views from the Bay Area
7th July 2010: In April 2009, a US Court of Appeals ruled that the safety regulations governing offshore oil drilling in American waters were dangerously inadequate. The court ordered the relevant government agency, the Department of the Interior, to formulate far more stringent safety requirements on offshore oil drilling rigs. Plus, the court ordered the feds to decline all pending applications for offshore drilling permits in deep water. Also, the court ordered the feds to refuse lease renewals for existing deep water oil rigs then in operation.
The bureaucrats in Interior were panicked. Royalties from the oil companies engaged in offshore drilling constituted a large part of Interior's operating budget. They appealed to the executive branch, and the Obama administration agreed with Interior's position. Under intense lobbying pressure, the court caved in. The original court ruling was reversed. The tough new safety regulations were never enacted and enforced.
And so we see another example of the focus on the almighty dollar, together with the concomitant disregard for related risk, bringing about a calamitous outcome. If only the gutless Appeals Court had stuck to their guns, refused to buckle under pressure, the mess in the Gulf of Mexico would never have happened.
23 June 2010: Yesterday Russian President Medvedev hobnobbed with the governor and various CEOs of high tech companies in Silicon Valley. The Prez wanted advice on how to establish a Silicon Valley in Russia. One bigwig who did not attend was Sergei Brin, the billionaire co-founder of Google and a Russian emigre. Asked why, he said Russia is "Nigeria with snow" and "run by criminal cowboys."
There's something charming about pungent opinions, don't you think?
22 June 2010: The foolishness of bankers reminds me . . . Forty plus years ago when I had an office, a secretary and embossed calling cards, bankers were a damn sight more prudent.
How the past generation or so could have so degenerated to such complete lack of acumen among the banking fraternity . . . well, it baffles me. But one thing is very clear; the inventor of that insidious mechanism, the securitization of bundled mortgages, is much to blame. An astounding number of bankers, both investment and commercial, fell for the specious logic that a bond or debenture mitigated risk. That it made inspection of the underlying assets less important, or even entirely unimportant.
Such an attitude is simply suicidal, as has been amply demonstrated
1st June 2010: Each year when June rolls around I am reminded of an old song. It begins...
"Memphis in June
And Sweet Oleander
Thru the air.
Memphis in June
And old Aunt Amanda
Sittin' in her
The opening lines of one of Hoagy Carmichael's songs. Hoagy was a Southerner and loved Memphis. Mostly forgotten today, he was at one time America's premier composer of plaintive and nostalgic popular songs.
When a soldier in 1948 I spent a weekend pass in Memphis, gawking at its magnificently rococo public buildings and its lovely antebellum mansions, decrepit but still stunning. Memphis was pretty much a 19th century time capsule and quite beautiful. At that time.On a trip to the east coast a few years ago I again passed thru Memphis. I didn't recognize it. Today the city is laced with freeways and dominated by tall office buildings which have about as much architectural appeal as a milk carton. The city has a tattered look. A thing of beauty is not necessarily a joy forever.
5th May 2010: I'm pretty sure you've never heard of SCN Strategies. Few people in San Francisco have either, although they're based in the city. SCN (the first letters of the surnames of the 3 founders) are political consultants. They were hired by Kamala Harris when she ran for District Attorney of SF...she won. They were hired by Gavin Newsom when he first ran for mayor of SF...he won. They were hired by Barbara Boxer in her first run for the US Senate. She won and was re-elected.
SCN specializes on advising candidates for public office during the campaign season. Their focus is especially on televised debates consisting of more than 2 candidates. Guess who hired SCN recently?
Nick Clegg, the LIbDem candidate for PM. And the stellar performance of young Nicky gave him, it appears, an actual shot of defeating the default winner, the Tories Cameron. If that actually happens, SCN's reputation will rise into the stratosphere.
22nd April 2010: I have a lifelong habit of reading newspapers, usually at least two per day. A two column news item will give you a helluva lot more information about some topic than a 30 second sound bite delivered by a talking head on the 6 o'clock news.
The Japanese postal system is one of the largest financial institutions on Earth..3.3 trillion dollars in assets. The Japanese are generally wary of banks, and with good reason. In the 1980s those banks went on a lending spree that to this day has not been fully digested. Now the PO wants to expand their remit...enter other financial fields, compete with banks. You can imagine the howls of protest from Mitsui, Bank of Japan, et al.
Kazuo Inamori, a name you probably never heard, has taken over leadership of Japan Airlines. JAL is like most of the big carriers all over the world...swimming in red ink because of the overcapacity of airlines globally. He says he will apply Buddhist principles to get JAL back on its feet. He is, by the way, an ordained Buddhist monk.
