Who Would You Cheer For?

I'm not sure who is more annoying, yoga posers or Facebook/iPhone lemmings. That is why I find this story so amusing:

Yoga teacher fired over cell phone ban at Facebook

 For years, yoga instructor Alice Van Ness has started her classes with a simple request - that students turn their cell phones off.She brought that policy with her to Facebook, where she began teaching a weekly class at the company's Menlo Park campus in March. But it proved to be a hard policy to follow for at least one employee, who began tapping away on her phone in the middle of class. And after Van Ness shot her a disapproving look, the instructor found herself out of a job.

This is what happens when one dare question the entitlement of Generation Net.

"Hello - this is only Facebook," said Van Ness, whose firing cost her a teaching gig at Cisco too. "We're not talking about the U.S. government here. We're not talking about Russia is about to bomb us. We're talking about Facebook. Something can't wait half an hour?"
Facebook declined to comment. Representatives for Plus One Health Management did not respond to requests for comment. In its termination notice, the company suggested the Facebook incident was part of a pattern of strict behavior on Van Ness' part; she had previously asked a Cisco employee not to take photographs of the class while it was in session. 

Sorry Ms. Van Ness, when your students have 30 second attention spans, 30 minutes is like, forever. Besides, the student was probably just looking up the current stock price of FB. Must be devastating to have thought you were going to be rich and realize you're just another working chump like the rest of us.

The incident highlights a growing tension in health studios, where students come to leave the world behind but often find themselves incapable of not checking their text messages, e-mails and - of course - Facebook. As smart-phone usage has grown, many studios have posted prominent notices asking students to leave them outside the studio.
But at a yoga class on a corporate campus, setting aside job responsibilities entirely, even for a few minutes during the work day, can be a stretch.

Surely amazing perks like free yoga classes are a great recruiting tool. Guess Facebook forgot to tell their employees they had to work while doing it. Reminds me of a parent who tells the child, "sure have a cupcake!" and every time he reaches for it he gets slapped on the hand with a ruler. If that was indeed the case at Facebook. More likely, the student was just an insufferable twit.

Van Ness said her class at Facebook was just beginning when she noticed a student in the front row using a cell phone. She asked the entire class to shut the devices off. Halfway into their routine, just as they began the pose known as ardha chandrasna, the same student picked up her phone again.
Van Ness said nothing, but shot the student a look.
"I'm sure my face said it all," she later said in a blog post. "Really? Your e-mail is more important than understanding your body? It's more important than taking time for you? It's more important than everyone else here?"

Van Ness is such a dinosaur. Of course email is more important than your body. She probably still had a flip phone and listens to CD's.

"The culture of these places is to let them do whatever they want," she said. "And I'm just not really OK with anarchy."
She crumpled up her termination notice and discarded it. In an apparent show of support, her roommate's cat, Veronica, tore it up.

 Fight the Power Van Ness! Sounds like you may have a bright future as a cat lady.

Strangely, after reading the article the whole episode reminded me of the Battle of Stalingrad where we had Communists fighting Nazis. Tough to know who to root for. That was my same dilemma with this story. I am not sure which stereotype is more annoying, holier-than-thou yoga instructors, or people that simply cannot turn off their smart phones even for a second.

Lassen Creamed Corn

Nothing like a little Summer Solstice back country ski trip to remind one why California is the best place on earth.

The Summit from Bumpass Hell Parking lot. Elev. ~7,900 ft.

15 ft. Snowbank in late June. The road won't be fully open until mid-July

The trail up

.

We started down there...

We boot packed the whole way up.

Lunch on the summit

Mt Lassen summit. Elevation 10,457 ft. Last time it erupted was 97 short years ago!

Mt. Shasta in the distance.

Half way down our first descent--about a 45 degree angle. Glorious corn snow!

Another view looking down the same slope (Northwest aspect)

No back country trip is complete without a little downclimbing...

or a little bushwackin'.

Skinning up Eagle Peak for a lap of delightful corn snow

Mt. Lassen remains an active volcano. The steam on the right of the picture is from a vent.

Bubblin' mud

Sulphur spring.

The post ski feast--grilled ribeye with home made chimichurri sauce. Hard to believe most everybody else chose to eat backpacker meals out of a bag.

Burning Man 2010

Since this was my 5th trip to Blackrock City, I've had plenty of time to ponder what I like and dislike about Burning Man. I really enjoy setting up and maintaining camp, early morning and the sunrise that comes with it, good funky beats booming from incredible sound systems, spontaneous fun, quality time with my good friends, meeting interesting people that aren't all spun-out, Space Cowboys, hopping on my bike and pedaling off by myself to experience whatever may come, and leaving on Saturday before the Burn to avoid Exodus. Things I've decided I dislike are the deep house break beats that the majority of sound camps pump out continually, guests at camp that are rude and act like it's their camp, white out dust storms, people that take themselves too seriously, and Exodus.

Obama will have a Bud Lite

In a bid to paper over his (Cambridge cops) "acted stupidly" comment, Obama has invited Professor Gates and Officer Crowley to the White House to make a great show of letting bygones be bygones by having all parties sit down over a beer to hash out their differences, like real men do.

Problem is, what kind of real man drinks Bud Lite?

Make His a Bud Light: Obama Picks Best-Selling Beer

July 29 (Bloomberg) -- President Barack Obama will have Bud Light tomorrow when he hosts an old friend and the police officer who arrested him.

Obama, 47, has picked the top-selling beer in the U.S. for his get-together at the White House with Harvard University professor Henry Louis Gates Jr. and Cambridge, Massachusetts, police Sergeant James Crowley, according to an administration official who asked to remain anonymous. The official wouldn’t say what the guests would be drinking.

Political strategists and marketing experts called the pick an easy, non-controversial choice for a meeting designed to defuse the tension sparked by the July 16 arrest of Gates by Crowley.

“He’s trying to send a message that he’s an average American and these are two other average Americans,” said Matt Mackiowack, a Republican strategist. “If you complicate that by making an exotic choice, or an import, or too expensive, you can be too cute by half.”

Obama invited Crowley and Gates to the White House after the president drew criticism in a July 22 news conference for saying the Cambridge police “acted stupidly” in arresting Gates at his home on a disorderly conduct charge, which was later dropped. Obama spoke hours after police union officials in Cambridge called on him to apologize.

Two days later, Obama called Crowley and Gates, an old friend, to invite them to the White House for a beer.

Mr. President, I know you are trying to seem like an authentic American--a real regular Joe--but if you think you are convincing us real regular Joes that you are just one of the guys by drinking a Bud Lite, I am sorry to inform you and your political handlers that you missed this one by a mile. Toss caution into the political wind and have a drink you actually enjoy--even if it is a white wine spritzer with an extra lemon twist. Try authentic authenticity for once. You're going to be judged no matter what you drink, you may as well enjoy it. For crissakes, at least have a regular strength Budweiser.

