Friday, July 31, 2009

You’re Not Alone

As written on MSNBC’s First Read… (My comments are italicized.)

*** Mob rule? With the House embarking on its recess, Politico asks this question: Just how unruly will the congressional town halls be?

It’s difficult not to be “unruly” when our elected representatives blatantly lie to our face and consistently misrepresent us on issues that have long-lasting importance to our future as a nation. (Please note however, that I am not supporting violence in this situation.)

“On the eve of the August recess, members are reporting meetings that have gone terribly awry, marked by angry, sign-carrying mobs and disruptive behavior. In at least one case, a congressman [Dem. Tim Bishop] has stopped holding town hall events because the situation has spiraled so far out of control.”

The situation has spiraled so far out of control because they are taking our country in the wrong direction and don’t care when we express our concerns through email and phone calls. They’ve ignored us too many times, and it’s getting old. People are tired of being talked down to and treated like they’re children.

Bishop’s “decision came on the heels of a June 22 event he held in Setauket, N.Y., in which protesters dominated the meeting by shouting criticisms at the congressman for his positions on energy policy, health care and the bailout of the auto industry.

He should have figured this one out well before this point, but sadly, it seems that he’ll only listen to the most extreme protestations.

Within an hour of the disruption, police were called in to escort the 59-year-old Democrat — who has held more than 100 town hall meetings since he was elected in 2002 — to his car safely.”

Maybe other politicians should start worrying about our opinion too. Since we’re paying them to do a job and all. Just a thought.

The angry folks live in both ideological neighborhoods and get emboldened by folks on the internet, radio, and TV.

You gotta love the pat explanations. Quite obviously, these people listen to Rush Limbaugh and watch Fox News. Gasps of shock and horror!

Maybe lawmakers ought to go with the tele-town hall approach, where constituents get asked if they have a question an hour before. The planned stuff only serves as a target for groups to hijack these events.

Or maybe they should continue holding town hall meetings where they can see what we really think.

Jeannette

Thursday, July 30, 2009

How The Stimulus Bill Got Kinky (And Yes, I Said Kinky)

As unemployment keeps edging closer to the dreaded double digits, people are coming out more and more to question the presidentially-pushed stimulus package. Repeatedly, they bring up the same key point in their frustration and bewilderment: Where are the jobs?

Much to-do was made about the key areas that President Obama promised to give aid to, such as energy efficiency, the healthcare industry and infrastructure.

So far he’s purportedly given money to the first (Though it hasn’t had any significant effect on the labor market yet) and is doing his best to push through a completely separate set of spending for healthcare reform (Whatever happened to the money in the stimulus bill that was supposed to go towards giving medical staff better technology to work with?).

But what ever happened to the massive amounts of money supposedly destined for our roads and bridges, utilities and schools?

Thanks to Fox News, it appears that we have an answer to that nagging little question. Or at least a part of an answer, since we now know that the National Endowment for the Arts (NEA) was given $80 million of that $787 billion economic stimulus bill to do with as it saw fit.

First of all, let me say that I don’t want my hard-earned money being taken away from me to fund “jobs in museums, orchestras, theaters and dance troupes that have been hit hard by the recession.” I don’t want my hard-earned money being taken away from me to fund any job other than the basic necessities meant to keep this country running, but giving it away to the arts is just a slap in the face.

I have nothing against the arts, especially considering the number of people very close to me who are musicians and artists. And hey! Like most people with their B.A. in English, I have a burning desire to see my name printed on the cover of a novel someday, not to mention the accompanying, big fat check. So I’m not all that far removed from the other groups paid to express themselves creatively… except for the paid part, of course.

But that wasn’t what our leaders promised that funding would go. Regardless of whether we supported the bill or not, President Obama spoke repeatedly – during the elections, his time as president elect, and again when he took office – about the areas his plan composed of our tax dollars would go to.

Then again, if he had said that it would go to fund the arts, I don’t think people would have backed him up nearly as much. Because as much as art may brighten up our days, it isn’t a necessity. It isn’t food, it isn’t shelter and it isn’t medical attention. What it is, is a luxury, a business that the government should largely stay out of legalizing or funding.

The Low Down

But that isn’t the worst part of that portion of funding. Writer Joseph Abrams goes on to detail while “most of the money is being spent to help preserve jobs in museums, orchestras, theatres and dance troupes… some of the NEA’s grants are spicing up more than the economy.”

That would include the $50,000 the National Endowment for the Arts gave to Frameline film house, which just recently showed Thundercrack, advertised as “the world’s only underground kinky art porno horror film, complete with four men, three women and a gorilla.”

Lovely.

If I wanted to see that – which I don’t – I would just shell out money for a ticket. It can’t be more than $20, right? Regardless, much less than the $50,000 I, and the vast majority of my fellow taxpayers, apparently did spend on promoting such unnecessary productions.