And today General Motors paid back the feds all those billions they got from TARP. Obama's $700+ billion corporate bailout program. It should be noted, however, that Ford took no TARP money, and in the past 14 months has seen its share price increase nearly 800%. Draw your own conclusions about the relative merits of GM and Ford leadership. (TARP means Troubled Asset Recovery Program)
What about those privacy policies touted by the internet giants? Google bailed out of China, remember, because the Chinese bureaucrats wanted more information than Google was willing to provide. Since then, Google has revealed that our own federal government has often asked for data which Google considers proprietary or covered under the privacy policies. Also, Amazon is being sued by the state of North Carolina. That state believes they are being cheated out of sales tax revenue, which is certainly possible. What will Google and Amazon do? Answer pending.
5th April: The other shoe dropped yesterday. The Toyota manufacturing plant in Fremont (a nearby suburb) shut down for good. 4,700 workers join the army of unemployed Californians. Each got a severance check, mostly between $20,000 and $40,000. That'll keep them afloat for a few months, but after that their prospects are grim. Also, the several dozen suppliers to the factory will be devastated, their workers laid off. Another 10,000 to 12,000 employees will lose their jobs. The unemployment figures in this state hover around 12%. It is annoying to hear economists and politicians make optimistic remarks about the so-called recovery from the present recession. For the millions of out of work Californians, this is sheer bullshit.
1st April: He was the 18th holder of his Irish baronial title. He had a younger brother, Admiral the Honorable Reginald Aylmer Ranfurly Plunkett- Ernly-Erle-Drax, a name so ornate even P G Wodehouse would not have dared to invent it.
Lord D. was superficially conventional. He went to Eton, loved fox hunting, married an earl's daughter, lived in a castle, served in the Coldstream Guards.
But was more than somewhat tetched, I suspect. His fiction was more than bizarre, it bordered on the surreal. If that kind of escapism appeals to you, at least occasionally, you could hardly do better than read The Blessing of Pan. A very English-style novel, but far beyond the horizon of the ordinary. After gathering dust on my bookshelf for 40 or so years, I got the book out and re-read it last week. Coherent, credible, but my god...what an imagination.
16 March 2010: Politics...a major spectator sport in California. We are electing a new governor this fall. The primaries (election of candidates on the major party tickets) come up in June. The most prominent names of the wannabes at this point are Meg Whitman and Jerry Brown.
Brown is a long time player. Governor back in the 1970s. Ran against Jimmy Carter for the Democratic nomination for president in 1976 (and lost, of course). Later Attorney General, mayor of Oakland, the list goes on. His nickname in the '70s was Governor Moonbeam...his behavior as governor was more than a bit strange. He's a Democrat.
Meg Whitman is a billionaire former boss of eBay. Hard nosed Republican. Frankly hostile to labor unions, a remarkable stance for a big time politician. Since she is financing her own campaign, the laws about campaign contributions are moot for her; she can (and is already) run ads for her candidacy in any form and with any content she pleases, and it is plain she favors a no holds barred contest.
It is not certain at this point, but the odds favor Brown and Whitman winning their primary contests. Their rivals are too little known and too poorly financed to put up a serious fight. All this portends a hard fight between June and November. Brown, an old pro at the game, against a rich and aggresive opponent who will likely stop at nothing.
At a lower level, the mayor of San Francisco, Gavin Newsom, is running for lieutenant governor. A few weeks ago he planned to run for governor, but realized his chances against such large caliber opponents did not favor him, so lowered his sights a bit. He's a pretty boy (looks like a gigolo) perfectly coiffed and with a toothy smile. Strictly an amatuer when it comes to politics, but backed by Gordon Getty, an SF billionaire. Newsom plainly believes that he can eventually run for the presidency. He's not yet 40.
10 March 2010: You probably never heard of Okbert Issing. He used to run the European Central Bank. Yesterday, consulting with PM Merkel of Germany, he advised that the EU not bail out the profligate Greek government.
I was a bank VP back in the '60s and knew bankers from banks large and small. I noticed the the bigger the bank, the more reckless the bankers...fond of chasing the quick buck and never mind the greater risk. Guys like Issing, bankers with a serious regard for fiscal prudence, seem to be a vanishing species.
Will the Germans heed this wise banker? Don't hold your breath.
20 February 2010: There's hardly anything more soporific than economic statistics, but here's one that caught my eye yesterday. In the most recent quarter, the US economy grew at an annual rate of 5.7%. The EU figure for the same period was 0.4%. Despite the meltdown of the American housing market, despite the horrible unemployment figures, despite the profligacy of our federal government, the power of the US economy overcomes all and posts a vigorous growth rate.