I think they should all drink Black and Tans. Aside from being politically correct and appropriate for such a kumbaya occasion, they're delicious!

Though if I were Officer Crowley, I would have respectfully declined the invitation in the first place. I can't think of a more pointless, contrived, uncomfortable situation--with no upside--to voluntarily place myself in.

Having beers and yucking it up is something you do with friends, not with a privileged, ivory tower race baiter and the Leader of the Free World, who says he doesn't have all the details of the situation then in the next breath says you "acted stupidly."

Seems to me Professor Gates is the only one who acted stupidly. Common sense dictates that you never talk back to a cop, even if you feel you are being mistreated. If you truly have been mistreated, file a complaint and sort it out in a lawsuit after wards. Here's another piece of common sense. When a cop comes to investigate a reported break in at your house, maybe you should consider thanking the officer for putting his life on the line to protect your property.

(Full disclosure: I have been known to drink a Bud Lite from time to time, but that is only when the choice is either brackish water or nothing at all.)

Keeping track of the TARP

TARP COP: Get tough on banks

The top cop tracking the $700 billion bailout program said Monday that he's concerned federal officials are ignoring his proposals for preventing tax dollars from being wasted or pilfered.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, released a 260-page report detailing a long list of concerns about government efforts to prop up hundreds of banks, Wall Street firms and auto companies.

The report criticizes the Treasury Department the most for its unwillingness to adopt some of his recommendations.

Barofsky cites two examples: He wants Treasury to force bailout recipients to keep track of how exactly they are spending TARP funds. He also wants officials to erect a "firewall" to prevent private investment managers -- the kind hired to manage and invest taxpayer dollars -- from taking advantage of insider knowledge.

I guess it is too much to ask Treasury to:

a) ask TARP recipients to keep track of where the money is going
b) discourage insider trading

"This administration promised an 'unprecedented level' of accountability and oversight, but as this report reveals, they are falling far short of that promise," Issa said. "In fact, the Treasury Department is actively obstructing transparency. The American people deserve to know how their tax dollars are being spent -- especially considering they are the ones who are footing the bill."

The brazen, unapologetic manner in which the self-anointed aristocrats of our nation are selling the rest of us down the river is literally breathtaking. We are quickly becoming a Banana Republic, and few seem to care.

It's like deja vu all over again

It's great to see that Wall St. has gotten over the Great Hiccup of 2008 and it's back to business as usual:

Morgan Stanley Plans to Turn Downgraded Loan CDO Into AAA Bonds

July 8 (Bloomberg) -- Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.

Two years after the credit markets began to seize up, costing the world’s biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks.

A lot of banks and insurers “cannot buy anything but AAA,” said Sylvain Raynes, a principal at R&R Consulting in New York and co-author of “Elements of Structured Finance,” which is due to be published in November by Oxford University Press. “You’re manufacturing AAA out of not AAA, therefore allowing those people who have AAA written on their forehead to buy.”

It seems as though dogs are not the only ones that lack a short term memory.

It also reminds me of an old saying, "no matter how good the recipe is, you'll never make chicken salad out of chicken shit."

"California: come for the sun, stay for the tire fire"

If there's ever a contest for a new state slogan, that'll be the one I will submit.


Joel Kotkin: Who Killed California's Economy?

It took some amazing incompetence to toss this best-endowed of places down into the dustbin of history. Yet conventional wisdom views the crisis largely as a legacy of Proposition 13, which in effect capped only taxes.

This lets too many malefactors off the hook. I covered the Proposition 13 campaign for the Washington Post and examined its aftermath up close. It passed because California was running huge surpluses at the time, even as soaring property taxes were driving people from their homes.

Admittedly it was a crude instrument, but by limiting those property taxes Proposition 13 managed to save people’s houses. To the surprise of many prognosticators, the state government did not go out of business. It has continued to expand faster than either its income or population. . . . The media and political pundits refuse to see this gap between the state’s budget and its ability to pay as an essential issue. It is. (This is not to say structural reform is not needed. I would support, for example, reforming some of the unintended ill-effects of Proposition 13 that weakened local government and left control of the budget to Sacramento.)

But the fundamental problem remains. California’s economy–once wondrously diverse with aerospace, high-tech, agriculture and international trade–has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation. No surprise, then, that California’s jobs engine has sputtered, and it may be heading toward 15% unemployment.

What not to name a company

Surely there are many examples in the business world of a company living to regret the name of a product or a joint venture. The first one that comes to mind was when Chevy rolled out the Nova in Mexico back in the 70's without considering that in Spanish, "no va" means "no go."

Today we learn that Russia's Gazprom and Nigerian Gas are teaming up in a joint venture that should provide a boost to Nigeria's state revenue.

The name of this new company will be NiGaz Energy Company, Ltd.

Manners

If one were to make a broad observation about the youth of today, it would be hard to dispute the fact that in general they are sorely lacking in the etiquette and manners department. Here is a list that every teenager--and quite a few adults--could benefit from reading and striving to follow.

It is a list of 110 rules of good etiquette that George Washington copied as a teenager.

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1st Every Action done in Company, ought to be with Some Sign of Respect, to those that are Present.

2d When in Company, put not your Hands to any Part of the Body, not usualy Discovered.

3d Shew Nothing to your Freind that may affright him.

4 In the Presence of Others Sing not to yourself with a humming Noise, nor Drum with your Fingers or Feet.

5th If You Cough, Sneeze, Sigh, or Yawn, do it not Loud but Privately; and Speak not in your Yawning, but put Your handkercheif or Hand before your face and turn aside.

6th Sleep not when others Speak, Sit not when others stand, Speak not when you Should hold your Peace, walk not on when others Stop.

7th Put not off your Cloths in the presence of Others, nor go out your Chamber half Drest.

8th At Play and at Fire its Good manners to Give Place to the last Commer, and affect not to Speak Louder than Ordinary.

9th Spit not in the Fire, nor Stoop low before it neither Put your Hands into the Flames to warm them, nor Set your Feet upon the Fire especially if there be meat before it.

10th When you Sit down, Keep your Feet firm and Even, without putting one on the other or Crossing them.

11th Shift not yourself in the Sight of others nor Gnaw your nails.

12th Shake not the head, Feet, or Legs rowl not the Eys lift not one eyebrow higher than the other wry not the mouth, and bedew no mans face with your Spittle, by approaching too near him you Speak.

13th Kill no Vermin as Fleas, lice ticks &c in the Sight of Others, if you See any filth or thick Spittle put your foot Dexteriously upon it if it be upon the Cloths of your Companions, Put it off privately, and if it be upon your own Cloths return Thanks to him who puts it off.

14th Turn not your Back to others especially in Speaking, Jog not the Table or Desk on which Another reads or writes, lean not upon any one.