Then there’s the $25,000 grant filed away in the “Dance” category and given to CounterPULSE in San Francisco, which presents a weekly production of “Perverts Put Out.” If you think they’re just playing on words, they’re not, though they are playing on other things with the blatant call to “join your fellow pervs for some explicit, twisted fun.”

Again, if people want to attend that kind of event, I’d prefer they do it on their own dollar.

Jeannette

Wednesday, July 29, 2009

How The American Taxpayer Is Being Scammed For All Their Worth

Where there’s demand, there’s a business opportunity and where there’s a business opportunity, money can be made.

According to the Wall Street Journal back in January of this year, there’s a high demand for energy efficient products. Writer Simona Covel reported that alternative-energy firms were seeing “an influx of inquiries and business from a wide range of companies looking to increase their energy efficiency, especially from those that believe the Obama administration will impose stricter regulations requiring them to conserve energy.”

Sure, that was in January before Obama officially took office, but since then, he’s turned talks of energy restrictions into the 1,200-page Waxman-Markey Climate And Energy Bill being circlulated through the U.S. legislative process even as I write this.

So naturally, that fear – and therefore that demand – should have only increased. And if/when that bill is passed, it will only generate more business, as companies will then be required by law to cut down on their carbon emissions. Of course they could just cut production, but even then they’ll likely have to begin buying up “green” products in order to survive.

So suffice it to say, there are plenty of money-making opportunities to be made in the alternative-energy industry. Demand is high, and will likely only go higher, the businesses operating in the alternative-energy sector are bound to bring in a pretty profit if they only know how to go about it properly.

It appears that many alternative energy companies are just plain stupid though. Either that, or they’re trying to manipulate the system to benefit themselves at the expense of the rest of the country.

It’s Time For Them To Clean Up Their Act

After reading Jasmin Melvin’s report on Reuters, those are the only conclusions I can come up with. She details how “officials of companies involved in solar and carbon capture technologies told the House Select Committee on Energy Independence and Global Warming that their biggest challenge to creating new green technologies was financing, not the science.”

In other words, Uncle Sam (i.e. the U.S. taxpayer) really needs to give them more money or they won’t be able to survive.

Former businesses such as Circuit City, Linens ‘N Things and KB Toys all could have used money last year too. But they couldn’t hack it on their own, so the free market let them fall… as well they should have.

Green businesses should be no different, especially with the tax cuts the Bush administration passed for them late last year under the Emergency Economic Stabilization Act of 2008. And if the Wall Street Journal’s account and the current facts listed above don’t cut it for you, consider that investment in clean-technology companies amounted to around $5 billion in 2007 and totaled $8.4 billion in 2008

Yes, many alternative-energy businesses have suffered so far this year, but what sector hasn’t? And there have still been some prominent winners out there, such as First Solar (Nasdaq: FSLR), which picked up an additional $0.50 per share last quarter. Or Novozymes, which reported a small profit growth in the January – March period, despite trouble in the U.S. ethanol industry that it works in.

Maybe, the alternative-energy industry needs to stop thinking of itself as so special, buckle down like the rest of us, and get a little innovative. Unlike so many in the retail sector can say, they have high demand. So how about they quit whining and actually do something about it.

…Something other than asking our already badly in-debt government for more money.

Jeannette

Tuesday, July 28, 2009

Faulty Figures: Omission Or Intentional Deceit?

Editor’s Note: Sometimes, you just come along an article that simply needs to be passed around, as it exposes exactly what we’re dealing with, both economically and politically. If you remember, President Obama and his cronies have repeatedly mentioned the thousands of jobs they’ve “saved or created.” Of course even that method of tracking was later on shown convoluted and unreliable, but that doesn’t mean that he and his in various positions of authority around the country aren’t continuing twisting the facts to their liking.

Below, you’ll find an exact reproduction of an AP article as published on The Daily Citizen from Dalton, GA. I’d encourage you to pass it along. - Jeannette

'Help Wanted’ counting stimulus jobs

How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program’s first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state’s accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

“Sometimes some work for an individual is better than no work,” said Oregon’s Senate president, Peter Courtney.

With the economy in tatters and unemployment rising, Oregon’s inventive math underscores the urgency for politicians across the country to show that spending programs designed to stimulate the economy are working — even if that means stretching the facts.

At the federal level, President Barack Obama has said the federal stimulus has created 150,000 jobs, a number based on a misused formula and which is so murky it can’t be verified.

At least 10 other states have launched their own miniature stimulus plans and nine others have proposed one, according to the National Conference of State Legislatures. Many of them, like Oregon, have promised job creation as a result of the public spending.

Ohio, for instance, passed a nearly $1.6 billion stimulus package even before Congress was looking at a federal program. When Gov. Ted Strickland first pitched the idea last year, he estimated the program could create some 80,000 jobs.

In North Carolina, a panel authorized hundreds of millions of dollars in new debt to speed up $740 million in government building projects. According to one estimate, the move could hurry the creation of 25,000 jobs.

As the bills for these programs mount, so will the pressure to show results. But, as Oregon illustrates, job estimates can very wildly.

