Why It Is NOT Equivalent October 14, 2013 BREAKING BAD My plan was to watch the pilot and then, after a snack, skip straight to the series finale. So I did. I watched the pilot, and . . . well, you can guess the rest. I’m up to Season 2, Episode 6. Chromecasting via Netflix from my iPhone to my TV. See you in a week or two. BREAKING AMERICA Everyone wants the government re-opened and the debt ceiling raised. Democrats — asking for nothing — have been ready to do both. Republicans ARE asking for things — such as that we accept their draconian budget. Which we did. But they want more. We want stuff, too, like a vote on the immigration bill. But as important as that is to millions of people and to the success of our economy, we aren’t threatening default in order to blackmail Republicans into giving it to us. We want to repair our national infrastructure — it makes us crazy that we allow so many construction workers to remain unemployed when there’s so much crucial work to do. But we’re not threatening to blow up the world economy if the Republicans don’t stop blocking the American Jobs Act. This is nuts! Everyone wants the government re-opened and the debt ceiling raised* and all that’s required is . . . to do it. Just put it to a vote, let a majority vote in favor, and the crisis is over. If only deflecting asteroids or halting climate change or curing Alzheimer’s were so easy. All we have to do in this case is . . . do it. And as always, I remind you: the National Debt has stopped growing — relative to the economy as a whole, which is all that matters — and if we don’t needlessly tank the recovery, it will soon begin to shrink relative to the economy as a whole, as it did for 35 years after World War II . . . until Ronald Reagan and the Bushes sent it galloping back up. (Clinton was able to get it shrinking again, as Obama is now poised to do as well; but aircraft carriers take time to turn round.) *Actually, the debt ceiling should be eliminated altogether, as it would be unConstitutional for us NOT to pay our bills: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” — Section 4 of the Fourteenth Amendment WHY IT’S NOT “EQUIVALENT” A lot of my business school friends — who tend to be moderate Republicans or libertarians — say “a pox on both their houses.” Both parties, they think, have gone off the deep end, and are equally to blame for the disastrous polarization and dysfunction of Congress. But that’s actually not true. It sounds above-the-fray, magnanimous, and conciliatory . . . but, well, sorry to repeat myself, but this is important. It’s just not true. Here’s why: Part One: Quite a few moderate Republican incumbents have been ousted in primaries by uncompromising right wingers. The equivalent is not true on the left. We haven’t been kicking our moderates out for not being liberal enough. I’m doubtless forgetting some exception; but for the most part, it just hasn’t happened. Part Two: A great many Republican incumbents, while they have not yet been ousted, are afraid they will be, so have become far less likely to compromise. Again, the equivalent is simply not true on the Democratic side. Very few if any Democratic senators or representatives live in fear of being “primaried.” That could change; but it may not — because: Part Three: There is a reason for all this. There are billionaire right wingers like the Koch brothers and others who stand ready to fund these primary battles — which, win or lose, really get the attention of any remaining Republican moderates. The equivalent is simply not true on the Democratic side. Yes, we have our billionaires. But few if any are “far left” in their policy positions — no Karl Marx D’s to balance the Ayn Randian R’s — and any who may be closet commies have not used their muscle to oust moderate Democrats. In short, the constituency hurt by raising taxes on the rich has billions of dollars — and, if I may speculate without having seen the actual lab results, an impressively high level of testosterone — while the constituency hurt when, say, the minimum wage is held below the rate of inflation has not a dime to spare. Gerrymandering has made it impossible for moderate, centrist Republicans to win primaries because primary elections tend to be dominated by the most passionate, extreme folks. Gerrymandering isn’t a great idea on the left, either — but whether for lack of equivalent funding or lack of equivalent anger — or lack of equivalent misinformation** — the effect has been far more profound in moving the Republican Congressional caucus to the intransigent right than in moving the Democratic caucus to the left. To date, anyway, the effect of gerrymandering has simply not been equivalent.*** **I would argue that, while opinionated, Jon Stewart and Rachel Maddow, et al, are far more respectful of the facts, and the science, and the logic, than the Limbaugh’s and Fox News. They would of course disagree, as the respected scientists of the Tobacco Institute so manfully did for decades, and as the climate deniers and birthers and others now do. ***And as a moderate Democrat, I wouldn’t want it to be. For me, one or two clicks left of center is the place to be. I outgrew my Marxian phase freshman year in college. When’s Paul Ryan going to outgrow his Randian phase?
