The Grimm Truth

Remember DOW 36000 Was Not A Cruel Joke?

As you shed a few tears over the remnants of your 401(k), think back to the last century. The last year of the last century, when a couple of rather optimistic economists from the American Enterprise Institute authored an uplifting bit of prophecy for the Atlantic Monthly.
Here’s the key paragraph:

“Stocks are now, we believe, in the midst of a one-time-only rise to much higher ground—to the neighborhood of 36,000 for the Dow Jones Industrial Average. After they complete this historic ascent, owning them will still be profitable but the returns will decline. You won't be able to make as much money from them each year. We believe that in the meantime, however, astounding profits will be made.”

James Glassman and Kevin Hassett added:

“The stock market is a money machine: put dollars in at one end, get those dollars and more back at the other end. The history of these remarkable returns is vivid and undeniable, yet few investors seem to be able to make it out in the fog of hourly jabber and the haze of constant fear, and many experts seem always to draw from the past the lesson that stocks are headed for a fall.”

Talk about “haze of constant fear.” Try reading today’s Wall Street Journal.
Glassman and Hassett went on to write their famous book, DOW 36000 : The New Strategy for Profiting from the Coming Rise in the Stock Market, a $18.95 offering from Random House in 1999 that I found on Oogle.com Saturday for $1.75 -- a devaluation not much worse than the DOW's performance over these last eight days.

The Truth? You Can't HandleThe Truth. And They Don't Dare Say It.

    The presidential candidates debated the economy Tuesday night. Just not this economy.

    Both Barack Obama and John McCain clung to campaign themes conceived in another time, another place. Not the nation and world sinking into the most profound economic collapse since the Great Depression. Not the nation and world in which we reside.

    Of course, both men know that they’re essentially competing to be captain of the Titantic. But they can’t let on. It’s as if the American public, like a giant gaggle of grade school kids, must be protected from all unhappy truths.

    One big, fat unhappy truth is that their high toned talk about medical plans or helping out veterans or tax breaks or rebuilding the military or reforming education and all that – can’t be done.

   There won’t be any money. The coffers are empty. The budget is shot. Our financial institutions have either frozen or fallen. We’re trillions in debt, bogged down in two expensive wars, and praying that China doesn’t foreclose.

    It would have even been disingenuous if either of the candidates had feigned a bit of straight talk and suggested that American might be asked to make some sacrifices. Truth is, sacrifice, these next months and years and maybe even decades, is not going to be a voluntary concept. Sacrifice is about to be our hot new lifestyle.

     Our financial problems have spread to Europe and Asia and bounced back again like an echo, bringing with them the most dismal years of our lives. It’s not only about to turn very bad for us. What we’ve done to our children’s prospects - thanks to our giant ho-down of deficit spending and broken economics and neglected education, is unspeakable.

    But, judging from the fantasy discussion Obama and McCain held about an economy that vanished from the known universe weeks ago, their campaign strategists have decided to ban any talk of truth. Truth, in times like these, would not be a winning strategy.

The Heartland Hates The Feds All The Way To The Bank

For those of us who reside outside the boundaries of such a blessed place, we can only hang our heads in envy and shame and wonder exactly what characteristics residents of that Other America boast that makes them so morally superior to us in the godless nether regions.
Sarah Palin reminded us, once again, that we were outsiders in the real America. She talked of the Heartland. Palin invoked the great political myth that Americans who reside in the northeast or Southern Florida or the big old industries cities of the Midwest or the west coasts with its computer geeks and movies stars and all those immigrants, were of a lesser place.
The Heartland is about the Old South and the praire states and the West, as long as you don’t go too far west. Alaska, despite a geographic placement that makes it more of an appendage than a heart, gets a special dispensation with its meager population and great affection for shooting wild animals.
But the unifying theme of the Heartland is a disapproval of that meddling federal government. Sarah Palin’s Heartland hates the federal government. They stand, instead, for rugged independence from that Washington mess.
They disparage, most of all, how those city folks back east waste their money.
Of course, they don’t mind federal spending so much when it comes packaged as farm subsidies or highway funds. In fact, when it comes to federal taxes, the Heartland gets a hell of a lot more they it gives. They get more money for highways and agricultural. They get 50 cents a gallon for their ethanol. And they get gobs of money to combat terrorism in places that Osama Bin Laden couldn’t find with a map.
Sarah Palin’s Alaska, for example, receives $1.80 back for every dollar it pays into the federal treasury. Those fiercely independent, anti-federal government folks from Montana and Utah and Wyoming and Idaho and Nebraska and the Dakotas and Oklahoma and Iowa all get more out of the federal budget than they put in. The same is for true most of the old Confederacy – Mississippi, Alabama, South Carolina, Tennessee, North Carolina, Arkansas, Virginia - according to the Tax Foundation.
Florida – half Heartland, half displaced Yankees - does slightly better than break even, getting $1.01 back for every $1 put in.
Those despised liberal northeasterners don’t get much bang for their buck. New Jersey gets 63 cent on the dollar, New York gets 84 cents back, Connecticut gets 73 cents and Massachusetts gets 82 cents. The lefties along the West Coast, California, Oregon and Washington, are all classified as “donor states.” And the progressive states in the Midwest, Illinois, Michigan and Minnesota, likewise get screwed by the tax distribution formula.
Perhaps the reason the folks out in the Heartland can rail so much about government is that -- given the way they feast at the federal trough – they can afford to.

