a coffee drinker himself – Charles made me coffee every morning. I bit my tongue as – to make that one cup – he boiled an entire kettle of water (wasting water, energy, and time) and used enough coffee to make three cups, two of which each day went down the drain. I posted a column about the virtues of boiling just enough water for the task at hand, but columns like that never interested him. A proper kettle is meant to be filled with water. I learned not to push it. We were just different. (See the aforeposted Only Relationship Guide You’ll Ever Need.) Somehow, it’s true, he had an innate sense of fashion economics – which fabrics and styles would yield an adequate mark-up and the yardage and geometry required for an efficient pattern. He helped Ellen Tracy and then Anne Klein make a ton of money. And when confronted with a budget, however small, he never failed to find an eye-popping solution. But budgets were not his thing. Money was not his thing. He would empty his pockets at the end of each day and toss the contents into the nearest receptacle. We had little shopping bags of paper money all over the place. This was handy for tipping delivery men, except that a lot of it was foreign currency. He’d come back from abroad, dump the money, and never remember to take any of it back for the next trip – to him it was more like a souvenir or a whimsical decoration than hard-earned, investable cash. So now, at last, I have aggregated all that money – a task I was born to enjoy – and, with a friend, sorted it by country with a rubber band around each. Indonesian money. Yen. Hong Kong dollars. Remnimbi. Lire (yes, Citibank tells me they will still take these). French francs, Swiss francs. Pounds. Euros. And at least one currency – dihrams – whose monarch and country of origin I could not identify. Moroccan, I’m guessing. All told, it is a four-inch stack. And I have no idea what it’s worth (except for the pounds and the euros, which should fetch about $600). Charles would have had absolutely no interest in finding out. I can’t wait. I had meant to take them to the bank yesterday but had to leave on a trip, so you and I will just have to contain our excitement. For me, at least, it will not be easy. Okay; I am well past making my point. Charles – sweet, brilliant, wonderful Charles – would have shut this down long ago. So let me leave it at this: Charles once gave a friend a pile of old magazines. A few weeks later, the friend came by to return a forgotten $5,000 that he had found tucked into one of them. Can you imagine?
The Ultimate Koch Machine February 24, 2011March 21, 2017 Amy Vail: ‘Let’s fuse two threads of your recent columns together: A silver lining to our rapid descent into plutocracy is that, when the machines take over in 2045, rich and poor alike will be made members of a permanent underclass. (See? I’m an optimist, too!)’ ☞ There is always a bright side. Actually, Amy’s insight gives me an excuse to address something else. Imagine a world of such technological progress that a single machine, owned by a single family – the Kochs, say – could produce essentially everything anyone needed. It used to take 60% of the citizenry to grow our food; now, just 2% or so. It used to take 400 people to perform Mahler’s Second Symphony; now, just the touch of an iPod. What if, sometime in the future, to do the basics – grow our food, generate our energy, produce our clothes and housing and transport – it took just one giant machine (with robot appendages and so on), generating its own limitless energy from the sun, oiling and repairing itself as needed, producing abundant fresh water via desalinization . . . the works. Ridiculous, but here’s my point: Technology has the potential to provide us with ever more comfort and prosperity. But a key challenge is already, and may increasingly be, how to share that wealth. Should the Kochs (say), having come to own that machine through lawful* means, control 90% of the world’s wealth? While everyone else, desperate for employment (because what would really need doing that the machine couldn’t do cheaper?), and thus willing to work for peanuts, lived at subsistence? *They bought the patent on the limitless energy piece, which provided the wealth to acquire everything else; and they ‘persuaded’ Congress to extend patent protection on limitless-energy devices to 500 years. Again, ridiculous. Reductio ad absurdam (or maybe just absurdam?) to make the point. But not ridiculous – or evil – is the need to find ways for the seven billion of us to get along and share the wealth, while still providing for loads of individual freedom and incentive. Hence, for example, a progressive income tax. An estate tax. A minimum wage. Limits on campaign contributions. Antitrust laws. Collective bargaining. A social safety net. All kinds of things that fall way short of communism* but that are needed and should be welcomed. Unless, that is, you believe that the Kochs (et al) deserve tens of billions, because they have created so much value for the world, and that billions of others deserve to suffer