This Is Obamacare October 11, 2013 ETRM First suggested in February at around 85 cents, ETRM closed at $1.55 yesterday after Cannacord Genuity raised its price target from $1.50 to $3. (“Given the relative safety of the device, moderate weight loss, and lack of alternatives for obese patients, we believe the likelihood of a positive panel result is high.”) Guru believes “there is a growing realization ‘the train is leaving the station’ — namely, that ETRM will get FDA approval.” He sees it going to $5 or more if the panel does approve their device. So hang in there — though only with money you can truly afford to lose. BOREF WheelTug signed Malaysia Airlines this week, its twelfth, adding 68 more planes to what is now a 641-plane order book. Seven of the twelve are “flag carriers.” Malaysia is a “five-star” airline — one of apparently just seven in the world. (American, Delta, and United are “three star.”) Also, like American, a member of the Oneworld Alliance. OBAMACARE I don’t know how healthcare.gov could have been so unprepared for October 1 — maybe that’s what happens when government puts too much faith in private sector contractors — but clearly it’s not been done right. That said — and assuming the worst of it doesn’t last more than another week or three — who cares? The big picture is not an embarrassing first-month launch, but that for the next 50 years almost everyone you know will have better health care security — even the tens of millions with already good coverage at work — and that over time we will have . . . a healthier citizenry . . . and a healthier economy . . . and a less unequal society. (That last because a good chunk of the improvements for the 99% are being paid for by investors with taxable income above $250,000. Their new rates are still lower than when Ronald Reagan left office, but, yes, higher than the rates George W. Bush bestowed upon them. This dings billionaires but lifts the working poor and middle class — and that makes things a little less spectacularly unequal.) Here’s one site that seems to be working: thisisobamacare.com. Check it out, including the info on your state, at the bottom. # I think we can all agree Obamacare is not perfect — many of us, presumably including the President himself, believe we should have a single-payer system like all the world’s other industrialized countries. But as opportunities for improvement are identified, we may, with time, find the political will to seize them. If not 100%, at least part way. For example: What a glorious day it will be if the government is ever allowed to negotiate with the drug companies over prices. It won’t happen this year; but in two or three? For another example: For any health insurance system to succeed, it’s important that young healthy people participate. In the private sector, they are simply compelled to: Group health insurance comes with their job. Obamacare, by contrast, allows them to opt out of the group — but only if they pay a $95 fine. So if it turns out that not enough healthy young people buy coverage, one obvious tweak to Obamacare will be to raise that fine to some number — perhaps $300 — where enough decide to opt in to make it work. Only time will tell what the number will be — if we’re lucky, $95 is high enough ; maybe it will have to be $450 — but as you raise the fine, you do two things: collect that much more revenue to fund the system; and increase the proportion of young healthy people who decide that, rather than pay a fine for nothing, they may as well pay more and get coverage. And don’t tell me it’s outrageous to tax people for something they may not want or need: we do it all the time. We tax antiwar demonstrators to pay for wars they hate; we tax childless people to pay for schools. Taxes are the price we pay for a civilized society. A civilized society provides the dignity and security of affordable health care. Have a great weekend. Explore ThisIsObamacare.