15th Keep your Nails clean and Short, also your Hands and Teeth Clean yet without Shewing any great Concern for them.

16th Do not Puff up the Cheeks, Loll not out the tongue rub the Hands, or beard, thrust out the lips, or bite them or keep the Lips too open or too Close.

17th Be no Flatterer, neither Play with any that delights not to be Play'd Withal.

18th Read no Letters, Books, or Papers in Company but when there is a Necessity for the doing of it you must ask leave: come not near the Books or Writings of Another so as to read them unless desired or give your opinion of them unask'd also look not nigh when another is writing a Letter.

19th let your Countenance be pleasant but in Serious Matters Somewhat grave.

20th The Gestures of the Body must be Suited to the discourse you are upon.

21st Reproach none for the Infirmaties of Nature, nor Delight to Put them that have in mind thereof.

22d Shew not yourself glad at the Misfortune of another though he were your enemy.

23d When you see a Crime punished, you may be inwardly Pleased; but always shew Pity to the Suffering Offender.

24th Do not laugh too loud or too much at any Publick Spectacle.

25th Superfluous Complements and all Affectation of Ceremonie are to be avoided, yet where due they are not to be Neglected.

26th In Pulling off your Hat to Persons of Distinction, as Noblemen, Justices, Churchmen &c make a Reverence, bowing more or less according to the Custom of the Better Bred, and Quality of the Person. Amongst your equals expect not always that they Should begin with you first, but to Pull off the Hat when there is no need is Affectation, in the Manner of Saluting and resaluting in words keep to the most usual Custom.

27th Tis ill manners to bid one more eminent than yourself be covered as well as not to do it to whom it's due Likewise he that makes too much haste to Put on his hat does not well, yet he ought to Put it on at the first, or at most the Second time of being ask'd; now what is herein Spoken, of Qualification in behaviour in Saluting, ought also to be observed in taking of Place, and Sitting down for ceremonies without Bounds is troublesome.

28th If any one come to Speak to you while you are Sitting Stand up tho he be your Inferiour, and when you Present Seats let it be to every one according to his Degree.

29th When you meet with one of Greater Quality than yourself, Stop, and retire especially if it be at a Door or any Straight place to give way for him to Pass.

30th In walking the highest Place in most Countrys Seems to be on the right hand therefore Place yourself on the left of him whom you desire to Honour: but if three walk together the mid Place is the most Honourable the wall is usually given to the most worthy if two walk together.

31st If any one far Surpassess others, either in age, Estate, or Merit yet would give Place to a meaner than himself in his own lodging or elsewhere the one ought not to except it, So he on the other part should not use much earnestness nor offer it above once or twice.

32d To one that is your equal, or not much inferior you are to give the cheif Place in your Lodging and he to who 'tis offered ought at the first to refuse it but at the Second to accept though not without acknowledging his own unworthiness.

33d They that are in Dignity or in office have in all places Preceedency but whilst they are Young they ought to respect those that are their equals in Birth or other Qualitys, though they have no Publick charge.

34th It is good Manners to prefer them to whom we Speak befo ourselves especially if they be above us with whom in no Sort we ought to begin.

35th Let your Discourse with Men of Business be Short and Comprehensive.

36th Artificers & Persons of low Degree ought not to use many ceremonies to Lords, or Others of high Degree but Respect and highly Honour them, and those of high Degree ought to treat them with affibility & Courtesie, without Arrogancy.

37th In Speaking to men of Quality do not lean nor Look them full in the Face, nor approach too near them at lest Keep a full Pace from them.

38th In visiting the Sick, do not Presently play the Physicion if you be not Knowing therein.

39th In writing or Speaking, give to every Person his due Title According to his Degree & the Custom of the Place.

40th Strive not with your Superiers in argument, but always Submit your Judgment to others with Modesty.

41st Undertake not to Teach your equal in the art himself Proffesses; it Savours of arrogancy.

42d Let thy ceremonies in Courtesie be proper to the Dignity of his place with whom thou conversest for it is absurd to act the same with a Clown and a Prince.

43d Do not express Joy before one sick or in pain for that contrary Passion will aggravate his Misery.

44th When a man does all he can though it Succeeds not well blame not him that did it.

45th Being to advise or reprehend any one, consider whether it ought to be in publick or in Private; presently, or at Some other time in what terms to do it & in reproving Shew no Signs of Cholar but do it with all Sweetness and Mildness.

46th Take all Admonitions thankfully in what Time or Place Soever given but afterwards not being culpable take a Time & Place convenient to let him know it that gave them.

47th Mock not nor Jest at any thing of Importance break no Jest that are Sharp Biting and if you Deliver any thing witty and Pleasent abtain from Laughing thereat yourself.

48th Wherein you reprove Another be unblameable yourself; for example is more prevalent than Precepts.

49 Use no Reproachfull Language against any one neither Curse nor Revile.

50th Be not hasty to beleive flying Reports to the Disparagement of any.

51st Wear not your Cloths, foul, unript or Dusty but See they be Brush'd once every day at least and take heed that you approach not to any Uncleaness.

52d In your Apparel be Modest and endeavour to accomodate Nature, rather than to procure Admiration keep to the Fashion of your equals Such as are Civil and orderly with respect to Times and Places.

53d Run not in the Streets, neither go too slowly nor with Mouth open go not Shaking yr Arms kick not the earth with yr feet, go not upon the Toes, nor in a Dancing fashion.

54th Play not the Peacock, looking every where about you, to See if you be well Deck't, if your Shoes fit well if your Stokings Sit neatly, and Cloths handsomely.

55th Eat not in the Streets, nor in the House, out of Season.

56th Associate yourself with Men of good Quality if you Esteem your own Reputation; for 'tis better to be alone than in bad Company.

57th In walking up and Down in a House, only with One in Company if he be Greater than yourself, at the first give him the Right hand and Stop not till he does and be not the first that turns, and when you do turn let it be with your face towards him, if he be a Man of Great Quality, walk not with him Cheek by Joul but Somewhat behind him; but yet in Such a Manner that he may easily Speak to you.

58th Let your Conversation be without Malice or Envy, for 'tis a Sign of a Tractable and Commendable Nature: And in all Causes of Passion admit Reason to Govern.

59th Never express anything unbecoming, nor Act agst the Rules Moral before your inferiours.

60th Be not immodest in urging your Freinds to Discover a Secret.

61st Utter not base and frivilous things amongst grave and Learn'd Men nor very Difficult Questians or Subjects, among the Ignorant or things hard to be believed, Stuff not your Discourse with Sentences amongst your Betters nor Equals.

62d Speak not of doleful Things in a Time of Mirth or at the Table; Speak not of Melancholy Things as Death and Wounds, and if others Mention them Change if you can the Discourse tell not your Dreams, but to your intimate Friend.

