Gross and Buffett October 5, 2011March 25, 2017 BILL GROSS The smartest bond investor in the world, Bill Gross, seems to be on more or less the same page as the smartest equities investor in the world, Warren Buffett. Both are consummate capitalists, deeply appreciative of free markets, invisible hands and the rest, yet both must sound to the Koch Brothers and Rush Limbaugh like communists. They dare to suggest that the game has become too stacked in favor of the wealthy. Here’s Gross: . . . Even conservatives must acknowledge that return on capital investment, and the liquid stocks and bonds that mimic it, are ultimately dependent on returns to labor in the form of jobs and real wage gains. If Main Street is unemployed and undercompensated, capital can only travel so far down Prosperity Road . . . The United States in particular requires an enhanced safety net of benefits for the unemployed unless and until it can produce enough jobs to return to our prior economic model which suggested opportunity for all who were willing to grab for the brass ring – a ring that is now tarnished if not unavailable for the grasping. ☞ Why do so many Republicans look to Sarah Palin and Joe the Plumber for economic wisdom? Given the choice between entrusting their life savings to a fund run by Buffett and Gross or one run by Palin and the Plumber, would they really choose the latter? So why do they choose the latter when it comes to forming their economic world view? THE KOCHS Under the frame of “know thy adversary,” here’s a little background on the Koch brothers, who are reshaping your country in their favor. FUNDRAISING EXPENSES Chuck McLean: “You say, ‘Look at the nonprofits that spend 35% of your contribution on the cost of the fundraiser itself…’ One needs to be careful here. Special events are often a loss leader that charities use to acquire a donor whose next contribution will be obtained very efficiently. It is usually a mistake to judge the efficacy of a charity’s overall fundraising program based on one instance of it rather than taken as a whole.” ☞ That’s true. But a lot of nonprofit fundraising is expensive – direct mail, for starters. And when nonprofits categorize their expenses, an effort is often made (within reasonable legal limits) to characterize as much expense as possible as “education” rather than fundraising – communicating with donors to inform them on the issues and so on – which some might argue understates the true cost of fundraising. But let’s say a nonprofit’s cost of generating revenues is 10% or 20%. The government’s cost of “fundraising” – namely, running the IRS to collect the dough – is more like half a percent of the revenue collected. So however badly you may think they are spent, net of fundraising costs, 99.5% of your tax dollars are at least available to be spent, compared with just 90% or 80% of your non-profit sector contribution dollars. My point yesterday was that it’s a myth government is always less efficient than private enterprise or nonprofits. There are legitimate roles for all three; many good results from all three; and a need, in all three, to be continually rooting out as much waste, inefficiency, fraud, and incompetence as possible. FCSC They had a conference call yesterday to discuss the launch of Laviv, their skin product, and Guru reports: “At this point they have trained 40 doctors in LA, NY, San Diego. They will have a big presence at the American Society of Dermatological Surgeons, Nov 3-6, and there will be several publications by the end of the year. They have been featured in Vogue, Marie Claire, and Allure. The received the Allure ‘product of the year’ award. They expect the final price to be between $2000 and $3000 per course of therapy, but they are currently offering a discount to encourage use. They are look to have ‘lifetime’ customers, who will bank their own skin cells and use them multiple times for various conditions. They expect to start their second acne trial in the reasonable near future and would be addressing a potential $5 billion market. They are also launching this product in China in 2012. The product potential is large, multiple indications, multiple markets. However, they are setting expectations low and not giving specific guidance. The key is to make sure that the initial doctors and patients are satisfied with the process (as we would expect from the Phase III trials), rather than maximizing the number of patients who use the product in the first year. The long term potential could be enormous.” ☞ Or not – I think if I’ve proved anything to you over the years it’s that you should only make speculations like this with money you can truly afford to lose, because you may. But those of us who bought at $1, here (and watched it touch $1.60 briefly), or at .71 cents, here, may still want to hold on as it bounces around the half dollar mark. I plan to, tough only with (all together now) money I can truly afford to lose. SMBC Aristides’ Chris Brown: “If one likes GLDD, which averages about 7% return on equity, at 12.5x earnings, as noted yesterday, then he should love SMBC, which averages at least 12% return on equity, and trades at just 8 times earnings. That’s a lot better value. Small community banks with high credit quality are not going away. They may get a lot stronger given how many large banks have robosigned, filled up their balance sheets with bad assets, and are now angering customers with more stupid fees. Having said all that, I should mention that the company has only 6.5% tangible common equity to assets (largely as a result of a terrific FDIC-assisted deal they did), and they probably want to get that up to close to 8% over time, so they have made an SEC filing to raise capital at some point. I doubt management will allow the company to sell stock below $20, but it’s always a possibility. Management is very invested in the company, and is smart. So if they do raise capital at low prices, it will be out of conservatism on their part. If they do have a secondary offering, I expect it to be very popular, and for the stock to do well afterwards. If they don’t do a secondary, it will not take them long to earn their way up to 8% tangible common equity – just two years. After that, unless a bank with nearby geography presents a good opportunity to acquire it at a good price, the next logical step would be a dividend hike.” ☞ Full disclosure: I own SMBC both through Aristides and on my own.