“At best you can say it’s ambiguous, at worst you can say it’s intentional deception,” said economist Bruce Blonigen of the University of Oregon. “You have to normalize it into a benchmark that everybody can understand.”

Oregon’s accounting practices would not be allowed as part of the $787 billion federal stimulus. While the White House has made the unverifiable promise that 3.5 million jobs will be saved or created by the end of next year, when accountants actually begin taking head counts this fall, there are rules intended to guard against exactly what Oregon is doing.

The White House requires states to report numbers in terms of full-time, yearlong jobs. That means a part-time mechanic counts as half a job. A full-time construction worker who has a three-month paving contract counts as one-fourth of a job.

Using that method, the AP’s analysis of figures in Oregon shows the program so far has created the equivalent of 215 full-time jobs that will last three months. Oregon’s House speaker, Dave Hunt, called that measurement unfair, though nearly every other state that has passed a stimulus package already uses or plans to use it.

“This stimulus plan was intentionally designed for short-term projects to pump needed jobs and income into families, businesses and communities struggling to get by,” Hunt said in a statement. “No one ever said these would be full-time jobs for months at a time.”
Still, critics say counting jobs, without any consideration of their duration, isn’t good enough.

Monday, July 27, 2009

GM And Chrysler Given Yellow Light

At first glance, the decision just announced by the Obama administration today looks promising for American automakers. General Motors Corp. and Chrysler Group LLC have an open road in front of them; a future filled with intersections and junctions, entrances and exits that they both can choose from at will.

According to Ron Bloom, President Obama’s top auto advisor, both companies will operate without restrictions placed by the government.

Unlike before, when the government was giving directions (i.e. demands) to both corporations, Bloom admits that GM and Chrysler’s “long-term viability and ability to repay the taxpayer dollars they were receiving would be seriously undermined if the government became involved in day-to-day business decisions.”

So in all of its collective wisdom, the current administration came to the decision that both boards will have the power to make decisions as they wish, without having to run to Uncle Sam for permission first.

If that sounds like a good direction for the free market to take, please note the big, yellow warning signs up ahead and slow down for a second. Because that generous allowance could turn out to be nothing more than a golden wheel lock.

The Obama administration still will determine who sits on the boards and who doesn’t.

Automatically, you should see the warning indicators activate. They could just be idiot lights of course. There’s no guarantee the government will abuse its power over who essentially survives at the company and who doesn’t.

But that doesn’t mean we shouldn’t be aware of that possibility.

Proceed With Caution

Ever since this economic crisis really began to emerge last year, the government has appeared too happy too assume responsibility over whatever sectors of the private market it can get its hands on. And if that isn’t dangerous enough, elected officials have also shown a disturbing tendency to keep hold of their acquisitions.

Remember the banking stress tests? Even when Treasury Secretary Timothy Geithner and Federal Reserve Chief Ben Bernanke gave the all-clear to nine out of the nineteen banks, they still imposed multiple restrictions on how and when those same allegedly healthy institutions could pay back the loans they’d taken from the government.

And then we can’t forget that the same administration is at least taking the first steps towards nationalizing healthcare. Like it or not, and for better or worse, this is a very hands-on government. So with that continuing track record, I can’t help but wonder if this newest move of only reappointing and replacing board members as they see fit is really a way of both having its cake and eating it too.

After all, a significant number of Americans opposed when former President Bush started bailing out companies, and they continued to feel negatively about those policies when President Obama began championing them.

It’s an unpopular idea, and let’s face it: Very few elected officials want to take the unpopular stance.

So, with this arrangement, the government could very easily influence board members’ votes through intimidation – real or imagined – while on the surface appearing completely uninvolved. After all, President Obama fired former General Motors CEO Rick Wagoner over a disagreement on what direction to take the company in.

Who says he won’t act like that again?
Maybe I’m just cynical, but this conspiracy theory has too much data backing it up for me to just dismiss so easily.

Jeannette

Thursday, July 23, 2009

Maybe He Was Just Doing His Job

Back a few years ago, my family all went on vacation, and asked a friend of ours to check in on our dog twice a day. He told us he would, and he kept his word. There was just one little problem…

When he went in to check on the dog one morning, he accidentally forgot his set of keys inside the house after locking it up safe and secure. He needed those keys back of course, otherwise we would have come home to a dead dog – not the best homecoming present – so he did what many of us would do in the situation. He tried breaking in.

The thing is, while he was trying to jimmy open one of the windows, one of our neighbors saw what he was doing and immediately jumped to the natural conclusion: She called the cops.

It isn’t any surprise then that the cops arrived, stopped Craig in the middle of his “break-in” attempt, and immediately asked for ID, which he forked over (right away and without verbally assaulting them), complying with their requests/demands to the full extent of the law until the situation got resolved.

Of course, everything checked out just as soon as they called my father on his cell phone to confirm Craig’s story. Though our neighbor who called the police was mortified at the mistake, no real harm was done. No arrests were made. And life returned back to normal.