because they didn’t happen to be born in the right place to the right parents or with the right physical and mental attributes. * ‘From each according to his ability; to each according to his needs’ . . . a utopian system that so flies in the face of self-interested human nature as to lead to oppression and misery. It’s a balance. I would be the first to agree that such things as LBJ’s well-intentioned war on poverty went too far to be effective. Likewise, the 90% and 70% top tax brackets that prevailed for decades as we paid down our massive debt from World War II. But the simple-minded notion that we should go back to the good old days of Nineteenth Century unregulated capitalism (with its 1890 life expectancy of 42.5 years for white males; 58.5 years for those who survived childhood) – well, that extreme clearly doesn’t work for 2011 either. It’s fair to argue over where the balance should be at any given time. I would argue that today’s Democrats are far closer to having it right than the Republicans (for example, under Clinton, and his tax rates, we had prosperity and a balanced budget). And I would argue that as technology does race along – and fewer and fewer people are required to provide the essentials – the balance should naturally and gradually shift toward more redistribution, not less. MARRIAGE I assume you’ve seen the news. I’m proud of the Obama Administration for advancing equal rights – a bedrock of our union (‘that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness’). Just as churches must absolutely be allowed to discriminate against certain people as an article of their faith, so government, in the issuance of civil licenses or in any other way, must not. GLDD Reported a good year. I’m in it for the long term.
The Kochs . . . DCTH . . . And What Would You DO If You Lived Forever? February 23, 2011March 21, 2017 THINKING OF STARTING YOUR OWN SMALL BUSINESS? Free step-by-step assistance from my friend Bryan Janeczko at wickedstart. BOB HERBERT: ‘WHEN DEMOCRACY WEAKENS’ From his recent New York Times column (thanks, Ron): . . . When the game is rigged in your favor, you win. So despite the worst economic downturn since the Depression, the big corporations are sitting on mountains of cash, the stock markets are up and all is well among the plutocrats. The endlessly egregious Koch brothers, David and Charles, are worth an estimated $35 billion. Yet they seem to feel as though society has treated them unfairly. As Jane Mayer pointed out in her celebrated New Yorker article, ‘The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry – especially environmental regulation.’ (A good hard look at their air-pollution record would make you sick.) It’s a perversion of democracy, indeed, when individuals like the Kochs have so much clout while the many millions of ordinary Americans have so little. What the Kochs want is coming to pass. Extend the tax cuts for the rich? No problem. Cut services to the poor, the sick, the young and the disabled? Check. Can we get you anything else, gentlemen? The Egyptians want to establish a viable democracy, and that’s a long, hard road. Americans are in the mind-bogglingly self-destructive process of letting a real democracy slip away. . . . ☞ That’s why you should support Democrats. Democrats may not be perfect on every issue you care about; but we lean against the gargantuan rise in income inequality. We believe Warren Buffett should be in a higher tax bracket than his receptionist (and he believes it, too); we believe that for 30 years we tried favoring the rich and powerful at the expense of everyone else – we tried slashing regulation and investment in infrastructure and vilifying government – and it wrecked the national balance sheet (despite the Clinton surpluses) and handed Obama an economy on the brink of depression. CLARENCE THOMAS AND THE KOCHS And speaking of the Kochs, you gotta watch this. FDR, OBAMA AND THE KOCHS And still speaking of the Kochs: By Coup (FDR) or by Cash (Obama): Government Takeovers Then and Now By Myriam Miedzian In 1934, General Smedley D. Butler testified to the Congressional McCormack-Dickstein Committee — formed to investigate Fascist and Communist activities — concerning a plot to overthrow President Franklin Roosevelt. . . . Butler had pretended to go along with the plot in order to discover its backers and their goals. In its February 1935 report the committee stated that it: “received evidence showing that certain persons had made an attempt to establish a fascist government in this country… There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.” . . . In a 1971 interview with Jules Archer, author of The Plot to Seize the White House, Former Speaker of the House and head of the Committee, John McCormack, confirmed that, “There was no doubt that General Butler was telling the truth… Those fellows were afraid that Roosevelt would take their money away by taxes… The plotters definitely hated the New Deal because it was for the people, not for the moneyed interests… They were going to make it all sound constitutional… with