Bathtubs October 4, 2011March 25, 2017 Rough day in the market. And while more rough days may lie ahead, what Warren Buffett counseled Friday, as related yesterday, was not to let the turmoil lead you to sell in panic if the underlying asset you own is sound. For example – and this is my example, not his – our dredging company, GLDD, announced $180 million in new orders yesterday. And the stock fell a little along with the rest of the market. GLDD sells at about 12.5 times earnings, which means that if it were a savings account, you’d be paying $12.50 for each dollar of interest – an 8% yield, which is pretty good these days. Only a quarter of the earnings are paid out in cash dividends, with the rest reinvested, but that’s not necessarily a bad thing. Over time, earnings might grow – both to keep pace with inflation (what savings account does that?) and perhaps even in real terms. The dividend might even rise over time. Is there risk in a stock like this? Certainly. For starters, if enough people want to sell it and no one wants to buy it, the price at which it changes hands could drop virtually to zero. But you’ll still own what you did before: a share in a solid dredging company. And as the stock price dropped, it’s little 8-cent dividend, currently just 2% of the share price, would come to represent an ever higher return on the share price. So why would it drop virtually to zero? There’s the risk our waterways will somehow stop needing to be dredged or that our beaches will somehow stop needing to be nourished. Or that the government entities that tend to fund such projects will go broke. And as with any company, there’s the risk the company will be badly managed (which could lead to losses and the end of that little dividend). So don’t put all your money into GLDD. My point is simply that the sun will come out tomorrow, silt will continue to be deposited in waterways upon which commerce depends, and people owning beachfront homes and businesses will likely spend whatever it takes to maintain their beaches. So, with any luck, ‘this too shall pass.’ Same with our speculative drug stocks. (Or our ridiculous Borealis, which seems to be getting ever closer to actually, possibly, conceivably, making a motor airlines will lease.) It’s possible the government will start negotiating drug prices, and be so heavy-handed that even if our little speculations DO prove to have effective new drugs, they will earn disappointing profits. Then again, people are likely to continue getting sick and continue to want to pay whatever they have to to get well – and nothing about what’s going on in Europe and in the financial markets is likely to affect that. So if you haven’t had ‘money you could truly afford to lose,’ you should feel great – you didn’t lose a dime yesterday! And if you do own some speculations – or even something pretty solid like GLDD – the fact that your shares have gotten hammered is not in and of itself a reason to sell them. SOLYNDRA AGAIN As reported here by the New York Times, emails show serious misgivings within the Administration about the Solyndra loan guarantee – though no undue influence by campaign contributors. Here’s the thing: businesses make poor judgments, venture capitalists make poor judgments, nonprofits make poor judgments, investors make poor judgments, and yes, government bureaucrats make poor judgments. No all the time, but all too frequently. Look at New Coke. Look at the Edsel. Look at IBM giving Microsoft ownership of its PC operating system. Look at Boeing three years late with the 787. Look at Enron. Look at Lehman Brothers or much of the rest of Wall Street. Look at the myriad of high-priced acquisitions that bomb. Look at our entire auto industry that, for lack of foresight, ceded the lead in energy efficient technologies to the Japanese. Where fraud is involved, there should be investigations, prosecutions, and incarcerations. Where incompetence or negligence are involved, there should be dismissals. But no one would suggest we try to shrink private enterprise to the point it can be drowned in a bathtub. Look at the nonprofits that spend 35% of your contribution on the cost of the fundraiser itself (the dinner, the invitations, the flowers, the sound system, the party planner) and then a chunk of the remaining 65% on administrative salaries and overhead and then whatever is left on well-intentioned projects that may produce negligible results. Where fraud is involved, there should be investigations, prosecutions, and incarcerations. Where incompetence or negligence are involved, there should be dismissals. But no one would suggest we try to shrink the nonprofit world to the point it can be drowned in a bathtub. (And few would suggest we ban fundraising dinners or revoke the government subsidies that nonprofits enjoy via their exemption from sales tax and the deductibility of contributions.) And, yes, look at the phenomenal waste incurred invading Iraq unnecessarily (for starters) and toppling Sadam