It seems to me that everybody was doing their job in the situation. Craig was trying to carry through on his promise to take care of our dog, the neighbor was doing her civic duty in reporting what appeared to be a crime in progress, and the cops were doing their job in responding appropriately.

Sadly, it appears that I have to state that Craig is white.

Act Belligerent To A Cop And You’re Probably Going To Regret It

Let’s fast forward to Tuesday, July 21, 2009 when a man was seen attempting to break into a house by wedging his body against the door. A neighbor saw this taking place and called the cops, who responded, just as in the case above. According to the police report, the “burglar” turned out to be the home owner, a mistake that could have been fixed and dismissed quite quickly.

But Henry Louis Gates Jr. was extremely uncooperative, accused the policeman who responded of racism from the get go, and pursued the officer outside to continue shouting racist charges at him. When Gates refused to adhere to two warnings against “disorderly conduct,” the officer arrested him.

Sadly, it appears that I have to state that Gates is black.

Those people accustomed to crying racism have unsurprisingly been quick to cry racism. They’re not paying much attention to the fact that Gates isn’t disputing the exact details of the report… even the more ludicrous ones.

If I were Gates, I’d be pointing out the absurdity of a full grown, educated man saying something like “I’ll see your mama outside.” Yet everything I read while scouring the news on the subject – everything from CNN to the Root to Fox and the Drudge Report – hasn’t mentioned the ridiculous comment except to quote the police report.

A Presidential Excuse

When asked about the kafuffle, this is what President Obama said:

“I think it's fair to say, number one, any of us would be pretty angry.”

Really? Because my friend Craig wasn’t angry when the cops came to question him. And honestly, I can’t imagine being angry either, even though I could play the gender card if I really wanted to.

“Number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.”

According to the police report, Gates wasn’t arrested on the breaking and entering suspicions, which had been resolved already. He was arrested for disorderly conduct.

“And number three — what I think we know separate and apart from this incident — is that there is a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately, and that's just a fact.”

As a white woman, I’ve been “stopped by law enforcement” four times. Twice was for expired tags, and twice for speeding. My father, a white man, was stopped once for doing the speed limit. Why? Because he somehow looked suspicious while doing so.

Sometimes A Cop Is Just A Cop

Racism exists. That, as the president pointed out, is a fact. As a child, I saw one of my white friends make a very unflattering remark to one of my black friends. My six year-old brain couldn’t comprehend why she would say what she did, though looking back I unfortunately get it.

And according to my younger sister, a few of her friends are racist today, and have made inappropriate and hateful comments before.

For that matter though, racism exists the other way around as well. That’s why I’ve been called the derogatory term for “white,” before, and given dirty looks by my fellow shoppers in certain parts of town. That’s also why a friend of mine was verbally and physically assaulted in Philadelphia by a group of black men.

But sometimes race doesn’t factor into the matter at all. Sometimes, a cop is just a cop, and an uncooperative and cantankerous old man is just that: an uncooperative and cantankerous old man.

Jeannette

Tuesday, July 21, 2009

Barney Frank: It Wasn’t My Fault. Go Blame Bush And The Republicans

Barney Frank has spoken out about his part in the housing bubble in the last few weeks, and according to him, it wasn’t his fault. Not only wasn’t it his fault, but it was the Bush administration’s fault. And not only was it the Bush administration’s fault, but Mr. Frank really did try to do the right thing and nobody would listen to him.

Here are a couple other snippets from his recent conversation with Tech Ticker’s Aaron Task:

“Nobody that I know of except for Robert Shillman, saw the drop in conventional housing prices. On the other hand, I and several other Democrats saw a problem with subprime mortgages. We did try to regulate subprime mortgages.”

(i.e. It wasn’t my fault. Go blame Bush and the Republicans.)

“I was in the minority in 2005… If I really had the power to stop the Republicans from doing anything, you know what I would have done first? I would have stopped the war in Iraq. I would have stopped the impeachment of Bill Clinton. I would have stopped tax breaks for people making millions of dollars a year.”

(i.e. It wasn’t my fault. Go blame Bush and the Republicans.)

“The Bush administration made a big mistake; they were the ones that pushed home ownership for very poor people. Liberals wanted rental housing. We thought that was more appropriate.”

(i.e. It wasn’t my fault. Go blame Bush and the Republicans)

“And in fact in 2005, I was pushing for regulation of subprime mortgages and for regulations of Fannie Mae and Freddie Mac.”

(i.e. It wasn’t my fault. Go blame Bush and the Republicans.)

It’s really easy to talk the talk now, but what exactly was he preaching and practicing back in 2003 when the problem could have been resolved in a much less economically painful way?

A Long History Of It Being Barney Frank’s Fault

In a move heralded by the New York Times as “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago,” then Treasury Secretary John Snow under the Bush administration called for Congress to “eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.”

Barney Frank vehemently opposed this overhaul, saying that “these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

In 2004, when Congress was warned yet again that something needed to be done about Fannie Mae and Freddie Mac in terms of regulations and oversight, he said: “I don’t see anything in [the] report that raises safety and soundness problems.”