a high-sounding name for the dictator.” . . . The plotters were furious that “socialist” FDR had gone off the gold standard, abolished child labor, introduced minimum wages, was working on a shorter work week. And now Social Security! Today, more than seventy-six years later, some of the wealthiest Americans and corporate chieftains are railing against President Obama and many of the same programs: they want to get rid of Social Security and minimum wages, and want their tax reductions to be permanent. They reject Obama’s “socialist “health care plan — a plan which does not include a public option, and is very similar to health care bills proposed in the past by Republican Senators including Bob Dole. They deny global warming, oppose legislation to protect the environment and protect Americans from pollutants, and want to get rid of the Environmental Protection Agency (EPA).) But have no fear, in today’s political process, thanks to the role of big, self-interested money — combined with brilliant strategy — there’s no need for a coup against Obama. The poster children for such strategic “investments” are the Koch brothers — Charles and David — each worth approximately $21 billion. They are major funders of, and fund raisers for today’s ultra conservative-libertarian movement. They approach politics with what has been described by Jane Mayer in her August 30, 2010 New Yorker article, ‘Covert Operations‘: The billionaire brothers who are waging a war against Obama, as “the deliberation of an engineer.” . . . Idea Creation, Policy Development, Education: These are provided by Koch funding of right wing think tanks [whose] conclusions are then presented in the mainstream media — rarely are readers informed that these spokespeople are on a right wing payroll. This is how the public is “educated.” Grassroots” Organizations: The Tea Party — that organization of just plain folks fighting “socialist” Obama — was funded by the Koch brothers. Before the 2010 election, Tea Partiers were provided with lists of candidates to attack. The Koch-founded Americans for Prosperity advocacy group has held at least eighty events protesting cap-and-trade legislation. It spent $40 million on the 2010 election cycle, and organized rallies and phone banks, canvassed door to door in nearly 100 races across the country. Some of the beneficiaries are newly elected Reps. Morgan Griffith ( R. VA), Cory Gardner (R-Colo.) and Adam Kinzinger (R-Ill.). All three now sit on the Energy and Commerce Committee. Lobbying and Political Action: Since 1998, Koch Industries has poured more than fifty million dollars into lobbying. The company’s political-action committee, KochPAC, has put approximately eight million into political campaigns, more than eighty percent of it to Republicans. Since 2006, Koch Industries, heavily invested in oil, has outspent all other energy companies in political contributions. Other gifts by the Kochs may be untraceable — federal tax law permits anonymous personal donations to politically active nonprofit groups. Litigation: According to the Kochs, Supreme Court Justices Scalia and Thomas have been guests at their biannual meetings in which conservative and libertarian millionaires and billionaires gather with conservative politicians such as House Budget Committee Chairman Paul Ryan (R-WI), and media stars such as Glenn Beck to raise money for politicians who support their causes and to develop strategies for preventing legislation deemed undesirable. In the 2010 Supreme Court Citizens United decision, Thomas and Scalia were 2 of the 5 judges who rejected government legislation to limit political spending by corporations in elections. What is striking about today’s “war” against Obama is that Obama is no FDR. He is a centrist pragmatist . . . Depicting him as a socialist — Newt Gingrich has called him “the most radical president in American history” — is absurd, and clearly used to discredit anything he stands for. And he does stand for continuing FDR’s New Deal. So, with the addition of environmental protection, it is really FDR and the New Deal that are being attacked again — 21st century style! ☞ If the foregoing alarms you, you may want to help Common Cause Uncloak The Kochs. DCTH First suggested here at $5.37 a year ago, DCTH quickly shot up to $16, just as quickly backed off, slowly edged back over $11 last week – and then dropped 40% to $6.90 or so on yesterday’s open. Guru writes: Well, this is an unusual situation: because of concern over safety (two patients died so quickly in the treated group that it was clearly a leak in the device that allowed too much melphalan to escape into the periphery) the FDA has issued a “Refuse to File” letter. Refuse to File letters are issued when the FDA is unable to evaluate the application as it currently exists. What appears to be happening is that the FDA is saying up front: “we need more safety data – more patients treated, some longer follow up – to ensure that the device is doesn’t present significant risk of killing people.” But the FDA seems to be saying “we want this