Hussein in perhaps the most expensive way imaginable (Qaddafi was removed in Libya for perhaps a trillion dollars less, and Al-Awlaki for less still). Look at the billions upon billions of unaccounted for cash. And at enormous expenditures on weapons systems the military doesn’t even want. And $16 muffins (even if they turn out to be $14.73-a-head per diems for all refreshments at a conference). And bridges to nowhere. And people scamming Medicare and Medicaid – as, in the private sector, they scam private insurers with staged accidents, phony whiplash claims, and arson. Where fraud is involved, there should be investigations, prosecutions, and incarcerations. Where incompetence or negligence are involved, there should be dismissals. But here it’s different: millions do believe that government itself is the problem. They seize on anything it screws up to make the case. They say they would like to see it shrunk to the point it can be drowned in a bathtub. Why have millions come to this view? In part at least it’s because billionaires who want to pay less tax and be free of safety and environmental regulations . . . free of paying a minimum wage . . . free of having to disclose the ingredients in their products or restrained in their deceptive lending practices . . . have funded a decades-long campaign to persuade them of it. It is entirely their right to fund these campaigns to try to lower their taxes and operate free from regulation. And only an idiot fails to appreciate that taxes and regulation, if too extreme, can be counterproductive. But were not the Clinton years (to take a recent real-world example) superior to the Bush years that preceded or followed? Even, emphatically, for the rich, but also – importantly – for everyone else? Despite the Clinton tax hikes, minimum wage hikes, and regulation? Is it really a mistake to try to compete with the Chinese, who are dumping $30 billion of taxpayer money, into subsidizing alternative energy technology? Was it a mistake to fund DARPA, which gave us the Internet? To fund NASA, which produced so many spin-off technologies? To fund the GI Bill or, now, Pell grants? Why are our opponents so sure it was a mistake to hire a Nobel Prize winning physicist to lead the energy department and to help encourage private ventures – even knowing that many of them would fail? Why would they prefer a pick like George W. Bush’s first Energy Secretary who, as a Senator, had voted to abolish the Energy Department? And that gets to what I think is the bottom line. The ‘solution’ to inefficiencies and disappointments in government, in business, and in the nonprofit world is NOT to try to shrink any one of them to the point that it can be drowned in a bathtub. The solution is continually to try to attract the best people and encourage them to make their best efforts to do a great job. Not just by paying a fortune to the guy who presided over the launch of New Coke, or by paying the guy who brought Merrill Lynch to its knees a $160 million severance package – though certainly our captains of industry work hard and should be paid well (although I would argue, not that well). But also by valuing the work of everyone else, including well-intentioned public servants, even though they will not do everything perfectly, either. In the case of Solyndra, our public servants made a bad bet, just as venture capitalists and mutual fund managers do every day. Just as you and I will have done if Borealis never does get those damn planes running around the tarmac like golf carts. If the government was defrauded by Solyndra, the fraud should be prosecuted. But note that this would be fraud on the part of the private sector. I would argue that would be no reason to shrink the private sector or the government to the size either can be drowned in a bathtub. And no reason to give billionaires the lowest tax rates in modern history when we are running a huge deficit. Or to delay repairing our infrastructure and investing in our future. Or to eliminate the agency tasked with protecting our environment. And yet that is what the billionaires hope they can use the Solyndra failure to help engineer: a Republican takeover of the White House and Congress, which in turn would likely give them a 25-year lock on the Supreme Court, which would lead to more decisions like Bush v. Gore and Citizens United, which would make it easier to tilt the election process further in the favor of the billionaires by (for example) upholding election laws designed to make it harder for poor people and young people to vote . . . and tighter and tighter gets the vise. This bathtub, by the way, is the colorful image coined by Grover Norquist (whom I met once when he endorsed the tort reform plan I put on the California ballot). ‘I don’t want to abolish government,’ he famously quipped; ‘I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.’ It’s an extreme, short-sighted vision, and one all but a few Republicans in the House and Senate have signed onto.