In 2005, he continued holding onto that erroneous view:

"Those who argue that housing prices are now at a point of a bubble seem to me to be missing a very important point. Unlike previous examples we have had when substantial excessive inflation of prices later caused problems we are talking here about an entity, home ownership, homes where there is not the degree of leverage where we have seen elsewhere. This is not the dot-com situation. We had problems with people having invested in business plans of which there was no reality; people building fiber optic cables for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level. But you're not going to see the collapse that you see when people talk about a bubble and so those of us on our committee in particular will continue to push for home ownership."

Sorry Barney Frank, But It Was And Is Your Fault

Even now in 2009, Mr. Frank is looking to lift certain regulations just imposed on Fannie Mae and Freddie Mac back in March.

So what in Barney Frank’s history can lead us to believe that he ever “saw a problem with subprime mortgages” or tried “to regulate subprime mortgages?”

What in his recorded and documented statements has indicated that he “wanted rental housing” for the poor instead of full-out, home-ownership or that in 2005, he “was pushing for regulation of subprime mortgages and for regulations of Fannie Mae and Freddie Mac?”

As far as I can tell, nothing indicates that he was on the right side of the aisle on this particular issue. In fact, the evidence points drastically in the opposite direction. But I suppose that expecting honesty from one of our elected officials these days is just asking too much.

Jeannette

Friday, July 17, 2009

“If We Don’t Keep Spending, We’re Going To Go Bankrupt”

So here’s a hypothetical situation:

ASU is in debt. Big time. Although it’s a well-established and internationally recognized company, ASU has wracked up enough debt to make its creditors increasingly nervous. And the problem is that it just keeps on spending… during a time when the consumer market is a far cry from healthy.

But ASU has grandiose plans of expansion, and it doesn’t want to wait until it has paid down its debt to more reasonable levels. Instead, it wants to borrow even more right away – while simultaneously implementing other projects that require even more borrowing – in order to meet its goals.

When investors join creditors in questioning the logic and timing of such an expansion, ASU sends out its vice president to calm them with the following speech:

“The president knows and I know, that the status quo is simply not acceptable. It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now, it can’t do it financially. We’re going to go bankrupt… “Now, people when I say that look at me and say, ‘what are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt? The answer is yes, that's what I’m telling you.”

A Real Situation… Frighteningly Real

After that (Sarcasm Alert 1) stirring speech chock full of (Sarcasm Alert 2) wise words, would you want to invest in this company?

I, for one, know that I would steer clear from putting my hard-earned money into that company. If I had a choice. Which I don’t.

And for that matter, neither do you.

You see, just reverse the order of those letters and you got a real situation and not a hypothetical one.

The good-old USA is in that exact predicament, with tax revenue down thanks to the poor economy, lost jobs and fear of more lost jobs. And yet, Vice President Joe Biden did honestly just speak those words as quoted above, on behalf of the entire administration about the healthcare “reform” Congress is currently mulling over.

A Lesson From Starbucks Corporation

Back last year, well before the economy became as bad as it is now, Starbucks Corporation (Nasdaq: SBUX) CEO Howard Schultz did what any self-respecting, educated, intelligent CEO with his head screwed on right would do during a prolonged downturn.

He cut costs.

Instead of expanding, he shut down roughly 8% of Starbucks’ stores and cut about 7% of its global workforce. The move was painful but necessary, and in order to bolster sales even more, Schultz even later went so far as to cut prices.

The result? A healthier Starbucks today, or at the very least, a Starbucks not on the verge of bankruptcy.

Clearly, Starbucks got the memo that detailed how and why spending isn’t always a good idea.

Now somebody just needs to pass it along to the United States government.

Jeannette

Thursday, July 16, 2009

Henry Paulson: Threatening Bank Of America CEO Ken Lewis Was “Appropriate”

Last month, Federal Reserve Chairman Ben Bernanke told Congress that he didn’t pressure Bank of America Corp. (NYSE: BAC) into buying Merrill Lynch… a deal that ultimately cost taxpayers $20 billion.

He also said that no employee of the Federal Reserve committed such blatant abuse of power.

We can choose to believe him or not, but that was his testimony regardless. Today, former Treasury Secretary Henry Paulson was up on the stand, and possibly because he is no longer in any nationally authoritative role, he gave a very different testimony.

So yeah, he admits now – though he kept remarkably silent back in April when the question of coercion came up in the first place – that he applied pressure to get his own way in the matter.

And let’s face it: He applied it well, as evidenced by the outcome (i.e. BAC CEO Kenneth Lewis approving the takeover of Merrill Lynch).

Unethical Behavior Excused As Appropriate

Citing that he never told anybody to keep the nitty-gritty (i.e. dangerous) details from shareholders, Paulson still openly acknowledged that he threatened Lewis’ job security should he decide to drop the deal.