Wall Street Fixes The Immigration Conundrum

If the forbidden word “immigrant” passes through the lips of Barack Obama or John McCain lately, it’s emitted as a hurried, barely discernible mumble, the way an errant husband might not wish to make it quite so clear, without actually lying, that his sexy young secretary will be accompanying him on his next business trip.
Just a year ago, it seemed that illegal immigration would be the divisive and decisive issue in the presidential campaign.
Among the Republicans, one candidate, U.S. Rep. Tom Tancredo of Colorado, was running exclusively as the tough guy who would get very tough – on uninvited, undocumented foreign workers pouring across our borders.
Anybody seen Tom lately? At the Republican National Convention, Tancredo was apparently locked in the attic, like crazy Aunt Tilda.
Immigration, the giant scary talking point of 2007, fizzled in 2008, though echoes of the Republican’s unkind utterances cost the party a sizeable percentage of the strategically important Hispanic vote. (It must have been a relief that immigration faded from campaign speeches to Republicans in South Florida, who would rather not remind the nation of the peculiar two-tier wet-foot dry-foot policy toward illegal immigration nurtured hereabouts – very friendly to Cuban refugees, very unfriendly to others.)
Democrats, meanwhile, were perfectly happy staying mum, anxious to keep their Hispanic faction happy but not wishing to remind disgruntled, struggling industrial belt Democrats that they were all a part of one big rainbow coalition.
Immigration went away.
And apparently, so did the immigrants.
The Pew Hispanic Center reports that the influx of illegal immigration has dropped 25 percent. And the Wall Street Journal reported today that thousands of undocumented immigrants residing in the U.S. but unable to find work, are returning home.
Our cadre of super-brilliant investment bankers on Wall Street may have cost us hundreds of billions of taxpayer dollars to clean up the remnants of their big party, but give them credit. They solved the one issue that had befuddled the nation’s leading politicians.

Next Debate, Bring The Defibrillator

It was bizarre but irresistible. CNN televised the great debate Friday night with a running graph along the bottom of the screen purporting to measure audience reaction. The red line for Republicans, blue for Democrats and green for indies.
Supposedly, when one faction or another scored debate points their corresponding line would spike like the Dow hasn’t done in weeks.
It said something about the tenor of the exchange that the graph flat-lined for most of the debate. If a hospital patient had been attached to that monitor, a team of doctors and nurses would have rushed into the auditorium armed with defibrillator paddles.
McCain jabbed but Obama for the most part refused to counter punch. I kept hoping, as McCain talked about his career-long crusade against graph and corruption, for Obama to dredge up the Keating Five S&L scandal, which has enough resemblance to the currently banking mess that it would even sound vaguely pertinent.
Obama wouldn’t. He took the punches with an incessant half-smile. It was maddening to watch. His rope-a-dope strategy probably was sensible politics, particularly for a fellow who wants to avoid looking like the so-called “angry black man,” but geez, it robbed the encounter of its entertainment potential.
Why not turn it into a mindless fight? It wasn’t as if either candidate had the courage to tell Americans that our economy is screwed nearly beyond repair and that no matter who wins, they won’t have any money to pursue their pet projects. Or that the Russia incursion in Georgia was not the simple, unprovoked display of totalitarian cold war aggression both candidates described. Or that to most of us, the difference between “preconditions” and “preparation” before meeting with the Iranian leadership sounds, well, not worth arguing about.
CNN needs to add another line, to measure those of us not particularly interested in watching a couple cordial fellows feigning substance – a purple line for bruises, kicks, ear biting points. You know, something for us empty headed Americans warming up for a big hard-hitting football weekend.