A Few Minutes With . . . October 3, 2011March 25, 2017 THIS CHART SAYS IT ALL Take a second to click here and five seconds to absorb it. It won’t take longer. (Thanks, James.) ROW, ROW . . . Susie Slanina: “It was just announced that Roz will make landfall at approximately 10:00 a.m. Pacific Time after rowing across the Indian Ocean. It took 153 days. I hope there will be good media coverage. If you can, please let your readers know!” ☞ This is her third ocean, if she makes it. She rows solo. Can you imagine? Almost as jaw-dropping as the ropeless cliff climbing you may have seen on “60 Minutes” last night. A FEW MINUTES WITH WARREN BUFFETT Speaking of “60 Minutes,” Andy Rooney seemed sharp as ever as he bid us adieu last night, at 92. Warren Buffett is a youthful 81, so let’s hope he’s just getting warmed up. At a dinner Friday he said he foresees no recession (65 of his 70 businesses are doing well – only his housing-related businesses are dead in the water); he foresees no deflation (we’ll print as much money as we need to to avoid it); inflation will spike at some point, but who knows whether that’s two years out or five. The housing market will firm when – forming 1.2 million new households a year but building just 500,000 new homes – we eventually sop up the excess supply. That process may be fairly far along. With prices down and such low mortgage rates, it’s a good time to buy a home. Europe will ultimately sort itself out and, however painful it may be short-term, Europeans will be living better in 10 years than now. He doesn’t expect the blowback from any European crisis to cause us another Lehman Brothers type crisis here. He’s been buying equities – including his own stock, which he believes is undervalued.* In his lifetime, astonishingly, real per capita income has grown six-fold – compared to most centuries of human history when there was no material progress at all. The American economy is unbelievably resilient (so don’t panic with each scary event). If we want to maximize our chances, we should help reelect the President and give him a Democratic Congress to work with – which is why the evening was a fundraiser and why Warren, perhaps history’s wisest and most successful capitalist, was headlining it. *BRKA dropped $2,400 Friday; you might prefer the B shares, which represent one-fifteen-hundredth of an A share.
Leading The World Watch September 30, 2011March 25, 2017 RECESSION: IT’S A CHOICE Economists conclude we’ll slip back into recession if we fail to pass the American Jobs Act – or avoid that if we do. Bloomberg reports the story here: . . . A reduction in government spending, the end of the payroll-tax holiday and an expiration of extended unemployment benefits would cut GDP by 1.7 percent in 2012, according to JPMorgan Chase & Co. chief U.S. economist Michael Feroli in New York. Instead, the Obama proposal makes up for that potential loss and may add a net 0.1 percent to the economy, he estimates. . . . . . . In the Bloomberg survey, Goldman Sachs Group Inc. estimated the plan would add 1.5 percent to the economy, while Macroeconomic Advisers LLC said 1.3 percent and UniCredit Research, up to 2 percent. . . . ☞ Hard to imagine why we’d prefer another recession – or why we wouldn’t want to fix bridges and modernize dilapidated schools. It seems to me that, whatever our political affiliation, we should be furious with any senator or member of Congress, of whatever party, who stands in the way. THE PRESIDENT AT THE UN Want to feel really good about America and her leadership? Find some quiet time right now, or this weekend, to watch the President’s speech to the UN. It is us at our best.
“Doh!” September 29, 2011March 25, 2017 RECYCLING YOUR ENERGY You consume calories to power your 100-odd-pound self around the mall. And all that energy is currently lost. What if each footfall pumped a tile that recycled some of that lost energy? There’s a company making such tiles right now. Here’s the story. Obviously, only a small piece of our energy puzzle, if it can be brought to scale at all – but I love it. THE TOP BRACKET OVER TIME Peter S: “Take a look at this table. What it shows is that Republicans dropped the top tax rate from 73% down to 25% and the Great Depression followed. And it shows that the top rate was above 80% through the Golden Age of America that Conservatives always want to go back to, the 1940s and 1950s. Kennedy lowered it to around 70% (took effect in 1964) where it stayed until Reagan lowered it to 50% from 1982-86. At the end of his administration, Reagan lowered it to 28% and George Bush Sr. had to raise it to 31% to combat deficits as far as the eye could see. Bill Clinton raised the top rate to 39.6% which was still far lower than in 7 of the 8 years of the Reagan administration – and we had the greatest economy in world history with 22 million jobs created. George W. Bush lowered it to 35% – and the rate on dividends and capital gains to 15% – and created zero net new jobs and added $4 trillion in debt. President Obama wants to raise it back to Clinton’s 39.6% and Chris Christie says that’s dividing the country and just election year politics. According to my reading of this table, it’s just intelligent economics. Doh!” CANARD A L’ORANGE Toby: “Why use a word like ‘canard,’ as you did yesterday, when there is a simpler, better understood one available: LIE. They are liars and they should be called as such! And the people they are lying to will have an easier time understanding what you have to say, and thus be more likely to listen. Ten to one you’ll never hear the word ‘canard’ on Fox!” Happy birthday, Scooter, Jane, Darrique, Jaap . . .