Let me quote the AP here:

“In testimony to the committee, Paulson said he told Lewis last year that reneging on his promise to purchase Merrill Lynch would show a "colossal lack of judgment."
Paulson said that "under such circumstances," the Federal Reserve would be justified in removing management at the bank.

“By referring to the Federal Reserve's supervisory powers, I intended to deliver a strong message reinforcing the view that had been consistently expressed by the Federal Reserve, as Bank of America's regulator, and shared by the Treasury, that it would be unthinkable for Bank of America to take this destructive action for which there was no reasonable legal basis and which would show a lack of judgment," Paulson said.

“Paulson said he believed his remarks to Lewis were ‘appropriate.’”

Perhaps Paulson believes we live in Iran, where the term “political pressure” takes on whole new meanings, but here in the U.S., it’s supposed to run differently. Here, the government bullying privately owned companies into potentially dangerous situations is generally deemed inappropriate.

Does it happen? Sure it does, as evidenced in this case. But that doesn’t mean that the law of the land gives the right to do so or makes it “appropriate” in any way.

If All Else Fails, Blame The Victim

In a classic blame shifting move we’ve become familiar with in Washington, Rep. Edolphus Towns of New York, who happens to be the Democratic chairman of the House Oversight and Government Reform Committee, voiced his views of who was really to blame.

As quoted from a real-time blog published by the New York Times, Mr. Towns alleged that “Ken Lewis appears to have manipulated this unaccountable system to his benefit. The problem is that while all this was going on, the American people, investors and Congress were kept in the dark.”

Then he added the leading question: “Was Bank of America really forced to go through with the deal, or was this an old-fashioned Brooklyn shakedown?”

Once again, despite blatant contradicting facts, it’s the banks that come out looking like the one and only group of bad guys… even when they’re in fact the victims.

Jeannette

Wednesday, July 15, 2009

Why China Isn’t Going To Listen To Steven Chu

According to U.S. Energy Secretary Steven Chu, China has to get its greenhouse-gas emissions together, and it has to do it now. Acknowledging that the biggest contributors have always been the developed Western world in the past, he pointed out that the trend has changed.

For one thing, China has officially become the world’s biggest emitter of bad stuff into the air, overtaking the U.S. for that dubious honor. And, Mr. Chu asserts, that problem will likely only get worse, with China potentially releasing more in the next two to three decades than everything the U.S. has ever emitted since the Industrial Revolution.

“The developed world did make the problem, I admit that. But the developing world can make it much worse,” he told his audience, and went on to describe an even bleaker global future between “something bad” even if something is done “or something very bad” if nothing is done.

It’s always nice to have such optimism from our officials, isn’t it? But putting that aside, here’s why Mr. Chu is wasting his time preaching to the Chinese.

Three Reasons Why China Doesn’t Care What We Say About Global Warming

China already thinks we’re a joke, albeit a dangerous one financially speaking. It wasn’t that long ago that students at Peking University flat-out laughed at Treasury Secretary Timothy Geithner’s assertion that “Chinese assets [in the U.S. Dollar] are safe.” And both before and after, China has expressed its unhappiness with U.S. government spending and the U.S. dollar. The emerging nation has given us disgruntled advice repeatedly in the last few months, so why in the world is it going to take advice from us on this issue that we seem to hold so dear when we haven’t really listened to their complaints about a matter they find equally important?

China already has taken steps to “go green,” developing next-generation, clean-coal power plants with the potential to actually separate carbon dioxide from emissions for storage. In addition, they’re trying out solar and wind power as well. So who are we to ask them to do more? We may be today’s superpower, but according to just about everybody, China is up next.

The official Chinese stance on global warming comes down to this: “Sure, we acknowledge that it exists but you do something about it.” And really, I can’t say that I blame them for that stance. China is an emerging nation, and while each country doubtlessly has responsibility towards the greater global good, its first responsibility is – and should be – to itself and its citizens. Putting restraints on even a fully developed and prosperous country has the potential to do more bad than good. And for a people still finding its legs? Well, that chance increases big time. China knows that. So why should it curb itself now, especially considering that the U.S. had its run in the smog for the last century (and did so without any restrictions or immediate negative affects)?

So what’s the upside for China to listen and taking on the weight of “environmental responsibility?”

Well, there’s always the possibility that doing so will save the world from any added horrors of global warming, but since when has China cared about saving the world anyway?

Jeannette

Tuesday, July 14, 2009

Russia Says “No We Can’t.”

(Sarcasm Alert 1) Reuters broke shocking news this morning: Russia isn’t being cooperative with the U.S.