63d A Man ought not to value himself of his Atchievements, or rare Qualities of wit; much less of his riches Virtue or Kindred.

64th Break not a Jest where none take pleasure in mirth Laugh not aloud, nor at all without Occasion, deride no mans Misfortune, tho' there Seem to be Some cause.

65th Speak not injurious Words neither in Jest nor Earnest Scoff at none although they give Occasion.

66th Be not froward but friendly and Courteous; the first to Salute hear and answer & be not Pensive when it's a time to Converse.

67th Detract not from others neither be excessive in Commanding.

68th Go not thither, where you know not, whether you Shall be Welcome or not. Give not Advice with[out] being Ask'd & when desired do it briefly.

69 If two contend together take not the part of either unconstrained; and be not obstinate in your own Opinion, in Things indiferent be of the Major Side.

70th Reprehend not the imperfections of others for that belongs to Parents Masters and Superiours.

71st Gaze not on the marks or blemishes of Others and ask not how they came. What you may Speak in Secret to your Friend deliver not before others.

72d Speak not in an unknown Tongue in Company but in your own Language and that as those of Quality do and not as the Vulgar; Sublime matters treat Seriously.

73d Think before you Speak pronounce not imperfectly nor bring out your Words too hastily but orderly & distinctly.

74th When Another Speaks be attentive your Self and disturb not the Audience if any hesitate in his Words help him not nor Prompt him without desired, Interrupt him not, nor Answer him till his Speech be ended.

75th In the midst of Discourse ask not of what one treateth but if you Perceive any Stop because of your coming you may well intreat him gently to Proceed: If a Person of Quality comes in while your Conversing it's handsome to Repeat what was said before.

76th While you are talking, Point not with your Finger at him of Whom you Discourse nor Approach too near him to whom you talk especially to his face.

77th Treat with men at fit Times about Business & Whisper not in the Company of Others.

78th Make no Comparisons and if any of the Company be Commended for any brave act of Vertue, commend not another for the Same.

79th Be not apt to relate News if you know not the truth thereof. In Discoursing of things you Have heard Name not your Author always A Secret Discover not.

80th Be not Tedious in Discourse or in reading unless you find the Company pleased therewith.

81st Be not Curious to Know the Affairs tof Others neither approach those that Speak in Private.

82d Undertake not what you cannot Perform but be Carefull to keep your Promise.

83d When you deliver a matter do it without Passion & with Discretion, however mean the Person be you do it too.

84th When your Superiours talk to any Body hearken not neither Speak nor Laugh.

85th In Company of these of Higher Quality than yourself Speak not til you are ask'd a Question then Stand upright put of your Hat & Answer in few words.

86 In Disputes, be not So Desireous to Overcome as not to give Liberty to each one to deliver his Opinion and Submit to the Judgment of the Major Part especially if they are Judges of the Dispute.

87th Let thy carriage be such as becomes a Man Grave Settled and attentive to that which is spoken. Contradict not at every turn what others Say.

88th Be not tedious in Discourse, make not many Digressions, nor repeat often the Same manner of Discourse.

89th Speak not Evil of the absent for it is unjust.

90 Being Set at meat Scratch not neither Spit Cough or blow your Nose except there's a Necessity for it.

91st Make no Shew of taking great Delight in your Victuals, Feed not with Greediness; cut your Bread with a Knife, lean not on the Table neither find fault with what you Eat.

92 Take no Salt or cut Bread with your Knife Greasy.

93 Entertaining any one at table it is decent to present him wt. meat, Undertake not to help others undesired by the Master.

94th If you Soak bread in the Sauce let it be no more than what you put in your Mouth at a time and blow not your broth at Table but Stay till Cools of it Self.

95th Put not your meat to your Mouth with your Knife in your hand neither Spit forth the Stones of any fruit Pye upon a Dish nor Cast anything under the table.

96 It's unbecoming to Stoop much to ones Meat Keep your Fingers clean & when foul wipe them on a Corner of your Table Napkin.

97th Put not another bit into your Mouth til the former be Swallowed let not your Morsels be too big for the Gowls.

98th Drink not nor talk with your mouth full neither Gaze about you while you are a Drinking.

99th Drink not too leisurely nor yet too hastily. Before and after Drinking wipe your Lips breath not then or Ever with too Great a Noise, for its uncivil.

100 Cleanse not your teeth with the Table Cloth Napkin Fork or Knife but if Others do it let it be done wt. a Pick Tooth.

101st Rince not your Mouth in the Presence of Others.

102d It is out of use to call upon the Company often to Eat nor need you Drink to others every Time you Drink.

103d In Company of your Betters be not longer in eating than they are lay not your Arm but only your hand upon the table.

104th It belongs to the Chiefest in Company to unfold his Napkin and fall to Meat first, But he ought then to Begin in time & to Dispatch with Dexterity that the Slowest may have time allowed him.

105th Be not Angry at Table whatever happens & if you have reason to be so, Shew it not but on a Chearfull Countenance especially if there be Strangers for Good Humour makes one Dish of Meat a Feast.

106th Set not yourself at the upper of the Table but if it be your Due or that the Master of the house will have it So, Contend not, least you Should Trouble the Company.

107th If others talk at Table be attentive but talk not with Meat in your Mouth.

108th When you Speak of God or his Atributes, let it be Seriously & wt. Reverence. Honour & Obey your Natural Parents altho they be Poor.

109th Let your Recreations be Manfull not Sinfull.

110th Labour to keep alive in your Breast that Little Spark of Celestial fire Called Conscience.

Finis

Testing the waters

One of my current concerns as I voiced in a previous post is that the Obama administration may try to take over the Federal Reserve by using the strong arm of a Democratic Congress. Looks like they may be testing the waters:

Bloomberg article: Fed Said to Retreat From Seeking Power to Sell Its Own Bills

At the House Budget hearing, a lawmaker brought up the idea of making Fed district-bank presidents subject to Senate confirmation. Currently the presidents are nominated by the banks’ boards of directors and approved by the U.S.-appointed Fed governors in Washington.

Representative Marcy Kaptur, an Ohio Democrat, asked Bernanke during the hearing whether he supported the idea. “No,” the chairman replied.

“The last thing the Fed wants is for its independence of monetary policy to be challenged,” said David M. Jones, president of DMJ Advisors LLC in Denver and a former Fed economist. “It’s very unlikely this debt thing would be pursued.”

The car of the future

A friend of mine snapped this picture while traveling through rural Indiana last week:

It's official: Congress and the SEC are insane

Insanity has been defined as the repetition of the same task with the expectation of a different result. If that's the case, then the SEC and Congress offer a text book example:

US Lawmakers Push Short-Selling Changes Following Report

A bipartisan group of U.S. senators said the SEC needs to consider new restrictions to help quell naked short selling, including a possible requirement that short sellers borrow shares before they try and sell a stock short. Naked short selling occurs when a trader sells shares that are not actually in their possession, potentially creating downward pressure on the price of shares.