White Male Property-Owners September 28, 2011March 25, 2017 The discussion about whether Roy Herron’s 94-year-old mother should be allowed to vote as she always has, described Monday, prompts this question: IN AMERICA, SHOULD POOR PEOPLE EVEN BE ALLOWED TO VOTE? Not a question you might expect in 2011, but a question some on the right have been asking. Click here for a remarkable overview . . . and for further links to articles like the one entitled, “Registering the Poor to Vote is Un-American.” Hence the successful Republican drive to shut down ACORN* . . . to raise new barriers to voter registration . . . and, as with Mrs. Herron, to raise new barriers to voting itself. After all, if too many poor people vote, you can wind up with people like Bill Clinton, who raised taxes on the job creators. True, under his stewardship, 23 million new jobs were created, the rich got richer, NAFTA was signed, welfare-to-work was launched, and the budget got balanced. But Clinton may just have been a fluke. He may not be the kind of candidate hordes of poor people would normally elect. They might elect someone like Barack Obama, who would want to put construction workers back to work rebuilding our infrastructure and teachers back to work educating our kids, break the log jam in the patent office and push through 16 tax cuts for small businesses. Radical stuff. Our Republican friends who are working so hard to make it harder for poor people to vote may not long for the days when only “white males with property” were allowed to vote. But they certainly remember Ronald Reagan fondly. (He raised payroll taxes on the middle class even as he slashed taxes on the rich.) And they believe the rich are “job creators” who must not be over-taxed – even though, after Bush slashed the tax rate on dividends and long-term capital gains to 15% (it was 28% under Reagan), jobs were not created. It is a complete canard to claim people won’t start businesses if tax rates are what they were under Eisenhower or Nixon or Ford or Reagan – they started loads of them. And it is a complete canard to say that a small business (or a large one) will not hire workers it needs to make more profit if they know that profit will be taxed at one rate versus another. Or that they will hire workers they don’t need if taxes on their profits are lower. So I say: Let even poor people vote. And if they should wind up electing another Clinton or Obama again, and if the wealthy do have to pay tax at no lower rates than their secretaries – as was the case under Ronald Reagan – never fear: it will be good for the country. Even, ultimately, for the rich. *Too late, ACORN was completely vindicated.
Muffins Matter September 27, 2011March 25, 2017 THE $16 MUFFIN MYTH They say climate change is a myth – that 7 billion people spewing pollutants into the atmosphere couldn’t possibly have an effect on the atmosphere. We say the $16 muffin is a myth. There are two differences here. First, what they deny is really important. Second, they’re wrong. The $16 muffin is a myth. The Department of Justice held a conference and spent $14.74 per day per attendee on food and beverages. Whoopdedoo. And Gore never said he invented the Internet, did not exaggerate his and Tipper’s inclusion in Love Story, did nothing wrong at the Buddhist temple – and yet, from these muffin-like allegations, sprang the Bush presidency, the Iraq War, and our wrecked economy. Muffins matter. JUSTICE KAGAN I loved this profile of Supreme Court Justice Elena Kagan. It even made me feel (a little) better about Justice Roberts. Those of us who supported President Obama tend to take all the good things for granted – and there are tons of them – but it’s worth noting that this is one of them. BULLYING 94-YEAR OLD WOMEN James Hickel: “It seems that the state of Tennessee actually makes it very easy and convenient for elderly voters like State Senator Herron’s mother to vote. They can vote absentee, from the comfort of their own homes, without bothering to get a government-issued photo ID. So what exactly is Herron complaining about? The new law requiring a government-issued photo ID to vote applies only to those voting at polling places. It does not apply to those casting absentee ballots under state law, including those age 65 or older who wish to vote absentee or those voting at licensed nursing homes.” Roy Herron: “Yes: If you act soon enough, if you jump correctly through absentee hoops, and if you are 65, then voting absentee is an option. If, however, you’re not 65, but one of the hundreds of thousands without photo ID, or don’t get weeks ahead of the curve, or don’t do the paperwork right, you are outta luck. As I said in the essay, we’ll take care of Mom. But thousands and thousands of others will not be permitted to vote.” SIX DEGREES OF JOHN TYLER Robert Merrill: “My great uncle was Lion Gardiner Mason so the similarity of the name Lyon Gardiner Tyler (linked from your column yesterday) prompted some research on my part. Turns out Lyon and Harrison would be third cousins with my great uncle. (I think I have that right: my Lion’s great-grandfather Nathaniel Gardiner was brother to Lyon and Harrison’s great-grandfather Daniel who fathered their grandmother Julia Gardiner Tyler, wife of John Tyler). So I guess I’m third cousin twice removed to those guys. I would say small world but given John Tyler’s progeny [15 children], half your readership may be distant cousins to him.” SOLYNDRA As reported here, the FBI is on the case. If there was fraud, it should be prosecuted. Still, the overall notion remains unchanged: We’re wise to seed investment in cutting-edge technologies – as China has done to the tune of $30 billion in solar. It’s in the national interest. Not all our efforts will succeed. We’d be fools not to try. The New York Times nails it: The United States, which three years ago led the world in investments in clean energy, has now fallen behind China and Germany, which provide far more generous subsidies. The failure of a single company — and anyone who knows anything about transformative technologies knows there will be failures — is no reason to stop our efforts to catch up. . . . It is also important to note where some of the loudest criticism is coming from: House Republicans who want to undermine the president, belittle global warming and discredit clean fuels. Their agenda was on full display Thursday at a hearing led by Darrell Issa called “How Obama’s Green Energy Agenda Is Killing Jobs.” The truth of the matter is that when judged by its diverse portfolio, the loan program appears, at least so far, to have performed well. The Solyndra investment represents less than 2 percent of nearly $40 billion in loan guarantees for about three dozen innovative projects. Some of them — advanced automobile battery projects, for instance — have provided thousands of much-needed jobs in Michigan and other recession-battered states. . . . Mr. Issa to the contrary, jobs in the solar industry have doubled to roughly 100,000 since 2003. Recent studies suggest that, globally, renewable energy will grow faster than any other energy source in the coming decades. The surest way to guarantee that America gets its fair share of that business and those jobs would be to enact a comprehensive energy strategy that raises the price of older, dirtier fuels. Failing that, continued government support is absolutely essential.