Theater of the Absurd October 10, 2013 “It’s now more socially acceptable to be gay than to be a Congressman,” Barney Frank says these days — and it’s true! I am bursting with things to say about how nuts all this is, and then what happens? The company that hosts this website had three servers — including the one I apparently live on — spin out of control with “load balancing problems.” They boast 99.9% reliability — which I guess means being down one day every 1000 days — but the 18 hours or so they put me out of business yesterday pretty much exhausted their quota for the next three years. And it’s hardly the first time, as some of you have doubtless noticed. Happily, after repeated calls, they are contrite. They offer to bring my case up for an SOA review, whatever that is, and to credit me for the outage, which would amount to about $4. Don’t. Get. Me. Started. But of course this is a beyond trivial in the context of the immense harm Congress is doing to the country — and to real people, many of them our most vulnerable brothers and sisters and children — for absolutely no reason. All they have to do stop hurting the country is . . . stop hurting the country. If Obamacare is so bad, they should fix it or repeal it — but not this week, and not just to avoid the $95 penalty uninsured young people will have to pay if they choose not to buy coverage. Is that really worth hurting so many people? Retarding economic growth? Increasing the deficit? (The CBO says that repealing Obamacare would increase the deficit.) Jeopardizing the credit of the United States? Possibly even destabilizing the entire world economy? Well, no, many of the Republicans now say it doesn’t have to be concessions on Obamacare, it’s really about the terrible growth of the National Debt. Which should really henceforth be termed the Republican National Debt, as so much of it was racked up under Reagan, Bush, and Bush, while the parts racked up under Clinton and Obama should really not count because deficits are like aircraft carriers and take a while to stop. President Clinton stopped the growth of the debt in absolute dollars, by the time he handed it off to Bush — remember the issue of the debt clock running backwards? — and so has President Obama. Not yet in absolute dollar terms, but relative to the economy as a whole, which is the most important metric. The debt was growing at close to 15% a year when Bush handed Obama the $1.5 trillion 2009 deficit (for the fiscal year that began October 1, 2008) and is now growing at under 4%, about the same rate as the economy, between real growth and inflation . . . with further declines, if we don’t needlessly muck it up, in store. So why are we rushing to muck it up? To save the uninsured from a $95 penalty? Is that really what has the Koch brothers so upset? To restrain our national debt — which is now not growing relative to the economy as a whole? There is absolutely a grand bargain still to be made that would bend some of the entitlement formulae in “the out years” (with plenty of time to bend them back before they even take effect, as prosperity should allow us to do) and that would rationalize parts of the tax code (with modest increases on the uber-rich, most definitely including those 15%-bracket hedge fund managers) . . . not unlike what the President and the Speaker came so close to doing last time, before the Tea Party and Grover Norquist and Rush Limbaugh put their collective foot down . . . on the neck of the country . . . and kept it from happening. Our leaders from both parties should sit down and finally make that deal — with both sides giving in on some things, not just Democrats. But not this week. And not as the whale is about to sound. What — you don’t know about the whale? You don’t watch Rachel Maddow? Here it is, and even if you have little patience for hokey skits, hear her out. The metaphor builds and builds, and before it’s over, trust me, you will be all about that whale. THEATER NOTES I actually saw Moby Dick on Broadway 50 years ago. Long story. If you have only one night free in New York, it’s the afore-plugged Buyer and Cellar. Full disclosure: I have a stake in it. And then there’s A Time To Kill, in previews now and opening October 20, in which I have a smaller stake. I haven’t seen it but I’ve read the script. Riveting. And a zillion people read John Grisham’s novel. Do you know what’s bizarre about it? The role of the judge is played by . . . Fred Thompson. Who ran for President of the United States and now does commercials for reverse mortgages. Oh, my. But my point is that I just saw a small experimental production of Anthem, one of the Ayn rants, and it was good, in its way, but: people! It is a cartoon! Of course tyranny is tyranny. Of course individual freedom is sacred! And in 1937, or whenever, communism posed a real threat. This is what Ayn Rand grew up on, fled from, and railed against. Right on! But having to pay $95 if you choose not to contribute to the universal health care pool is not tyranny, it’s $95. Even Alan Greenspan, as noted here a few days ago — a close Ayn Rand disciple decades ago — acknowledges that to take her work too seriously and literally, as Paul Ryan and so many other Republicans now do, is just wrongheaded. It’s nuts. Have a nice a day. Watch Rachel and beware that whale.