"Unless the SEC can develop an appropriate alternative, a strict pre-borrow requirement may be the only way to adequately protect shareholders' rights," Sen. Charles Grassley, R-Iowa said in a joint release with Sen. Carl Leving, D- Mich., and Sen. Arlen Specter, D-Penn.

Last time I checked, it was already a requirement to get a borrow before you shorted a stock. The problem has been and remains enforcement.

One thing is certain. We'll need a vast new bureaucracy to enforce this groundbreaking new legislation.

In other news, my dog's breath smells like dog food.

Observing the weathervane

This quote summarizes this week’s sentiment rather succinctly: "There will likely be a growing steady recognition that in trying to prevent a Depression, the transfer of risk has been shifted from the private sector to the public purses and this may create a longer, more drawn out problem."

• Geithner admits overnight that the US credit rating is in jeopardy in light of our heavy issuance
• PIMCO's Bill Gross said the U.S. will eventually lose its AAA rating
  
• Moody's did say Thursday it is comfortable with the triple-A sovereign rating on the United States, but it is not guaranteed forever
• Goldman Sachs said the hike in oil prices this week was due to real oil market fundamentals and not just hedging against a weak dollar and equity market rallies. "The oil market was shocked by disruptions in Nigeria, refinery problems in the U.S. and a strong gasoline market," Goldman said in a research note. (Not sure why they think they have any credibility. Last year when oil was at $140/bbl they were calling for $200/bbl by year end. Their prop desk was probably getting short on the call, but I digress...--Ed)
• US Treasury was getting hit hard at the end of the day yesterday as the market was getting ready for big new supply coming next week - $101B of fresh Treasuries to be auctioned
• WAPO reported that the Obama administration is preparing to send GM into bankruptcy as early as the end of next week under a plan that would give the auto maker tens of billions of dollars more in public financing
• Mastercard will lose more than half of a $59B portfolio of debit-card users after JPMorgan Chase & Co. decided to shift more business to Visa
  
• The FDIC seized BKUNA, the 34th bank failure of the year, with $12.8B in assets, $8.6B in deposits and 85 branches
• AIG announced that Chairman and CEO Edward Liddy will step down and also proposed a 1-for-20 reverse stock split

I think that at some point in the not too distant future the Obama Administration, with the help of Congress, will attempt to take over the Fed. I bet the majority of Americans will see nothing wrong with that, at least the ones who have no idea (and don't care to have one) what the Federal Reserve system is and why it was created in the first place.

The elephant in the room

Bruce Bartlett at Forbes does a good job of quantifying exactly what it would take to fully fund all of our upcoming Social Security and Medicare liabilities.

The 81% Tax Increase

Most Americans believe that the Social Security trust fund contains a pot of money that is sitting somewhere earning interest to pay their benefits when they retire. On paper this is true; somewhere in a Treasury Department ledger there are $2.4 trillion worth of assets labeled "Social Security trust fund."

The problem is that by law 100% of these "assets" are invested in Treasury securities. Therefore, the trust fund does not have any actual resources with which to pay Social Security benefits. It's as if you wrote an IOU to yourself; no matter how large the IOU is it doesn't increase your net worth.

Consequently, whether there is $2.4 trillion in the Social Security trust fund or $240 trillion has no bearing on the federal government's ability to pay benefits that have been promised. In a very technical sense, it would lose the ability to pay benefits in excess of current tax revenues once the trust fund is exhausted. But long before that date Congress would simply change the law to explicitly allow general revenues to be used to pay Social Security benefits, something it could easily do in a day.

Social Security's actuaries make such a calculation on page 64. It says that Social Security's unfunded liability in perpetuity is $17.5 trillion (treating the trust fund as meaningless). The program would need that much money today in a real trust fund outside the government earning a true return to pay for all the benefits that have been promised over and above future Social Security taxes. In effect, the capital stock of the nation would have to be $17.5 trillion larger than it is right now. Alternatively, the payroll tax rate would have to rise by 4%.

To put it another way, Social Security's unfunded liability equals 1.3% of the gross domestic product. So if we were to fund its deficit with general revenues, income taxes would have to rise by 1.3% of GDP immediately and forever. With the personal income tax raising about 10% of GDP in coming years, according to the Congressional Budget Office, this means that every taxpayer would have to pay 13% more just to make sure that all Social Security benefits currently promised will be paid.

That's just the social security portion--the baby elephant. Let's have a look at the real elephant--Medicare:

As bad as that is, however, Social Security's problems are trivial compared to Medicare's. Its trustees also issued a report this week. On page 69 we see that just part A of that program, which pays for hospital care, has an unfunded liability of $36.4 trillion in perpetuity. The payroll tax rate would have to rise by 6.5% immediately to cover that shortfall or 2.8% of GDP forever. Thus every taxpayer would face a 28% increase in their income taxes if general revenues were used to pay future Medicare part A benefits that have been promised over and above revenues from the Medicare tax.

But this is just the beginning of Medicare's problems, because it also has two other programs: part B, which covers doctor's visits, and part D, which pays for prescription drugs.

The unfunded portion of Medicare part B is already covered by general revenues under current law. The present value of that is $37 trillion or 2.8% of GDP in perpetuity according to the trustees report (p. 111). The unfunded portion of Medicare part D, which was rammed into law by George W. Bush and a Republican Congress in 2003, is also covered by general revenues under current law and has a present value of $15.5 trillion or 1.2% of GDP forever (p. 127).

To summarize, we see that taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP. This adds up to 8.1% of GDP. Thus federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.

I see three solutions to this problem as it exists today:

A) cut benefits
B) massive tax increase
C) hyperinflation

We're in this mess precisely because government refuses to make hard choices and instead just kicks the can further down the road, so the chances of A) happening are slim to none and slim just walked out the door. Imagine the mass of baby-boomers rolling their walkers up to Capitol Hill after beating their canes into clubs the minute some unfortunate congressional rube dared to suggest a cut in benefits.

Surely B) will be tried, but an 81% tax increase would result in some very unpleasant blow back from anybody still left in this country who produces anything of value. Since Congress has already allowed our monetary base to double from $900bil to $2 tril since last October, C) seems the likely choice. I reckon it won't be long before investors in US government debt begin to demand a risk premium. There's already anecdotal evidence that recent treasury auctions have not gone as smoothly as planned. At that point, "backed by the full faith and credit of the United States" will have about as much meaning as "the check's in the mail."

There are ways to combat hyperinflation, and I may be hyperventilating with hyperbole, but since our government has a proven track record of taking the easiest route possible, what's to stop them from doing it yet again?