Bullying 94-Year-Old Women That's Really What This Is September 26, 2011March 25, 2017 AN EXPERIMENT How young is America? If you’re 12, you think it’s been here forever. But if you were born in 1790 as President John Tyler was – just a year after our Constitution was ratified – your grandsons could be alive today. Two of his, Lyon and Harrison, in fact are. (Thanks for this, Andrea.) We’re still just an experiment. AND LOOK HOW WE’RE MUCKING IT UP We’re letting our infrastructure crumble, we’re inflicting unnecessary wounds (that debt ceiling thing? that invasion of Iraq? those tax breaks for the rich who were doing fine as it was and created no jobs in return?) – and we’re now trying to go backwards on suffrage. Where for a couple of centuries the push was to expand the vote from the original “white males with property,” now the push is to make it harder for young people and poor people – which is to say, Democrats – to vote. Here’s my friend Tennessee State Senator Roy Herron writing in the Memphis Commercial Appeal: When my 94-year-old mother was born, women were not allowed to vote. But then Tennessee ratified the 19th Amendment, and for seven decades Mother has voted faithfully. This year, my Republican colleagues in the legislature took away that right when they made it harder for her — and as many as 675,000 other Tennesseans — to continue to vote. Ironically, legislators from the party that supposedly favors less government and more privacy passed a law requiring my mother to obtain a “big-government” photo identity card in order to vote. When the law goes into effect with the March 2012 presidential primary elections, poll workers will no longer accept her voter registration card as sufficient proof of identity. Mother has not driven in at least two decades, so she has no driver’s license. But when she is pushed in her wheelchair to the polls, not one election worker will mistake her for another 94-year-old trying to cast a felonious, fraudulent vote. My mother is one of 675,337 Tennesseans age 18 and older who, according to the Department of Safety, either have no driver’s license or have a license that does not carry their photo. These citizens may be registered to vote, but unless they obtain a photo ID from a driver’s license station or can produce another type of government-issued photo ID that the new law accepts (such as a military ID or a passport), they will not be allowed to vote. This new requirement creates several problems. First, one cannot get a government ID card from the state Department of Safety without producing a “primary proof of identity,” most commonly a birth certificate. Not surprisingly, my mother’s 1916 birth certificate has been misplaced. So she and thousands of other registered voters like her will have to get new birth certificates, which is where the next problem arises. To apply for a birth certificate, my mother must either travel to the state Department of Health’s Office of Vital Records in Nashville, submit her request online or telephone the office. Traveling nearly halfway across the state is not feasible for many elderly, disabled, mobility-challenged, poor or employed Tennesseans. My mother and thousands of other Tennesseans are not computer literate, so they cannot order a birth certificate online. I recently asked Nashville attorney Annie Prescott to navigate the third option — a phone call to the Office of Vital Records. She spent the better part of an hour on the phone trying to speak to a live person. Over 15 menu options offered by a series of recorded messages led to three busy signals and four hang-ups. Finally, Prescott got a real person on the phone, who instructed her to call another number. That number was for a company that charges an additional $15 to process the $15 request. And unless you pay another $5 to expedite service, you must then wait weeks to receive the birth certificate. So the total cost of what is supposed to be a free state-issued photo ID card so far is $35, not counting the long-distance charges for the phone call, the cost of one’s time or the frustration of the process. And applicants still have to take the birth certificate to a driver’s license testing station, where they may have to wait in line for hours. Only 43 of Tennessee’s 95 counties have driver’s license centers. Half the counties in West Tennessee, and two-thirds of the counties in my state Senate district, don’t have them. Some of the rural Tennesseans I represent will have to drive from their county through a second county and into a third to reach the closest driver’s license center — a trip of 40 to 60 miles each way. Taking a day off work and with gas averaging $3.58 a gallon, even at minimum wage the expense of travel and lost wages will cost people perhaps an additional $80 to $100 to exercise their constitutional right to vote. This cost of this process — in many cases totaling $110 to $135, if not more — is such a burden that for many voters it will amount to disenfranchisement. My Republican colleagues claim this legislation is necessary to prevent voter fraud, citing a state Senate election in Memphis in 2005 in which votes were recorded from two deceased people. But the fact is