Three Minutes With Elizabeth Warren October 8, 2013October 7, 2013 THIS WOMAN IS AWESOME Have you seen Elizabeth Warren on the shut down? Click here if you have only three minutes; here, if you have the full six. THIS WOMAN COULD DIE WITHOUT OBAMACARE Take 90 seconds for her story? THIS WOMAN IS STUBBORN! But, Joan Walsh argues: “Ruth Bader Ginsburg is right: She shouldn’t resign!” I hadn’t seen it that way. Ms. Walsh makes a reasonable case. THIS MAN BELIEVES THE DEVIL IS REAL And almost seems to mean it. It’s Justice Ginsburg’s colleague Antonin Scalia, who may be wrong-headed about practically everything, but is charming in this New York Magazine interview. THIS MAN BELIEVES TITHING WILL PROVIDE BETTER PROTECTION THAN INSURANCE Billionaire televangelist Pat Robertson tells an elderly women her husband is sick because she’s not giving enough to the church. # It is a bit nuts out there, and gerrymandering (and fundamentalist religion) have made it nutser. At least we have a Pope who seems positively Christ-like in his agenda. And a whole lot of electeds who — while less liberal than some would like — are mostly focused on moving the country forward. They are called . . . wait for it . . . Democrats. The Republicans, for their part, decided to scuttle the President’s first term even before he took office — they literally met and decided to do this — and to shut down the government this year just as he was being sworn in for his second. Rachel Maddow recounts that recent history. And don’t miss the part about David Koch’s act of generosity to 126 children — even as he is hurting countless others. Priceless.
The Shutdown in 10 Infuriating Sentences October 7, 2013 But before I get to those — by Kevin Drum of Mother Jones . . . . . . did you hear Kentucky Senator Rand Paul on “Meet the Press” yesterday? From the transcript: . . . I realize I’m not going to get my way [in killing Obamacare entirely]. But we do control a third of the government. People did elect us to fight. Sixty-one percent of the people in Kentucky voted for Romney. Seventy percent don’t like ObamaCare. So the thing is, is I’m supposed to go and fight to make bills either less bad or make them better if possible. So I think it is my job to stand up and provide oversight for legislation. It’s precisely what Congress is supposed to be doing. It’s worth noting that the House is one-half of one third of government; and that only a minority of House Members want to use the government shutdown this way — so Senator Paul is in the minority of one half of one third of the government. He acknowledges that the Affordable Care Act was passed by Congress, signed into law by the President, ruled Constitutional by the Supreme Court, and reaffirmed by the outcome of last year’s presidential election. It’s the law. But the people of Kentucky have been made to believe it’s a bad law (as they were once made to believe Iraq attacked us on 9/11 — it didn’t — and that “by far the vast majority” of then candidate George W. Bush’s proposed tax cut would go “to people at the bottom end of the economic ladder” — it didn’t — and that tobacco wouldn’t kill their loved ones — it did) and so Rand Paul is just trying to save them from it. What’s unusual about Congress modifying laws? It’s not [Congress’s] obligation once something is law to never change it. For example, in 1983, we changed social security. It’d been around 50 years and the age of eligibility was 65. We changed it to 67 because social security was going bankrupt. See? After 50 years Congress changed Social Security — albeit in an orderly, rational, bi-partisan way — and now that Obamacare has kicked in this week, and we’ve had . . . well, maybe not the same 50 years’ experience with it, but close to a week . . . he wants to change it by threatening to bring down the government and possibly the entire world economy because it’s just that important to the people of Kentucky that they not have affordable health care. As detailed here in the New York Times, the Republicans were planning to shut down the government all along. That’s why they refused 18 times to negotiate the budget in an orderly way these last six months — they wanted a crisis. It is so dishonest, so thuggish, so irrational, so unpatriotic — even the Wall Street Journal isn’t buying it. I could go on, but Kevin Drum does it better (as does Elizabeth Warren, whose by now widely-viewed clip I’ll link to tomorrow): The Shutdown in 10 Infuriating Sentences By Kevin Drum At its core, the dispute over the budget and the debt ceiling isn’t complicated at all. But it is full of misconceptions and urban myths. Here are the 10 facts worth remembering past all the obfuscation: Democrats have already agreed to fund the government at Republican levels. Despite what you might have heard, there have only been two serious government shutdowns in recent history, and both were the result of Republican ultimatums. Democrats in the Senate have been begging the House to negotiate over the budget for the past six months, but Republicans have refused. That’s because Republicans wanted to wait until they had either a government shutdown or a debt ceiling breach as leverage, something they’ve been very clear about all along. Republicans keep talking about compromise, but they’ve offered nothing in return for agreeing to their demands—except to keep the government intact if they get their way. The public is very strongly opposed to using a government shutdown to stop Obamacare. Contrary to Republican claims, the deficit is not increasing—it peaked in 2009 and has been dropping ever since, declining by $200 billion last year with another $450 billion drop projected this year. A long government shutdown is likely to seriously hurt economic growth, with a monthlong shutdown projected to slash GDP in the fourth quarter by 1 percentage point and reduce employment by over a million jobs. No, Democrats have not used debt ceiling hostage taking in the past to force presidents to accept their political agenda. This whole dispute is about the Republican Party fighting to make sure the working poor don’t have access to affordable health care.