I know, I know. This is extremely surprising considering the positive rhetoric the former communist country has directed our way in the last year. Here are two of my favorites:

(11.6.09 – incidentally, the day that then President-elect Barack Obama gave his victory speech) “Tskhinvali’s [Georgia’s] tragedy is, among other things, the result of the arrogant course of the U.S. administration, which hates criticism and prefers unilateral decisions.” – Russian President Dmitry Medvedev

(7.3.09) “If we see (that) our American partners refrain from deploying new missile complexes, anti-missile defense systems, or for example review their approach to widening military-political blocs, or generally refrain from bloc-like thinking, this would be a big movement forward.” (i.e. Normally, the U.S. does adhere to that kind of behavior) – Russian President Dmitry Medvedev

Those comments, plus the fact that Russia has been so cozy with Iran this year – Medvedev was after all, the first to congratulate “re-elected” Iranian President Mahmoud Ahmadinejad – strongly indicate that the Euro-Asian country is well set in it’s attitude towards both Iran and the U.S.

Russia Doesn’t Like Us… What A Surprise

So it shouldn’t be any surprise that Medvedev is now saying what he’s saying; that the U.S. can’t rely on Russia’s help in curbing Iranian enthusiasm towards hating the Western world. Any deals Russia and the U.S. work out will have next to nothing to do with Iran. (Basically, all take and no give)

So why was it such a surprise to the Obama administration?

Maybe that’s because President Obama is so intent on solving issues through polite chit-chat and pretty-pleases… even at the risk of ignoring blatant facts that indicate no matter of cherries on top will solve the problem.

I’m not saying that playing nice isn’t important. It is. It’s very important. But it’s equally important to approach international (or national) relationships with common sense and some sense of dignity. Crawling on fours seldom results in enviable endings.

Jeannette

Friday, July 10, 2009

Why We Should Really Be Disgusted With The “Second Stimulus Package”

Due to the nature of my job – and my own curiosity – I start my workday out by looking at the Drudge Report, Fox News, and CNN. Nothing necessarily against any of those sites, but that particular blend is my version of fair and balanced news.

On the Drudge Report, my attention was instantly captured by a picture of a woman with an attractive figure, walking up a set of stairs right next to our (Sarcasm Alert 1) ever-esteemed President. In that snapshot, Mr. Obama appears to be looking in her direction, and the caption below reads “Second Stimulus Package.”

Based on the picture alone, I’ll admit that I didn’t get the pun until after I clicked on the accompanying link, read the ABC tribute and watched the accompanying video.

Let’s start with the opinion expressed by ABC News Senior White House Correspondent Jake Tapper, (Sarcasm Alert 2) that beacon of unbiased reporting:

“On first glance, the snapshot appears to show President Obama caught in a moment of less than lofty analysis. But upon looking at the video, the moment might seem to appear quite innocent – one of those times when a picture can be misleading. The president was on a higher step and was stepping down – so he looked down to assure his footing as the woman was walking up the stairs.”

Why Should We Take You Seriously Mr. Tapper?

Completely forgetting that he may or may not have checked out somebody other than his wife who he should have known was a minor (considering that it was the Junior G8 delegates doing the photoshoot with him. Keyword: junior), why in the world is the ABC News Senior White House Correspondent even reporting on this? Is it breaking news of international or national importance? Shouldn’t this video and question be more the stuff of say, celebrity gossipmonger Perez Hilton?

If the president were proven prone to such bad behavior, well then, maybe he’d have a good excuse to “report” on it. But as far as the larger media and the average global citizen is aware, this is the first time since he became president. So basically, who cares? (Other than the first lady of course, who had every reason to put him in the doghouse.)

Also, while I completely agree with Mr. Tapper that pictures can be misleading, and I actually don’t think that the picture itself is all that incriminating, the video did what the picture could not: convinced me that Obama was acting in a manner inappropriate for a married man not to mention the president of the United States of America.

In other words, he checked her out and he checked her out good.

Could I be wrong? Sure: Videos have been misconstrued before just like pictures, but there’s a much smaller chance of that. And as a young woman who shares certain attributes with the girl in the video, I think I’m well qualified to comment on the subject.

As for the entire article, I have a few questions for Mr. Tapper:

Do you honestly believe what you write?
Do you honestly get any professional satisfaction from what you write?
Do you even know what checking a girl out looks like?

For his sake, I really hope that his answers to questions 1 and 2 are a resounding “no.” But regardless, if this is really what our press has been reduced to, then this country is in serious trouble.

Jeannette

Thursday, July 9, 2009

A Tale Of Two Market Readings

As of 11:30, the markets are mixed as the bears and bulls fight it out this afternoon.

That’s because we got mixed news before the opening bell, and depending on which way you want to interpret it – or more likely, which one you want to focus on and which one you choose to ignore – the economy is doing better or worse.

Let’s start with the good news… kind-of.

Last night, the Labor Department reported that the number of U.S. workers filing new claims for jobless benefits fell and fell sharply from 617,000 two weeks ago to 565,000 last week.

At first glance, that 52,000 drop sounds amazing, and appears to strongly indicate that the economy is recovering, especially since analysts were calling for a much more moderate pullback to 605,000. But not quite so fast, since the official report also noted an usual pattern in the layoffs.

That’s largely because of the ailing American automotive industry, which recorded a significant number less layoffs than in previous years; historic data that the experts would have taken into consideration before releasing their estimates.