Ask me no questions, I'll tell you no lies

Greenmail: Money paid by a company (or allied company or individual) to acquire its own shares of stock from a shareholder who is threatening to take control of, or unwanted influence over, the company. The term is a neologism combining the terms greenback and blackmail, invented by journalists and commentators who saw the practices of corporate raiders as a form of blackmail. The target company is financially held hostage, and is legally forced to pay the greenmailer to go away.

Jonathon Weil makes some interesting observations about a recent unsolicited payment from Goldman Sachs to the Commonwealth of Massachusetts:

Goldman Sachs Pays Greenmail to make Snoops Go Away


May 14 (Bloomberg) -- Thanks to the commonwealth of Massachusetts, crusading attorneys general throughout the land now have a road map for extracting multimillion-dollar checks from Wall Street banks such as Goldman Sachs Group Inc.: Don’t accuse them of anything at all.

The big news from Goldman and Massachusetts Attorney General Martha Coakley this week was a $60 million settlement, under which the investment bank resolved her office’s investigation into its packaging of mortgage securities backed by subprime home loans. Per the usual custom in such accords, Goldman didn’t admit any wrongdoing.

The odd part is that Coakley’s office didn’t accuse Goldman of any wrongdoing, either. It filed no lawsuit. And it made no allegations that Goldman had violated any statutes or rules.

Why did Goldman pay if Coakley’s investigators couldn’t identify any infractions to allege? That’s a mystery. The only statement I could squeeze out of Goldman was a one-liner from a P.R. man, Michael DuVally. “Goldman Sachs is pleased to have resolved this matter,” he said. I’ll bet it is.

Odd behavior from an investment bank--sorry, holding company-- not exactly known for spending money frivolously.

When I first read through the settlement agreement, which contained no findings of fact, I couldn’t help but wonder if this might be one of those instances where a prospective plaintiff agrees to take a payoff in exchange for keeping silent about any damaging information it knows.

You Have to Wonder

Coakley said it was a fair question. She assured me, though, that this wasn’t the case. “There was no smoking gun here,” Coakley said. She said Goldman’s $60 million offer was everything her office could have hoped for, especially given its limited budget and jurisdiction over the bank’s activities. Even if the state had filed claims against Goldman, “we would not be able to achieve a better result,” Coakley said.

That may be true. It’s also conceivable that Goldman had no legal liability, and decided to pay the equivalent of a parking ticket just so it could get the investigation over with and stop racking up bills for outside lawyers.

Yet there’s the inescapable feeling that we have no idea what really happened here. Those 714 borrowers may be getting compensation. What much of the public is looking for, though, are answers about how some of the nation’s most powerful Wall Street banks helped drive us into our present economic mess.

We didn’t get any this time. Perhaps that’s one reason Goldman is so pleased with this investigation’s resolution.

Trickle up poverty

Ed Yardeni once again nails it:

The politicians in Washington, DC have an advantage over many of us: They don’t work for a living. So they have plenty of free time to figure out ways to take money away from those of us who do. Working stiffs like us don’t have much time to stop them. We need a national Tea Party to check and balance the Kleptocrat Party running amuck on both sides of the aisle of our nation’s capitol. On April 15, there were tea parties in several cities around the nation to protest ballooning federal deficits and rising taxes. Most of the demonstrations were held during lunch time when people could get away for an hour from work!

The authors of our Constitution intended that it would protect the liberties of the individual and limit the power of the government. They intentionally designed a political system of checks and balances so that it would more often than not result in gridlock. Both the Democrats and the Republicans, and all the special interest groups that support them, have been chipping away at this system for decades. Rather than fight one another to a draw, they’ve come up with lots of compromises, and have compromised the checks and balances system. They couldn’t have done so if their spending were constrained by a balanced budget amendment. Nevertheless, until this year, there was some sense of fiscal limits, if not discipline left in Washington. This is no longer the case.

The current Administration has proposed, and Congress is likely to enact, a dramatic expansion of social welfare spending over the next 10 years. At the same time, more and more Americans are getting excused from paying any taxes if their incomes are low enough. Many may effectively benefit from a negative income tax. That leaves fewer and fewer Americans to pick up the government’s tab. These remaining taxpayers may be relatively well off, but there aren’t enough of them to pay the government’s bills. So the federal government is scrambling to find new taxes, though such taxes won’t come close to filling the gap between federal spending and revenues. Let’s review some recent developments focusing on the government’s trivial pursuit of additional nickel-and-dime revenues:

(1) The Office of Management and Budget now estimates that the deficit will be $1.84tn this fiscal year, a 5% increase over the Administration's estimate released in February.

(2) Over the next 10 years, the federal deficit is projected to total nearly $10tn. The Administration proposes to cut taxes by $736bn for middle-income families and $99bn for small businesses during the same period.

(3) Over the next 10 years, the Administration hopes to raise $210bn by closing tax loopholes for multinational corporations. This is likely to put US corporations at a competitive disadvantage since most other countries don't require their companies to pay taxes on foreign earnings.

(4) Over the next 10 years, $58bn in additional tax revenue will come from changing the way assets in estates are valued ($24.2bn), from modifying rules for some life insurance company products and contracts ($12.8bn), and from changing the way income is treated for some dealers of equity options and commodities ($2.6bn).

(5) Treasury officials also recently outlined plans to eliminate $36bn in tax breaks for oil companies for activities such as exploration and drilling and to reinstate excise taxes used to help clean up federal Superfund environmental sites. The excise taxes expired in 1996 and would generate about $16.7bn over 10 years.

(6) On April 20, President Obama convened his Cabinet for the first time, and ordered its members to identify a combined $100mn in budget cuts over the next 90 days. That’s millions, not billions.

The long-term problem is that the federal government continues to expand nondiscretionary spending on more social welfare programs. These are open-ended commitments that are politically difficult to cut. They also create an unhealthy codependence as more Americans depend on the government, and politicians expect that the beneficiaries of government spending will keep them in office. In personal income, government social benefits were equivalent to 31% of wages and salaries in March. That’s a record high. During the 1960s, it was around 10%. By the 1980s, it was around 20%. The gap between these benefits and employee and employer payroll taxes to pay for them widened from nearly zero at the start of 2001 to a record $514.5bn in March of this year.

This morning, Bloomberg reports that the Social Security trust fund will run out of assets in 2037, four years sooner than previously forecast. Medicare’s hospital fund will be exhausted by 2017, two years earlier than predicted a year ago. The current Administration claims that their reforms of the health care industry will lower growth in health-care costs even as they push to make sure that all Americans have access to “affordable” health care. In a statement yesterday, Treasury Secretary Tim Geithner promised that after pulling off this miracle, the President will “build a bipartisan consensus to ensure the long-term solvency of Social Security.” David Axelrod, a senior White House adviser, said that Obama is “committed to a serious effort to confront that issue.” Good luck with that. Then again, it took a conservative president to recognize China. Maybe a liberal one can finally reform Social Security by imposing means testing. That should be popular with all the populists that support this Administration’s social welfare policies.