Reign of the Morons – Time to Sell? October 4, 2013October 4, 2013 THE DEBT LIMIT If a guy with a $250 million investment portfolio takes out a $1 million mortgage to buy a house, it’s no big deal. If a guy with nothing borrows $1 million — call him Herb — well, ordinarily he can’t, because no one would lend it to him: it’s out of proportion to his creditworthiness. The reason so many people continue to lend U.S. money — and at record-low interest rates — is that in their collective judgment, we are a good risk. (So long as we don’t do something insane, like stop paying our bills.) When George W. Bush handed Barack Obama the $1.5 trillion 2009 deficit (the 2009 fiscal year having begun October 1, 2008), the National Debt was about $10 trillion — so this huge deficit grew it a further 15%. Now, though, with the debt about to hit $17 trillion and the deficit “only” $642 billion, the debt is growing at a much more manageable 3.8% or so. Manageable, because it’s about in line with the 4% or so growth in the economy (2% inflation, 2% real growth). Relative to the economy as a whole, the mostly-Republican-caused debt has stopped growing. And unlike Herb, who is nearing retirement, the U.S. economy could be working and growing and becoming more efficient and vibrant — given the pace of technological change — for centuries. So having a national debt roughly equal to one year’s output (like Herb having a $50,000 mortgage when his income is $50,000) is concerning but in no way devastating. What matters is the long term trend: > with ups and downs, is the debt gradually shrinking relative to the economy as a whole, as it did from 1946 through 1980, when it fell from 121% of GDP to just 30%? [Useful chart; note the declines under Clinton and, now, Obama.] > or is it gradually rising relative to the economy as a whole, as it did when Reagan, Bush, and Bush sent it soaring? The key, many agree, is to grow the economy. (And, one might hope, to grow it in ways that are light on the planet — if I give you $3,000 in yoga lessons, I tax the planet less than if I give you a $3,000 snowmobile.) With that in mind you have to wonder which is more likely to lead to growth: > an unhealthy, poorly educated citizenry working with outdated infrastructure? cutting back on research? discouraging the immigration of motivated young people? > or investments in health, education, infrastructure, and research — and passage of comprehensive immigration reform that the CBO says will boost economic activity and cut the deficit? Which is more likely to grow jobs: (a) low taxes on the best off, or (b) a thriving consumer class? (The answer , resoundingly, is B, as explained so well by Nick Hanauer here.) How about cutting the estate tax on billionheirs to zero, as the Republicans advocate? Maybe inequality in America — though it has grown so much wider since Ronald Reagan changed the course of the country — is just not wide enough! I feel a bout of sarcasm coming on, and that’s never attractive, so I will stop. But the path forward is clear: the Speaker needs to let Congress vote on restarting the government and lifting the debt ceiling.* Congress will vote in the affirmative. And then it should vote to put people back to work modernizing our infrastructure. This will ramp economic growth to a higher trajectory, which will shrink the deficit relative to the economy as a whole, and have the added virtue of building needed things that will last 100 years. You might almost think Congress is controlled by morons, as Charles Pierce argues in Esquire, “Reign of the Morons,” here. “This is what they came to Washington to do — to break the government of the United States.” *Which is such a stupid, artificial, needlessly self-imposed thing to begin with: the debates should occur before Congress spends the money, not after the bills come in to be paid. SELL? Riserman: “The shutdown; time to sell?” ☞ The shutdown is hardly news you and I share ahead of the crowd, so that alone is no reason to try to outwit the rest of the market. Generally speaking, those who try to “time the market,” getting out before it falls, back in once it has, do worse than those who buy and hold — especially in taxable accounts, where they have to share their gains with Uncle Sam.* John Boehner will presumably not cause the country to default . . . at which point the market — having expected that — may then go down, when the bounce some might expect fails to appear; or it may indeed bounce out of relief. But the better question for most people is whether they have the right long-term spending/saving/investing habits. These will lead to financial security a lot more surely than could their ability to beat the market. As always, we face powerful bullish forces and powerful bearish ones. The bearish: Eventually, interest rates have to rise. That poses a challenge to stocks. Also, we have a deeply dysfunctional Congress. And nuclear war could break out. And cyber-terrorism could wreak havoc that led to Armageddon. Etc. The bullish: Technology races ahead in ways that offer all but unimaginable prosperity (if we can learn to share the wealth). We could kick the Tea Party out of Congress next year (and eventually undo the gerrymandering that has worked so insidiously to block moderate Republicans from holding office). We have a good pope, a great president, and, potentially, a way forward with Iran and perhaps even with Russia and Syria. Etc. We don’t know what will happen, and in what order, so — if we are fortunate enough to have assets — we diversify. *$1,000 left to grow untaxed at 10% becomes $17,449 (pre-tax) after 30 years . . . but only $7,612 if gains are taxed at 30% each year along the way.