that the culprits in that case were dishonest election workers, not voters. Photo ID cards would not solve that problem. My mother has children who live in West Tennessee, and we’ll do what has to be done to ensure she can continue to vote. But what about the other mothers and fathers, the blind, the hearing-impaired, the disabled, the elderly, the poor and the working people who already struggle to pay their bills, much less these new “poll taxes” of $100 or more to meet the requirements of the photo ID law? This law is simply the latest in a long chain of outrageous actions designed to keep those who don’t look or think like the controlling politicians from voting. People have died trying to register to vote. Now even those who are registered may still be denied the right to vote. State Sen. Roy Herron of Dresden represents Benton, Decatur, Henry, Henderson, Lake, Obion, Perry, Stewart, and Weakley counties. ☞ And that, ladies and gentlemen, is the patriotic face of today’s Republican Party, as financed by billionaires determined not to pay taxes at the rate they were paying under Ronald Reagan, certain that they are the victims in all this, and that the rest of us are getting a free ride. ELIZABETH WARREN You must take two minutes to watch this clip. If you’re a moderate or progressive, I’m almost certain you will want to send it on to any Republican you know. And it’s why – personable as he is – the good people of Massachusetts are going to dump Scott Brown next year for Elizabeth Warren.
Just Do It September 23, 2011March 25, 2017 I inherited the happy gene but I’d be happier still if we would just stop – and by “we,” I mean the Republicans – inflicting needless harm on ourselves. We didn’t have to squander the huge looming surplus President Clinton left President Bush and his Republican Congress. We didn’t have to invade Iraq. We didn’t have to manufacture this summer’s debt ceiling crisis. And we don’t have to sit paralyzed as our bridges and schools crumble while so many people eager to fix them are out of work. Even though much of this week’s stock market action is related to Europe’s dire straits, I think the market would respond with enthusiasm if we passed the American Jobs Act – now, right away – and got to work. What ARE we waiting for? And if we did start moving, and grabbed control of our future, it would give markets around the world more confidence as well. ROMNEY ON THE JOBS ACT He’s against it, of course – except, as you’ll see in this quick video, the main things in it. When he was advocating those things, he could say with authority that they made sense. Now that the President has proposed them, they apparently don’t. Economists say passage of the Act will add 1.3% to 2% to what the GDP otherwise would have been. We need to pass this bill right away. We need to put people back to work right away. And all that stands in the way of doing so is the Republican Party. SOLYNDRA Meanwhile, Media Matters notes that the Wall Street Journal ranked Solyndra the Top Clean-Tech company in the country. Going on to say . . . A year and a half later, Solyndra has gone bankrupt due to changing market conditions and stiff competition, and the GOP is using that fact to attack clean energy investments. Now the Journal is suggesting that the Department of Energy, by betting on a company that the Journal itself called the #1 clean tech company in the U.S., gave Solyndra a loan guarantee because it did “not understand” the solar industry and engaged in “political favoritism.” ☞ There is so much wrong with the right’s attacks on the Solyndra loan, as there is with the right’s attacks on the American Jobs Act. Click here if you missed the “5 lies” about Solyndra. And here if you lacked the time yesterday to “attend” a fascinating Clinton Global Initiative session featuring the CEO of Solazyme – someday, the gas in your tank or the oil on your arugula may come from their algae – and the Deputy Assistant Secretary of the Navy. Both were emphatic with regard to Solyndra that we must have a tolerance for risk-taking – which means lots of failures – if we want to succeed. As any venture capitalist will tell you, not every risk pays off. That’s no reason to stop taking them. (The session moderator, Van Jones, notes cheerfully that we are, after all, Americans, not American’ts.) PERRY From the Borowitz Report: Canada to Build Twenty-foot Fence if Perry Elected Could Be Electrified, Border Officials Warn THE BRIDGE TO SOMEWHERE The President spoke yesterday at a heavily trafficked bridge – declared “functionally obsolete” – that connects House Speaker Boehner’s home state of Ohio with Senate Minority Leader McConnell’s home state of Kentucky. He wants to put people to work fixing the bridge. The Republican response was to dismiss the speech as a stunt. Yet no one disputes that the bridge is obsolete, or that there are tens of thousands of others around the country like it, or that there are thousands of unemployed construction workers in Ohio and Kentucky. What ARE we waiting for? EUROPE’S DIRE STRAITS Since Germany seems to be the only one that can save the day, my guess is that she will. But there’s real risk she won’t, with significant consequences