(H/T Yardeni Research)

It is settled: the JROTC stays

S.F. school board to vote on JROTC

A three-year battle over whether Junior Reserve Officers' Training Corps belongs in San Francisco schools ended Tuesday night with a 4-3 vote by the school board to restore the military leadership program weeks before its scheduled expiration.

More than 200 supporters and opponents of the program crowded into the school district headquarters to make their final pleas to the board. And their arguments were as emotionally charged as they were when the fight began in 2006.

"To some of you, this is a political issue," Balboa High School sophomore Malik Douglas told the board. "But to me it's a personal issue. Represent our opinions instead of yours."

Board members Rachel Norton, Hydra Mendoza, Norman Yee and Jill Wynns voted to keep the program. Jane Kim, Kim-Shree Maufas and Sandra Fewer voted against the program.

The board's vote reverses a controversial 2006 vote to get rid of JROTC in the city high schools. The armed forces, the board then argued, should not be in public schools, and the military's discriminatory stance on gays made it unacceptable.

The 90-year-old program was scheduled to phase out in less than a month.

I started following this story back in 2006 because I though it was pretty outrageous even by San Francisco standards. I went so far as to get into an argument via email with one of the original board members who was spearheading the effort to rid the SFUSD of any reminder of the hated military. Somewhat surprisingly, Dr. Dan Kelly did not win re-election to the board. That pleased me.

The story was again in the news at the end of 2007 when, not surprisingly, the school board failed to come up with a promised alternative to the JROTC.

Last year just before the November elections I was walking with my young daughter in front of my neighborhood grocery store and was accosted by an anti-JROTC woman after I stated I didn't agree with her and handed her back the flier she gave me. In true San Francisco fashion, there was a non-binding city measure on the ballot that if it had passed would have demonstrated to the world that the citizens of SF think war is icky so the JROTC should be banned from the school system. Thankfully, even the citizens of a city who overwhelmingly voted for Obama had enough sense to realize that the JROTC is an option that should not be taken away from our city's youth by thankless activist pacifists.

Since this once great state is crumbling under the weight of progressivist tinkering I'll take this story as a ray of sunshine on a stormy day.

Or maybe I'll just call it whip cream on dog shit.

The noose tightens

“You never want a serious crisis to go to waste — and what I mean by that is an opportunity to do things that you didn’t think you could do before.”--Rahm Emanuel

Today, governments around the world are taking power back from free markets, particularly financial markets, under the pretext that they have failed. In fact, the markets were hobbled by a combination of anti-market regulations and the lack of enforcement of regulations that leveled the competitive playing fields. In the US, the power grab is spreading to banking, autos, energy, and health care. Here is a brief chronology of recent developments around the world in this epic power struggle:

(1) It started with TARP, which was proposed by Hank Paulson and Ben Bernanke and enacted by Congress on October 3, 2008. This politicized the financial rescue program in the US. It gave the government the power to dictate how recipients must manage their companies. On October 13, Paulson forced nine major banks to take some of the TARP money even though most of them didn’t need it or want it.

(2) In December, Ken Lewis, the CEO of Bank of America, had buyer’s remorse after having agreed to purchase Merrill Lynch in mid-September. Mr. Lewis contends that Paulson and Bernanke also advised him not to share his second thoughts with BofA shareholders who were about to approve the deal.

(3) On February 26, the Obama administration unveiled its budget, which includes significant increases in spending on social welfare, especially health care. The resulting deficits are projected to total more than $9tn over the next 10 years.

(4) On March 30, 2009, the White House fired Rick Wagoner, the head of General Motors. The Obama administration is orchestrating the restructuring of the auto industry. President Obama declared that the US government stands behind GM's warranties.

(5) The government is pushing legislation aimed at bringing down credit card fees.

(6) The Obama administration is pushing to have student loans made by the government rather than private lenders.

(7) Democrats in Congress are moving to make the Obama administration’s health care proposals filibuster proof by pushing the proposed legislation as part of the budget reconciliation process.

(8) In Russia, the government is in effect nationalizing the industries that were once controlled by the oligarchs, who borrowed too much and must now be rescued by their comrades in the Kremlin.

(9) In China, the government is pumping large sums of money into infrastructure projects aimed at stimulating economic growth to offset the shuttering of thousands of manufacturers as a result of the plunge in exports.

(10) Governments are raising taxes, especially on high income earners. The Bush tax cuts will be allowed to expire at the end of 2010. States from New York to California are raising income tax rates and user fees. Prime Minister Gordon Brown’s government laid out plans on Wednesday for more than $1tn in deficit spending over the next five years, a scale of public debt that critics say is without precedent in Britain. In addition, his government now plans to hike the top marginal income tax rate from 40% to 50%, rather than to 45%.

(h/t Ed Yardeni Research)

The Black Hole of fiscal responsibility

I'll withhold the niceties: anybody that thinks government is a good custodian of your current and future tax dollars is a moron.

Congress needs Google to find out where stimulus money went

On February 14, with the passage of the American Recovery and Reinvestment Act, Congress shoveled $787 billion of stimulus money out the door. Now they're using Google to find out where it went.

During the stimulus debate, the bill's supporters stressed that it included strong oversight safeguards. But audits and reports are months, if not years, away. Oversight will be after the fact; right now, with the money actually beginning to flow, members of Congress have little or no idea where it is going. What, for example, is the Department of Housing and Urban Development doing with the $1.5 billion Congress approved for a new program called the Homeless Prevention Fund? Lawmakers don't know.

Read the whole thing.


"No man's life, liberty or property are safe while the legislature is in session."--Judge Gideon Tucker 1866

Congress and NASCAR

Here's a great idea. Every member of Congress should wear a one piece uniform emblazoned with the icons of their corporate sponsors:

Some people wear their hearts on their sleeve. Members of Congress should wear their sponsors on their chest.

This isn’t an original idea. About a month ago, a friend forwarded me a post that was making its way around the blogosphere at the speed of light:

“Members of Congress should be compelled to wear uniforms like Nascar drivers, so we could identify their corporate sponsors.”

Great idea. Just imagine what that would look like.

Senator Chris Dodd, Democrat of Connecticut and ethically challenged head honcho at the Senate Banking Committee, files into a congressional hearing room, wields his gavel and calls the committee to order. The dress code is business casual: collared shirts, no jacket required.

Dodd is sporting a pink Lacoste shirt, with his “endorsements” emblazoned across his chest in large, black letters (the corporate logos go on the back):

  Citigroup Inc.                $428,294
United Technologies           $380,550
Bear Stearns                  $347,350
American International Group  $281,038
Deloitte & Touche             $270,220

And that’s just a list of Dodd’Top 5 lifetime contributors, according to the Center for Responsive Politics.

The list goes on: Goldman Sachs, Morgan Stanley, JPMorgan Chase, Merrill Lynch and Lehman Brothers.