If You Break It, You Get a $700 Billion Bail-Out

    The giant Wall Street bailout has touched off a cascade of outrage among us common folk. Dolores Kantrowitz of Miami Beach, responding to my column about the $700 billion gift to investment bankers, captured the prevailing sentiment nicely in an e-mail despairing that “that all crooks go unpunished.’

    “Enron, the President, Republicans and Democrats alike - get
a slap on the wrist when they are naughty."

       But why not require them, Kantrowitz suggested, to give back “all the money they stole. This is what I taught my children - if you break it you replace it. If you steal it you
return it or if you already used it - pay for it with an apology.

      “Why are the crooks getting a slap - a minimum fine? If they go to prison it is a
white collar country club.   
        “Every one of us is to blame. I know that. It’s the Me society
and the heck with you.  Someone has to cry out until it sinks in.”

      Frances Griffith, a regular correspondent, was equally adamant:

      "Since I am a taxpayer, paying for my house on time, paying all of my taxes on time, paying all of my other bills on time, including paying off my credit card every month, I think that when I become an owner on Wall Street I should be a voting member of a Board of Directors that will vote on all decisions including golden parachutes and bonuses.

       "My resume includes the fact that I have bought and sold several houses without ever defaulting on a loan. Also, most years of my life I've had a budget and lived within it. I think those two things alone should be great qualifications.

       "I don't think I should be the only one. I think all of the CEOs and Board members should have to have those qualifications," Griffith wrote.

       Law Professor Donald Jones wrote:

        "We need to rescue  the victims, the working families who are loosing their homes, not  the perpetrators of  the crisis.  There are 10,000 foreclosure filings a day in the United States.  This is the economic equivalent of a tidal wave which threatens to  sweep away all prosperity.  The federal government needs to massively restructure loans , lowering  the cost of loans to borrowers.  This massive restructuring will stop the  wave.   Once the tidal wave of  foreclosures has been stopped the housing market will    recover, though at more affordable prices and  in  turn the majority of financial institutions will recover.  This bears a resemblance to policies of debt forgiveness that the federal government used during the depression.   This kind of government intervention is strong medicine but it is less radical than Paulson's own  form of  corporate socialism."

        Jones was just getting wound up:
      
        "Secretary Paulson's alternative  will likely leave the struggling homeowners to continue to drown in the flood of foreclosure.   In our system those who take the risks reap the rewards or take the consequences.  Paulson's proposal changes the rule of  individual responsibility, which the republicans love to talk about, at  taxpayer's expense.    In Bush's words, Wall  Street  got drunk,  and Paulson's proposal is for the tax payer to  pay the tab for its carousing .   As wall street  outstretches its palm for yet another handout the American people should say to them what the Republicans say to the urban poor,  'work  not welfare.' "
      
       My good friend a Slats was blunter yet in his evaulaton. "Do you think that before Hank Paulson gets his check without any restrictions or recouse in how he spends it, just ONE PERSON might suggest that this is the last chance Bush and Cheney have of making all their big spender buddies happy."

Cheap Labor Doesn't Come Cheap In Florida

Roy Blocker's words would have been unthinkable if he had uttered them anywhere in the volatile vicinity of the Miami-Dade School Board. “The school district has gotten cheap labor for a long time in this position,” Blocker told the Orlando Sentinel.
The pittance earned by Blocker, the Orange County Superintendent of Education, comes to about $298,756 a year. The Orange School Board tossed in another 20 grand this year as a bonus for doing a nice job.
Miami-Dade reportedly will pay Alberto Carvalho $275,000 to run the state’s largest school district. That’s more than the national average $200,751 earned by supers heading up districts of 25,000 or more students. But it’s considerable less than the $311,000 earned by Bill Vogel, who runs the Seminole County Schools. No wonder Blocker feels under paid.
Carvalho, who is negotiating his contract with a board that can’t agree on the weather without a smack-down fight, probably feels underpaid compared to his central Florida counterparts who head smaller and considerably less challenging school districts. Or, for that matter, compared to Broward Superintendent Jim Notter who was hired last year for $290,000 a year.
But my advice – free advice (Alberto can think if it as the only bonus he's likely to see this year) - would be that Carvalho should avoid referring to his work for Miami-Dade schools as words “cheap labor.”
Unless he gets an offer for the top job in Seminole County.