Those “seasonal factors” also affected the overall results, as claims actually rose by a small amount. But then when adjusted for the time of year and other relevant factors, the final count showed a large decrease instead of the original small increase?

If you’re confused, don’t worry. So is everybody else.

The Labor Department also released the official numbers for those filing for unemployment benefits, which rose to 6.883 million at the end of June, a climb of 159,000 from the last report.

Now onto the bad news…

It’s The Economy (Again) Stupid!

The government wasn’t the only one to issue facts and figures this week, as the world of retail ponied up as well. Not surprisingly, the numbers weren’t very pretty.

The AP blames it partially on rainy weather and partially on job worries, but I’m going to go out on what I perceive to be a very sturdy limb and call them absolutely nuts. Even if, as it reports, “many areas from the West Coast to the Northeast received two or three times their normal June precipitation last month, according to National Oceanic and Atmospheric Administration’s National Climatic Data Center,” when was the last time that a rainy day stopped people from going out and buying to this degree?

If the press is really that intent on ignoring the facts, than more power to them I suppose. But the truth is that you can blame about 50% of the shopping drop on the unemployed and 50% of it on those fearful of becoming unemployed.

This isn’t rocket science boys and girls. It’s Logic 101, a course that the AP apparently flunked.

Ken Perkins, president of retail consulting firm Retail Metrics LLC however, probably got an A. “Consumers are under severe pressure on the job front, so discretionary spending is just not happening,” he reported, and the evidence seems to support him.

The declines were worse than expected, with Wal-Mart Stores Inc. (NYSE: WMT), Abercrombie & Fitch Co. (NYSE: ANF), The Children’s Place Inc., Limited Brands Inc. – owner of Victoria’s Secret – (NYSE: LTD) Target Corp. (NYSE: TGT), Costco Wholesale Corporation (Nasdaq: COST), Gap Inc. (NYSE: GPS), American Eagle Outfitters Inc. (NYSE: AEO), etc. all posting losses for same-store sales last month.
Enough said.

Wednesday, July 8, 2009

I’m On The Banks’ Side This Time

Regardless of which way you choose to “interpret” the facts, most of us can come to the conclusion that our financial system is filled with idiots. Sure, you can – and I have when I felt it necessary – make excuses for their bad behavior, but that doesn’t change the fact that they’re still really quite stupid.

If banks and mortgage companies were pressured by the government to give out those risky loans – as so much evidence points to – well then, the CEOs of said companies should have put up a fuss instead of going quite so quietly into the night. If they had stood up to the government like big boys and girls, we probably wouldn’t be in the mess we’re in right now.

And if – as Congress repeatedly alleges despite evidence to the contrary – handing out mortgages and loans to people who had no business taking them out in the first place was all an evil scheme created by dastardly executives solely intent on lining their pockets with profits? Well than, those executives are still idiots, as their little scheme didn’t work out quite so neatly as they intended.

But with that all said, they’re apparently not as dumb as the state of California would prefer them to be. And when I say “they” I mean the really dumb ones… you know, the ones you saw in the news every other day for months on end last fall through this spring: Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), Wells Fargo & Co. (NYSE: WFC).

Did The Light Bulb Just Go On?

If their stupidity did live up to the standards California apparently prefers, than those very banks would happily accept the IOUs the state has begun issuing in lieu of actual money. Governor Schwarzenegger and his fellow public servants seem to think that handing out bits of paper officially branded with the Californian seal should mean something.

The problem is that they don’t.

Sure, you can make arguments about California “needing” to issue those IOUs all you want. They may be true, but it doesn’t change the fact that California is already broke and can not guarantee that it can clean up its mess in time to pay back those IOUs… especially not with the 3.75% annual interest rate.

Even the experts at Fitch Ratings are betting against it, moving California’s credit rating down to BBB, just above junk bond status, due to “the state’s continued inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis.”

In the beginning stages of the brilliant plan to hand out these IOUs, bank executives did give it the green light. But apparently they’ve actually thought this one through. Shocking, I know.
Despite government explanations that the state will run out of money by the end of this month should those IOUs not be issued and accepted, the big banks are just not convinced that it’s a safe play.

Blaming The Banks Is So Passé

Beth Mills of the California Bankers Association voiced her opinion on the matter, that banks were concerned about several details about the entire process, including the high potential for fraud.

Lisa Stevens, head of community banking for Wells Fargo issued the following statement on the matter: “We’re very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of payments to some businesses and individuals.”
As for the state? They just “don’t want anybody to suffer who can’t redeem them when they need cash,” according to Garin Casaleggio, spokesman for State Controller John Chiang.

I don’t want anybody to suffer either, but I don’t think that the banks have a responsibility to the state. They do however, have a responsibility to themselves, to their clients and to their employees, all of whom could easily be hurt by continuing to accept the IOUs.

The Californian government screwed up badly and repeatedly in order to get itself into this mess. Now it’s time for it to deal with the natural consequences of its actions.

Jeannette