resolved now” rather than waiting til the middle of the year and getting it resolved later. I suppose the FDA does believe this is an important therapeutic product – they have asked for no new efficacy data – and as such is trying to approve it as soon as possible, so asking for the safety data now, rather than six months for now. It is clear from 8 years of trials that, properly administered, the device is not killing people. If there was something inherent to the device that truly indicated it had an uncontrollable chance of killing people, they would have stopped the trials years ago. The NIH has lots of data. DCTH says it can complete and file this data by September. DCTH says they are on track to receive the CE mark in Europe anyway. That could be true, but the Europeans aren’t dummies. A safety concern for the FDA is likely the same for them. Bottom line: If I look out a year from now, I fully and completely expect it to be back at 12 on an FDA approval. However, it could go lower in the near term and could be “dead money” til then. ☞ I’m happy to hold on, and perhaps even buy a bit more – but only with money can truly afford to lose. LIVING FOREVER Ken Doran: ‘Re Monday . . . immortal is a good thing? I really wonder if having one’s brain/mind/soul perpetuated (trapped?) in a computer memory won’t be a lot like being a quadriplegic. Maybe we will just need to wait a while longer for the Kurzweil Machine to solve that problem by being able to spit out fully functional adult human-form Andys and Kens, presumably in unlimited quantities. But how much longer to create extra Planet Earth’s to put them all on?’ ☞ If we are simply downloaded onto computer chips, there should be plenty of room for us. And I’d wind up doing mainly what I do now: email.
Soap Kitchen February 22, 2011March 21, 2017 There was a short column yesterday, holiday notwithstanding. Click here and live forever. (“But why would anyone want to?” one of you asks tomorrow.) Today, two things: WISCONSIN As usual, Krugman nails it. God bless the New York Times: February 20, 2011 Wisconsin Power Play By PAUL KRUGMAN Last week, in the face of protest demonstrations against Wisconsin’s new union-busting governor, Scott Walker – demonstrations that continued through the weekend, with huge crowds on Saturday – Representative Paul Ryan made an unintentionally apt comparison: ‘It’s like Cairo has moved to Madison.’ It wasn’t the smartest thing for Mr. Ryan to say, since he probably didn’t mean to compare Mr. Walker, a fellow Republican, to Hosni Mubarak. Or maybe he did – after all, quite a few prominent conservatives, including Glenn Beck, Rush Limbaugh and Rick Santorum, denounced the uprising in Egypt and insist that President Obama should have helped the Mubarak regime suppress it. In any case, however, Mr. Ryan was more right than he knew. For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin – and eventually, America – less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side. Some background: Wisconsin is indeed facing a budget crunch, although its difficulties are less severe than those facing many other states. Revenue has fallen in the face of a weak economy, while stimulus funds, which helped close the gap in 2009 and 2010, have faded away. In this situation, it makes sense to call for shared sacrifice, including monetary concessions from state workers. And union leaders have signaled that they are, in fact, willing to make such concessions. But Mr. Walker isn’t interested in making a deal. Partly that’s because he doesn’t want to share the sacrifice: even as he proclaims that Wisconsin faces a terrible fiscal crisis, he has been pushing through tax cuts that make the deficit worse. Mainly, however, he has made it clear that rather than bargaining with workers, he wants to end workers’ ability to bargain. The bill that has inspired the demonstrations would strip away collective bargaining rights for many of the state’s workers, in effect busting public-employee unions. Tellingly, some workers – namely, those who tend to be Republican-leaning – are exempted from the ban; it’s as if Mr. Walker were flaunting the political nature of his actions. Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes. So it’s not about the budget; it’s about the power. In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate. Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions. You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years – which it has – that’s to an important extent due to the decline of private-sector unions. And now Mr. Walker and his backers are trying to get rid of public-sector unions, too. There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence. So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t. SOAP KITCHEN Lisa Becker: ‘This past Christmas Day I was home cooking for my husband when I saw a news report about a grass roots organization operating here in Atlanta, the Global Soap Project. It was founded by a man named Derreck Kayongo. He and his family fled from Uganda during Idi Amin’s terror in the late 70’s. Derreck has since become successful. He was staying in a hotel when he saw a housekeeper throw away a bar of soap that had been used once. He saw an opportunity. The Global Soap Project has organized literally dozens of hotels, first in Atlanta, then around the country, to save those used bars of soap. They are shipped to a warehouse here, sanitized, and formed into new bars of soap. They are then shipped to refugee camps and to displaced people around the world. . . . As a healthcare worker, I understand the importance of the act of someone washing their hands. I was immediately hooked, because I saw the bigger implications. The World Health Organization estimates that a child dies of a preventable disease every 30 seconds, simply because they can’t cleanse themselves. If a mother can cleanse herself before she breast feeds her baby, if a family can wash their food before they eat it, to wash their kitchen utensils, to bathe, and wash their clothes – this is a project that has the possibility of saving lives and alleviating suffering. I will be present for this project for the long haul. . . . As a new volunteer, this is what I saw. The warehouse is small, located off of an access road behind a strip center. When you first walk in, first of all there is grated soap all over the floor. On one wall of the warehouse, there are literally piles of garbage bags full of soap ready to be processed. Volunteers like me work in shifts. To sanitize the soap, we scrape off the outside with a potato peeler. The clean soap is then grated, then put into a machine that looks like a giant pasta maker. The machine melts the soap, then forms it into one long bar of soap at the end of the machine. The soap is cut into generously sized bars, then packaged into crates, ready to ship. . . . Derreck has told me that he has to be very careful about shipping the bars. In those parts of the world, products like ours can end up on the black market, so he only uses volunteer organizations that he trusts, like Amnesty International. (Derreck told me that he once followed a Global Soap shipment to a refugee camp in Africa. When the mothers in the village saw what had been brought to them, they were so overjoyed they danced in the street.) . . . I also saw as a new volunteer that this organization is a grass roots as they come, working on a shoe string budget. Derreck pays for the warehouse himself. They had a wish list for supplies a mile long that wasn’t being met. In honor of Charles, that organization will never want for anything again. I worked a Global Soap shift today and had to make two trips in my car to bring in all of the supplies. It will take me time, the list is long. . . . Isn’t it funny how so many things are connected? Because your book helped my husband and me 20 years ago, we have the money to do things like this. . . . My husband David and I are like peas and carrots. We adore each other, and there is going to be a time that we will have to face what you are right now. One being without the other. That’s why I like believing in an afterworld. Our bodies are just shells. We’re vulnerable. But there are some things that never die, like true love. No matter what, we’ll see each other later.’
Live Forever February 21, 2011March 21, 2017 Caveat emptor. Friday’s footnote notwithstanding, that’s pretty much all I remember from three years of Latin. (Cogito, ergo sum. Res ipsa loquitur. Arma virumque cano . . .) But in a few years I may have all the world’s languages implanted in my little brain: KURZWEIL, TELOMERASE, JEOPARDY, 2001 Sue Hoell: ‘Did you see the TIME article on Ray Kurzweil?’ ☞ The basic notion is that in about 35 years computers will have become so fast – and so much smarter than humans – that they will take over their own continuously improved designs and brush us aside (what would they need us for?) or meld with us (who among us would not want a few implanted superpowers?). And (as mentioned here from time to time), we could live forever. (‘In November, researchers at Harvard Medical School announced in Nature that they had . . . administered telomerase to a group of mice suffering from age-related degeneration. The damage went away. The mice didn’t just get better; they got younger.’) Forty-three years ago, the computer HAL (subtract one letter from I and B and M) all but succeeded in brushing aside its human masters in the iconic 2001: A Space Odyssey. Last week, IBM’s Watson drubbed its human competitors at Jeopardy. Where will we be in 2045? And wouldn’t it be a very good idea to learn to get along with each other in the meantime? Don’t miss this story. Amo amas amat; amamus amatis amant. Ave, atque vale.