County Cracks Down On (Green) Illegal Aliens

Iguanas are now officially designated “reptiles of concern” in Broward County. For all the effect it will have, the county commission might as well designate the Irish as “immigrants of concern.”

Green iguanas are running amuck. They’re breeding like bunnies. They’re taking over docks and bridge abutments and feasting on hibiscus shrubs and other expensive landscaping. Broward has done a better job of creating an environment amenable to iguanas than, say, creating an attractive beachfront for the high end tourists supposed to fill the new $800-a-night hotels along Fort Lauderdale shore.

It’s too late. The new rules likely to be adopted by the county commission would regulate the sale of pet iguanas, which county commissioners worry will be released into the wild once owners tire of the voracious lizards. But the descendents of former pet iguanas have spread so fast across South Florida that some scientists now consider their breeding ground a reliable measure of global warming. As the climate warms, the lizards extend their habitat further north along the Florida peninsula.

The commission would do better policing the sale of other exotic pets with the same potential to breed and adapt to a subtropical climate. All manner of snakes, lizards and turtles could be kept out of the wild, if the county or the state cracks down now. Before it’s too late.

But anyone with a boat dock along the Intracoastal Waterway can tell you that, when it comes to iguanas, the county commission is trying to close the barn door long after the lizards moved in.

If I Can't Come Back, I Ain't Going

The post storm order was as predictable as the power outages. “Do not return until you are told that it is safe!”

We’ve all heard variations of the same pronouncement. A weary emergency operations chief, in obvious need of sleep, stands before a thicket of microphones and TV cameras, telling those folks who evacuated before the storm that they can’t go home, though the storm has passed. Not yet. Not until officialdom deems it is safe.

This time, the official spoke with a Texas accent. He was talking about Galveston. But we’ve heard similar orders issued all along the Gulf and Atlantic coasts in the days after a hurricane.  The problem, of course, is no public official can bear taking responsibility for the risk facing residents coming back into their rubble-strewn neighborhoods.

Understandably, public safety officials look at that anarchic mess and see a myriad of potential hazards. What residents see are all of their worldly belongings exposed to rain and looters. And they see police roadblocks between themselves and their homes.

This tension can drag on for days, even weeks. Public safety officials who spend so much time planning on how to evacuate residents from a vulnerable area spend too little time figuring out how to get folks back home. It’s a neglected consideration in public policy that has become an important factor in evacuation decisions.

The difficulty of returning, of slipping past those inevitable police roadblocks, to check on the state of my house, my dogs, my neighbors, has become a major factor on deciding whether I’d evacuate in the first place. All those harping newscasters and mayors and fire chiefs saying, “No, it’s not safe yet to go back,” is trumped by the voice in a homeowner’s head. “This is my home. This is all I’ve got. The damn storm is gone. Who the hell are you to tell me I can’t go home?”

Putting Lip Gloss On Preemptive War

   

    Hey. I'm from West Virginia. I ain't no ivy-educated elitist. But I know a little something about the Bush Doctrine.

    Maybe I'm asking too much, but I'd sort of like us to have a president - or the vice president of a 72-year-old cancer-survivor - to know more about foreign policy than I do.

    Let me take it a step further. I’d prefer one of those smarty-pants elitists. As long as we’re hiring someone to pull off the complex job in the universe, why not go with one of those guys who was studying hard, dazzling the teachers, making the law review, doing all the serious stuff while the rest of us were in hard pursuit of life’s temporal pleasures.

     But apparently, 2008 is shaping up to be a bad year for the brainy set what with their tendencies to give nuanced answers to complex questions. Nothing drives the electorate crazier than intellectuals who get all bogged down thinking about long-range consequences.

    In her first sit-down interview on ABC Thursday, Sarah Palin’s scripted answers didn’t quite fit the questions but I doubt that hurt her election prospects one bit. What Americans are looking for, in a president or vice president, is someone who’ll shoot first and think later. Come to think of it, that pretty well sums up the Bush Doctrine.