From a company's standpoint, investing in a politician delivers a far higher return on investment than any other investment vehicle out there:

The companies that have been awarded taxpayers' money from Congress's bailout bill spent $77 million on lobbying and $37 million on federal campaign contributions, The Center for Responsive Politics finds. The return on investment: 258,449%.

Where does a regular guy like me find a ROI like that?

The New Republic has an article today that does a good job of naming a few of the more egregious hypocrites alongside their doublespeak who are currently serving in the 111th Congress.

There's that saying...

Oh you know the one, something about pictures and what they're worth in words...

Budget deficit: past, present and future (source: Wapo)



This one has words and pictures. That doubles its value!

It wouldn't be a day...

...without tax evaders in the news:

California Congressman Calls Maryland Home to Gain Tax Credit

Representative Pete Stark, the second-ranking Democrat on the Ways and Means panel, in 2007 and 2008 saved a total of $3,853 in state and Anne Arundel County taxes on a Maryland waterfront home that he claims as his primary residence, according to Maryland tax disclosures.

Homeowners in Maryland qualify for the tax credit for residences they use “for the legal purposes of voting, obtaining a driver’s license, and filing income tax returns,” according to the Maryland Assessment Procedures Manual.

Stark, 77, confirmed in a telephone interview last week that he and his wife, Deborah, are registered to vote in California’s 13th congressional district using the address of her parents in San Lorenzo, about 25 miles southeast of San Francisco. Stark also said both he and his wife have California driver’s licenses.

I have an idea. Why doesn't Pete Stark go back to Maryland and stay there, and quit pretending to speak for the people of California? He can take that other carpetbagger from Maryland, Nancy Pelosi, with him.

Lawmaker: TARP Companies Owe Back Taxes

Of the 23 top recipients of government capital through the Troubled Asset Relief Program, 13 owe unpaid federal taxes, a U.S. House oversight committee reported Thursday.

House Ways and Means Subcommittee on Oversight Chairman John Lewis (D., Ga.) said the companies owe a combined more than $220 million in unpaid federal taxes. Of those companies, two owe more than $100 million each.

Rep. Lewis accused the Treasury of engaging in poor documentation practices by failing to ask companies to prove they didn't owe federal taxes, a requirement for government aid.

It seems the House Ways and Means Committee has its hands full these days. Not only can at least one member not live up to the standards they are supposed to apply to others, they can't even do the job they're paid to do. Sounds like they deserve to be a part of the AIG bonus pool.

In other news, Intrade is currently predicting a >20% chance that Tim Geithner will leave his post at the Treasury Department before June, and a 33% chance he'll be out before the year ends.

The Dodd Amendment

I do believe that the Obama administration and his congressional enablers finally have a plan in place to remove the last vestiges of faith in the federal government any of us may still harbor exempt their campaign contributors from having to take unsavory responsibility for their bad business decisions:

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.

He was for the bonuses before he was against them. John Kerry would appreciate that. Also, it's pretty rich that they want to "tax" these bonuses. As the tax laws already stand the federal government will get about 35% of the gross amount. And depending on what state the recipients live in, they'll be lucky to see 55% of the gross amount after the local governments are through.

Dodd’s original amendment did not include that exemption, and the Connecticut Senator denied inserting the provision.

"Idunnoitwasn'tme!" Classic 3rd grade denial.

“I can't point a finger at someone who was responsible for putting those dates in,” Dodd told FOX. “I can tell you this much, when my language left the senate, it did not include it. When it came back, it did.”

Of course he can't point a finger. If he did there would be three pointing back at at him. I bet even Senator Dodd can understand that 3>1.

This explains a lot (click to enlarge):




The WSJ has an editorial today that gets to the heart of the matter:

The Washington crowd wants to focus on bonuses because it aims public anger on private actors, not the political class. But our politicians and regulators should direct some of their anger back on themselves -- for kicking off AIG's demise by ousting Mr. Greenberg, for failing to supervise its bets, and then for blowing a mountain of taxpayer cash on their AIG nationalization.

The best insurance policy AIG ever invested in was political donations to the left side of the aisle.

UPDATE 3/19/09: Dodd admits Role in AIG Controversy

Why does this guy still have a job?

AIG's earmarks

The latest outrage washing across the political landscape is over AIG's decision to honor a commitment to pay out $165 million in bonuses to certain employees. Obama has said that he will "pursue every single legal avenue to block" the payout.

At issue are retention bonuses for employees of AIG's financial-products division, whose credit default swaps brought AIG to the brink of collapse. The government controls AIG through an 80% equity stake and as a major lender and doesn't have legal authority to freeze payments on its own. The U.S. has committed $173.3 billion to AIG, including $70 billion from Treasury's rescue fund.

I see no difference between this and the earmark-laden bills that regularly get passed through Congress with nary a peep. Now that AIG is a de facto government owned entity, the bonus payments--just like earmarks--are a form of patronage. We already know how Obama feels about the AIG earmarks, and he has repeatedly said he is against all earmarks, though it seems that some earmarks are worse than others. Namely the ones that originate in Congress are OK, but the ones that originate in the private sector are not. Seems he's just blowing hot air of out his yapper.

Lest you think that the banks who have taken TARP money are going to sit still and let the government dictate a new, equal and just pay structure, think again. Reminds me of a beggar with a stick.

For the record, I am against all earmarks and all bailouts. Does anybody think that AIG would be paying bonuses if they'd been allowed to go bankrupt?

The wisdom of Ogden Nash

In honor of our new socialist overlords, I though I would share a poem that was written during another era that has an increasing number of parallels to today; an era known as the Great Depression.

One From One Leaves Two

Higgledy piggledy, my black hen,
She lays eggs for gentlemen.
Gentlemen come every day
To count what my black hen doth lay.
If perchance she lays too many,
They fine my hen a pretty penny;
If perchance she fails to lay,
The gentlemen a bonus pay.

Mumbledy pumbledy, my red cow,
She’s cooperating now.
At first she didn’t understand
That milk production must be planned;
She didn’t understand at first
She either had to plan or burst,
But now the government reports
She’s giving pints instead of quarts.

Fiddle de dee, my next-door neighbors,
They are giggling at their labors.
First they plant the tiny seed,
Then they water, then they weed,
Then they hoe and prune and lop,
They they raise a record crop,
Then they laugh their sides asunder,
And plow the whole caboodle under.

Abracadabra, thus we learn
The more you create, the less you earn.
The less you earn, the more you’re given,
The less you lead, the more you’re driven,
The more destroyed, the more they feed,
The more you pay, the more they need,
The more you earn, the less you keep,
And now I lay me down to sleep.
I pray the Lord my soul to take
If the tax-collector hasn’t got it before I wake.

Ogden Nash

"History doesn't repeat itself, but it does rhyme."--Mark Twain