CVV Worth $17.08? He Said With a Grin, To Make Right Thursday's Sin . . . February 18, 2011March 21, 2017 I’m sorry about yesterday – I wanted to nail the thing about Charles’s relationship to money but then I got sleepy, and when I get sleepy my mind reverts to ‘roses are red’ and I’m useless. Which is too bad, because now there is now SO much important stuff backed up, starting with this assessment from Time: The Stimulus Turns Two: How Obama Quietly Changed Washington By Michael Grunwald President Obama is often mocked for failing to change Washington, and clearly, his lofty campaign vision of post-partisan cooperation hasn’t come true. But behind the scenes of the Beltway perpetual-conflict machine, Obama has made quiet progress towards reforming Washington – not politically, but bureaucratically. The most important reform, launched two years ago today, was tucked inside his unpopular stimulus package, and inside his new budget, he’s trying to expand it. The reform is a simple concept that certainly ought to be post-partisan: Harnessing the power of competition in the spending of taxpayer dollars. Most federal programs spread cash around the country like peanut butter through rote, check-the-boxes, everybody-wins formulas. Obama has tried to divert funds into competition-based, peer-reviewed, results-oriented grant programs that reward only the worthiest applications. The best-known is the Race to the Top education program, but the stimulus hatched similar competitions in energy, transportation, housing, health care and broadband. And Obama’s 2012 budget proposes new races to the top in everything from juvenile justice to workforce development to agricultural research. (Read TIME’s report card on Obama’s first year in office.) At a Cabinet meeting today to commemorate the second anniversary of the stimulus, Vice President Joe Biden will release a lessons-learned report that includes a section titled “Competition Brings Results.” (His aides gave me an exclusive copy of the report, titled “A New Way of Doing Business: How the Recovery Act Is Leading the Way to 21st Century Government,” because I was already writing about the topic. And perhaps because I’m the only journalist in America who keeps writing nice things about the stimulus.) At the meeting, Education Secretary Arne Duncan, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood will all talk about the power of competition to promote good government, encourage innovation and get better returns on taxpayer investments. Biden is sure to gush about stimulus successes, and the various ways the budget aims to build on them. But their self-congratulation probably won’t get much attention, because bureaucratic progress is a lot less dramatic than political warfare. And it’s quite possible that the progress will end with the stimulus; in not-yet-post-partisan Washington, the only thing House Republicans consider deader on arrival than an Obama budget initiative is an Obama budget initiative inspired by the stimulus. Still, the $4.35 billion Race to the Top program does have some bipartisan support – Jeb Bush, George Will and Arnold Schwarzenegger love it – and it does show how competition can create laboratories for change. By setting clear goals and guidelines – the cash was reserved for states that carefully measured student and teacher performance, promoted charter schools, and adopted other accountability-oriented reforms – the program encouraged 41 states to change laws or policies before the feds even spent a nickel. The application process also put a premium on cooperation among school leaders, teacher’s unions, parent groups and elected officials. So the impact of a program that amounts to less than 1% of the education budget will extend well beyond the twelve states that won grants. The stimulus also financed a separate $650 million competition to identify innovative evidence-based school programs; it received over 1000 applications for 49 grants, a vivid illustration of pent-up demand for something different. (See pictures of homeschooling in America.) Now Obama wants to pour another $1.4 billion into new education competitions, including an Early Learning Challenge Fund to encourage reforms in early childhood education, a “First in the World” program to improve outcomes in higher education, and an additional Race to the Top targeting school districts instead of states. “By introducing competition, you get a much better bang for your buck,” says Jared Bernstein, Biden’s top economic advisor. “You can’t do it with every federal program, but it’s one way to reinvent government for the 21st century.” There were grant competitions scattered all over the stimulus, and almost all of them were dramatically oversubscribed. A $2 billion program seeking innovative approaches to stabilizing foreclosure-ravaged neighborhoods received $15 billion worth of applications. Obama’s $8 billion high-speed rail initiative received $55 billion worth of applications. The Department of Energy received an astonishing 3700 responses to its solicitation for radical blue-sky ideas that would transform the clean-energy landscape if they happened to work; only 37 received first-round funding. But the department’s seal of approval apparently meant something to private funders; a half dozen of those projects have already attracted additional venture capital. Meanwhile, with $35 billion in stimulus cash to distribute through a slew of competitive programs – for everything from