worldwide. The financial system is interconnected. There’s good cause to be nervous. SIGA The company got a bad legal ruling yesterday and the stock plunged, as explained here. Having seemingly unlimited amounts of money I can truly afford to lose (I don’t eat much), I doubled up. Thirty-one days from now, once the wash-sale period is up, I may sell the original shares for a tax loss; although if tax-selling drives it down further I might buy more first. The risk reward here seems to be good. In a year or two, even if the ruling is not reversed on appeal, the stock could be significantly higher. But as always: only with money you can truly afford to lose. FCSC Chris Hanacek: “Does guru have any sense on the time horizon for the uptake of their Fibrocell process?” “It’s difficult to gauge,” writes Guru. “This product was launched in the UK about 10 years ago and the then management team pushed very aggressively on sales, so much so that the product ended up being misapplied, patients sued the company, and the product was eventually pulled from the market. The product when correctly applied produces excellent results – it is your own skin! However, the current management is taking time to train doctors on the correct application process. The training is simple – one day. Still, it takes some time to go around the country and train the doctors. Then uptake depends on patient interest. Even when a patient decides to purchase the product, it takes a couple of months to grow enough skin to inject back into the patient. “The market for products to address facial scars and wrinkles is large. Allergan’s Juvederm did $88 million in the most recent quarter, annualizing at more than $350 million. Medicis’ competing product, Restylane, is on track according to Deutsche Bank to do more than $123 million this year. Thus, there is plenty of opportunity in the market for FCSC (valued at about $50 million recently for the whole company). Management, however, has not been willing to provide specific guidance at the moment and is remaining appropriately conservative until they can gauge the commercial interest themselves. Juvederm and Restylane fade after a few months, so if you use those, you must go back to the doctor to get regular re-injections. FCSC provides your own skin, which regrows and remains in place. Long term a much better outcome. “The acne indication is not on the label yet, but there, the product competes with lasers, which of course, do not regrow skin, but merely try to flatten the areas surrounding the acne. The company has completed one successful acne trial that has been published and is discussing with the FDA what would be required to get acne officially on the label. However, since the product is approved for wrinkles, a doctor is free to prescribe it for acne if the doctor chooses and I would expect that patients that can afford laser treatment would look very seriously at this therapy instead. I certainly would.”
Wakawaka September 22, 2011March 25, 2017 SPEAKING TO THE UNITED NATIONS The President’s annual address, in very small part . . . . . . [S]o this has been a remarkable year. The Qaddafi regime is over. Gbagbo, Ben Ali, Mubarak are no longer in power. Osama bin Laden is gone, and the idea that change could only come through violence has been buried with him. Something is happening in our world. The way things have been is not the way that they will be. The humiliating grip of corruption and tyranny is being pried open. Dictators are on notice. Technology is putting power into the hands of the people. The youth are delivering a powerful rebuke to dictatorship, and rejecting the lie that some races, some peoples, some religions, some ethnicities do not desire democracy. The promise written down on paper – “all human beings are born free and equal in dignity and rights” – is closer at hand. . . .” ☞ Watch. ALGAE TO OLIVE OIL / AND SOLYNDRA The Clinton Global Initiative is in session this week. Consider “attending” this session. It begins with three “commitments” CGI members have made – check out the wakawaka light – but is then a discussion that fills this layman with hope: new technology for a better world, and a Navy and Marine Corps acting smartly to nurture innovation. Of particular note are the panelists’ take on Solyndra. Essentially: “Failure is the mother of innovation.” If we have no tolerance for failure, we’ll never succeed. (Not mentioned by the panel, but, for the record, Solyndra was conceived and moved through the approval process mostly under the Bush Administration.) ITMN Guru: “Today after the close the New England Journal published a phase 2 study of a new agent for the same disease as ITMN. The data appear superior and more compelling. ITMN has a drug that appears to be a weaker version of what was published today. The competitor will still need to do a phase 3, so it couldn’t be on the market for 3 to 4 years. ITMN will be the only game in town in Europe and will generate significant sales. After that it depends on the data. However today’s product looks impressive. And other companies will try similar drugs. Sure wish I could have anticipated the announcement.” ☞ Not what we had hoped. I plan to exit.