Cezanne and Rembrandt October 3, 2013 But first . . . HEALTH CARE AND THE SHUTDOWN Stephen Driscoll: “The hypocrisy of Republicans objecting to a health plan that was born in a Republican think tank and instituted by a Republican governor whom they then nominated for president is breathtaking.” Because they’re not just objecting — they’ve shut down the government to keep the law from taking effect! People will likely die as a result of the shutdown, but no matter. Some of the Republicans say they’ve taken this extreme step — and plan on the even more extreme step of threatening our credit rating and reserve-currency status — because the law is unConstitutional. As they read the Constitution, final say in such matters rests not with the Supreme Court — which, though right-leaning, found Obamacare Constitutional — but with the Tea Party, which has ruled otherwise. Other Republicans say the problem is that the President won’t negotiate — and heck, he’ll even negotiate with the Russians and Iran! Which is great spin, but fails to acknowledge the tremendous concessions already made to Republicans to get the law passed in the first place. That’s why it’s not single-payer. That’s why there’s no “public option.” That’s why the President modeled it on the successful Republican plan their 2012 presidential nominee had instituted when he was a governor. But now it’s the law. And projected to lower the deficit. And to provide greater health care security to almost everyone. So why would they shut down the government rather than see it move forward? As Chris Hayes recently asked: what if then House Speaker Nancy Pelosi had told George W. Bush she would shut down the government and cause the U.S. to default on its debt if Bush did not end the Iraq war? And repeal his tax cuts? What would Republicans have said about this tactic in that circumstance? It’s just never been done this way — government by Doomsday Machine. And as Jon Stewart pointed out recently, it’s not a “game of chicken” that’s being played with the fate of the nation. Chicken is when two drivers are barreling down on each other intentionally. This situation is one driver just driving responsibly in his lane, following the law, while the other, coming from the opposite direction, switches into that lane and threatens mayhem. It’s insane, not least because a majority of Americans chose to reelect the guy who promised to roll out Obamacare, rejecting the candidacy of the candidate who promised to kill it. And a majority voted for Democratic Representatives in Congress — the Republicans only have a majority in the House because of the way those votes were distributed (gerrymandering, among other things). And, yes, a majority of Americans still say they disapprove of Obamacare, but as was pointed out earlier this week, some of them disapprove because it doesn’t go far enough; and many of the others have no earthly idea what it is, they just know they hate it. Stephen concludes: “It’s simple: One side tried to bring healthcare to all. The other shut down the government. Which side will look like [bums] in the future? The same one that tried to stop the 40-hour work week, social security, medicare, gender parity, and marriage equality.” CEZANNE Only a couple hundred people have watched the WheelTug video I linked to Monday — here is a new version with the sound enhanced. I think it’s hard to watch without believing WheelTug has a real chance of becoming an airline industry standard. The company seems to believe that chance is high; but let’s assume for the sake of discussion that it’s 33%. The video shows its system saving anywhere from $700,000 to more than $3 million a year in operating costs per plane, of which the company plans to capture half; but let’s assume for the sake of discussion the savings average $300,000, on which, from its share, it nets $50,000. Five years from now there could be more than 10,000 planes equipped with WheelTug — who wouldn’t want this? — but let’s assume they have installed it in 3,000. Multiply 3,000 by $50,000 — and then multiply that by 33 % (the chance we’re assigning to success) and you get $50 million a year in net profit. From this one line of business. (Another possible line someday: automobiles.) So with the parent currently valued at $60 million, it is selling for roughly one times its risk-adjusted potential earnings (hypothetical though all this is). If you looked at what it would be worth if Wheeltug did pan out (i.e., no need to multiply by 33%), then it’s selling for about one-third of one times potential earnings. Unless you think they could one day be installed on 10,000 planes (again: who would not want this? the same folks who choose to buy TVs without remote controls?) — then it is selling at one-tenth of one times potential earnings. Unless you think they might net $100,000 per plane per year from that hoped for $700,000 to $3 million in annual savings — in which case it is selling at five hundredths of one times earnings. And you get all BOREF’s other potential lines of business thrown in free. They are pie in the sky, to be sure; but so was WheelTug until fairly recently. Who knows what comes next? Failure is always a possibility. But it seems to me that, given the potential upside, the parent company should be selling for at least $250 million, quadruple today’s stock price — yet still slightly less than that lovely Cezanne I keep linking to. At the very least, I’m having fun. Speaking of which: REMBRANDT Look what the Rijksmuseum did to drum up business. Ninety seconds. Very fun.