energy efficiency programs to battery factories to advanced biorefineries – the energy department itself became the world’s largest venture fund. To help evaluate the applications, Chu recruited over 3,000 independent experts, who devoted about 50 person-years to the task. That kind of scrutiny isn’t required for formula programs that distribute cash to all qualified applicants, much less earmarks that simply dump the money into congressional pet projects. (Watch a Q&A with Chu.) Obama’s budget includes $100 million for a “Race to Green” competition for innovative state and local building codes, and $200 million for a similar race for communities that invest in electric vehicles and charging stations. There’s $380 million for a Workforce Innovation Fund to reward successful approaches to job training, and $120 million for “a new performance-based Race to the Top-style Juvenile Justice System Incentive Grant Program.” And there’s $32 billion for competitive transportation grants designed to promote safety, livability and innovative approaches to reducing congestion, along with a $30 billion national infrastructure bank that would also provide merit-based loans and grants. It’s hard to overstate how radical this approach is, especially in the world of transportation. Aside from earmarks, almost all transportation funding is formula-based, where every state is entitled to a slice, and any project is acceptable as long as it fits into a neat silo (highway, airport, etc.) and provides all the necessary paperwork (traffic studies, minority hiring plans, etc.) It’s nobody’s job to ask whether the project actually makes any sense or serves any national purpose. But the stimulus included $1.5 billion in competitive grants for major projects that wouldn’t necessarily fit into a neat stovepipe but would provide significant economic and environmental benefits, from public-private partnerships to expand freight-rail capacity in seven states to new streetcars in Tucson, Dallas and New Orleans to a green-themed revitalization of a tough Kansas City neighborhood. The Department of Transportation was inundated with nearly 1400 applications for its first 51 grants. And DOT officials say the program galvanized their bureaucracy; it turns out that civil servants work a lot harder when they’re assigned to help evaluate whether projects would be good for America, rather than whether projects have submitted all their paperwork. “Republicans ought to love this stuff,” said one senior administration official who requested anonymity. “It’s evidence-based, it’s merit-based, it’s results-based. It’s not government telling you what to do; it’s setting the goals and letting the applicants figure out how to get there.” There could be legitimate nonpartisan concerns about the Race-to-the-top-ification of federal spending. Rigid formulas provide certainty and a measure of equality; competition introduces subjectivity, and opportunities for political shenanigans. Rigid formulas are determined by Congress; competition introduces flexibility, and additional power for the executive branch. And some programs don’t lend themselves to competition; formulas work just fine for Social Security benefits and food stamps. (Comment on this story.) But legitimate nonpartisan concerns won’t drive the debate over Obama’s budget, especially where stimulus-related initiatives are concerned. At his Cabinet meeting today, Biden will present the good news of the Recovery Act, which helped avoid a depression, reduced the unemployment rate by 2%, cut taxes for 95% of Americans, bailed out every state to prevent mass layoffs, funded over 75,000 projects to upgrade roads, parks, sewers and just about everything else, and made unprecedented investments renewable energy, health information technology, broadband, the smart grid and much, much more – with no earmarks and virtually no fraud. But to Washington Republicans it’s the “failed stimulus.” That was their story in 2009, when they opposed it en masse, and after their sweeping victories in November, it’s hard to see why they would want to change it. Anyway, most Americans believe it. Obama wasn’t the first presidential candidate to promise a new era of bipartisanship; his polarizing predecessor, after all, was supposed to be a uniter, not a divider. But it’s a silly promise to make, because your opponents can break it for you by refusing to cooperate. Washington is remarkably resistant to that kind of cultural change. On the other hand, bureaucratic change ought to be genuinely achievable, if only because the 24-hour cable yappers don’t really care about bureaucracy, and the sillier aspects of government are obvious across party lines. Obama’s stimulus did begin to usher in a new era of rationality through competition, where you had to do more than just check the right boxes and extend your hand to qualify for a federal check. But the most important competition took place in November, and Obama’s team lost. It’s possible to change Washington, but Washington can change back, too. DEFUND THE WILD WEST Jim Leff: ‘Re ‘Defund Kentucky‘ Wednesday, you and Begala overlooked a far larger and longer-standing version of the same hypocrisy. How about the entire American west? It’s been a powerhouse of American libertarianism for decades, yet its economy depends on deep federal subsidy. Big ranchers grew rich from a federal dole and used their wealth to push for denial of basic needs for everyone else – strictly on ‘philosophical’ grounds. I don’t blame the right for this hypocrisy. I blame the left for being too wormy to point it out.’ BIG PHARMA PROFITS Joel Wesson: ‘If the US moves toward a more rational health care system – and the government is allowed to negotiate what Medicare pays for drugs – the speculative drug stocks you and Guru suggest would be less likely to be so profitable. We might also have a healthier population at lower total cost.’ ☞ And that’s not the only big picture trend that could someday pinch these stocks. This Newsweek story features a highly regarded genius who says that much of the expensive medicine we rely on is worthless. Ouch. DYAX First suggested at $3.17 and briefly topping $5, it closed at $1.98 yesterday. Back in November, we suggested selling it for a tax loss. But I held some . . . and so yesterday checked back with Guru for an update: The DYAX competitor I told you about came out with its data and it was positive. I expect a launch of the competitor in 2011 and it should have the upper hand. It will likely have no meaningful sales. Still, the company is in lots of partnerships for other drugs. You never know, out of the blue something could be announced and make the stock pop. If you are comfortable treating this as an option without an expiry date where ‘you never know’ – one of 14 partnerships could suddenly say something positive (though these partnerships pay DYAX at best single-digit royalties) – then you can hold. If you prefer the theory that ‘I want to know why I should be making money,’ then you want to sell this and go into something like CBRX, or pretty much any of the other recommendations. CVV Aristides’ Chris Brown: ‘We have built a significant position (3% of the fund) in a very speculative company named CVD Equipment (ticker CVV) which makes products that enable R&D, prototyping, and manufacture in a variety of extremely high-technology industries (e.g. nanomaterials, solar, LED). Prior to the global economy falling apart, the company had a record revenue year in 2008 ($18 million, up from just under $14 million in 2007). Recently, the company has received orders at an unprecedented pace: over $7 mil in 3Q10, $8 mln in 4Q10, and $9.3 mln in January 2011 alone. The stock has flown higher on these recent press releases, in spite of the fact that the company filed a $20 mln shelf registration [for sale of $20 million worth of stock] at the same time it revealed its January orders. It is a NY-based company with a seemingly very well qualified management team. . . . If one annualizes orders for the last 7 months, that yields a very rough forward annual revenue run rate estimate of $41 million/year. Given the high-tech nature of the company’s business, in this market environment I believe enterprise value-to-revenue is an appropriate way to value the company, and believe it is very reasonable to assign a value of at 2.5x EV/forward revenue based on public peers in other high technology applications. The company has no net debt, so its EV is its market cap. The company has about 5 million shares outstanding, and I believe they are likely to issue another 1 million shares in a secondary offering, as they will need more working capital given the recent order flow. The stock last traded at $11.21. Assuming they do issue shares, and they use the proceeds to buy inventory (so that it’s no longer cash), that gives an enterprise value of $67.26 million, versus a target of $102.5 million. In other words, based on what is known about the company right now, I think the shares should be trading about 50% higher ($17.08). If future orders resemble anything like January’s, then the price could go much, much higher than that. If you blog it, please remind your readers to use limit orders if they are buying something small and illiquid like this.’ ☞ By the time I read Chris’s email, the stock was $11.68 bid. It touched $12.60 in the middle of the day. When it calmed down a bit, I bought some for $11.90. I sure would have preferred to buy it at $8 a few days ago but (and here is the main thing) I paid $11.90 only with money I can truly afford to lose. Have a great long Presidents Day weekend.* *There once was a man from Manhattan Whose writing was like purple satin. He said with a grin To make right Thursday’s sin: ‘Posting Monday — but maybe in Latin.’
Hungry Doggerel February 17, 2011March 21, 2017 Roses are red Violets are bluish; I can’t tell a lie And say I am fluish. Orchids are white And last quite a while; Today’s post in time I just cannot file. I feel like a dope And a bit of a jerk But the idiot dog Ate all my work. Missing a day Fills me with sorrow; Nevertheless, Please come back tomorrow.