Barcelona October 1, 2013 BARCELONA And you think YOU have a lot to do between now and 2026. Take a look. One of the nicest cities in the world. WHICH DO YOU PREFER: OBAMACARE OR THE AFFORDABLE CARE ACT? This Jimmy Kimmel segment is classic. Well-meaning men and women on the street strongly prefer the Affordable Care Act to Obamacare. Never mind that they’re the same thing — which is another key thing to know about Obamacare. Reprising yesterday, in case you missed it: A KEY THING TO KNOW ABOUT OBAMACARE When Republicans tell you that a majority of Americans don’t like it, they don’t mention that when you adjust for those who don’t like it because it doesn’t go far enough* it turns out that a majority of Americans do favor Obamacare. And yet the Republicans are dead set against it. Obamacare increases virtually everyone’s health care security, improves the health of the citizenry and improves the health of the economy . . . all achieved through increased efficiencies and incentives and through — most tangibly — a shift of several tens of billions of dollars a year from wealthy investors to the working poor and middle class. (Wealthy investors will pay an extra $380,000 on each $10 million in dividends and capital gains they earn — though still less than they were paying under Ronald Reagan.) (And yes, if you make only $300,000 a year — which after deductions and exemptions, let’s say, leaves you with $250,000 in taxable income — even you will pay $380 more on each additional $10,000 of capital gains or dividends you might earn. But it’s really not the end of the world, even for you.) *Quite rightly, they would prefer a single-payer system of the type all the other advanced nations of the world have. HEALTHCARE.GOV I assume with 50 million people all wanting to root around healthcare,gov for an hour there were loads of capacity problems and will continue to be for days or weeks. But please send me your stories — good and bad. Anybody sign up? Get a better deal than they have now? A worse deal? One friend emailed me Sunday to say Obamacare had caused his existing monthly premium to drop by 8.5% for the year starting today, “the first drop in many years.” And my flu shot last week was free. So that makes two of us. Anybody else? GOVERNMENT SHUTDOWN Yep: the Republicans have shut it down. It’s that important to them to try to block care security and to keep preventive care from being free. (They claim to worry about the deficit, but repealing the law would actually increase the deficit.) At some point in the next 16 days Speaker Boehner will presumably waive the “Hastert rule” and allow the House to vote on raising the debt limit (and on starting the government back up again), even though it may cost him his speakership. No one who cries as freely as he does, and is as basically a simple, decent man as he is, would allow the global economy to collapse just to retain his gavel. Even the Koch brothers (and certainly the Wall Street Journal) are urging the House to raise the debt limit (i.e., pay its bills) and stop this insanity. The markets, barely fazed, seem to have high confidence we will not needlessly self-destruct and I think they’re right. I sure hope so! But to have taken it even this far — and to have fought so hard these past five years to obstruct the things that so clearly need doing (like putting people to work repairing our crumbling national infrastructure) is little short of tragic. As were the Bush years that led us into unnecessary war and wrecked our national balance sheet. Bring back Lincoln! Bring back Teddy Roosevelt! Bring back Dwight Eisenhower! Bring back Richard Nixon (even)! Bring back Ford! Bring back Rockefeller! But until then, please vote Democrat.