14th January 2010: Back in September I told you about the New York federal judge throwing out the proposed settlement offered by Bank of America, with the blessing of the Securities and Exchange Commission, to ameliorate the ripoff of $3.6 billion by the stockbrokerage Merrill Lynch which took place just days before ML was purchased by BofA. The judge was outraged by the paltry offer — $33 million, which was slightly less than one dollar for each $1,000 pilfered by ML executives as "bonuses" for themselves. Plus the fact that it was going to be BofA stockholders who would be soaked for the cost of the settlement, not the ML executives who made off with the loot. The judge demanded that the SEC reopen the matter and make a better settlement.
In today's paper there appeared a news item that the SEC would do so. In the same announcement, by the SEC, it was also stated that no individual in either ML or BofA would be prosecuted or re-payment demanded. Thieves, in other words, can rest easy. Which means that when settlement is finally reached, the same poor chumps will bear the cost of whatever settlement is agreed on...namely, the stockholders in BofA.
I wonder what words that New York judge would have to describe the spineless Securties and Exchange Commission. Probably not printable.
27th December 2009: As the first decade of the 21st century approaches its end, I'm wondering...can the second decade be as harrowing? As bad as the first?
We had the twin towers in New York demolished, thousands of casualties. We saw New Orleans devastated by Katrina. Then the strongest earthquake ever measured set off a tsumani that killed 240,000. And those were just the highlights of the opening decade, century 21. Doesn't even consider the endless misery of Iraq, Afghanistan, Darfur, etc.
Call me a pessimist, but it appears to me that decade number two will be even worse than the first one. And one of the biggest reasons for this is...water.
Wars hereafter will be less and less about religion and real estate, as in the past. They'll be about water supplies. The people (and governments) that depend on water supply are often not the people who control that particular supply...a made to order bone of contention in a world of rising populations and falling water supplies. Look at Jordan. It controls the Jordan river which downstream supplies Palestine and Israel...three nations which are not exactly bosom buddies. The American southwest is on the brink of big trouble because the demands on the Colorado River just keep expanding every year. I asked my old pal Michael if he was worried about living in Tucson. Not a bit, he said. Americans are wastrels by nature and people in places like Las Vegas and Santa Fe are going to learn the hard way the price of their short-sightedness. And this will happen in less than the next ten years, I'll wager.
It's no better elsewhere. Maybe even worse. Look at Pakistan. Border with India is partly the Indus River, one of the major water sources for Pakistan. And the headwaters of the Indus are in India. And what is India doing? Building hydroelectric dams as fast as they can on the Indus and on other rivers. What happens when two nuclear powers come to blows over water supplies? You don't want to be in the neighborhood, would be my advice.
And then there's all that chatter about the End of Days in 2012, and the Bible Code prediction of a giant earthquake in Los Angeles, stuff like that. Shrug it off as the work of crackpots, unworthy of serious attention. Maybe so, but I'm not so sure.
So I read the morning paper and find uplifting stories about people working to reduce the 'carbon footprint' of their community, or petitioning local governments to declare more "Clean Air Days" (meaning that you can't use your woodburning fireplace) when smog levels exceed some arbitrary limit. And I think that's all very nice, but consider this...California is in the midst of an extended drought. The state is dry as a bone, and come next forest fire season (summer and fall) I predict this state will suffer forest fires of epic proportions. Many fashionable California communities are heavily forested. A year from now, some of them will no longer exist. Thinking about this, it seems a bit absurd to rat out your neighbor to the cops because he used his fireplace on a Clean Air Day.
10th December 2009: If any one person could be identified as the creator of blues as a genre of popular music, that person would be Jim Handy. Lived about a hundred years ago. A drifter, poor all his life, but a musical genius. His most famous song, the St Louis Blues, has long been a favorite of mine. Like St James Infirmary it is peerless.
But for years I wondered about the odd disconnectedness of the lyrics of St Louis Blues. It begins..
Feelin' tomorrow like I feel today
Feelin' tomorrow like I feel today
Gonna pack my grip and make my getaway.
Then there follows the main body of the song...
St Louis woman, with all her diamond rings
Leads her man around by her apron strings
and so forth.
That puzzled me. Why do those opening lines, so unrelated the rest of the lyrics, appear in the song?
I've been to St Louis. It sits on the banks of the Mississipppi River. In the late 19th and early 20th century, St Louis was the third largest city in America, a commercial beehive because the river was the main throughofare of US commerce...the days before railroad networks and good roads. In St Louis, the banks of the river are paved with cobblestones, round rocks about the size of a grapefruit.
One day, reading the liner notes of a recording of Handy's music, I found the answer to the puzzling question. At one time, about the age of 40, Handy worked as a stevedore on the docks of the river in St Louis. Being dirt poor, Handy could not afford even a cheap hotel room at that time. So he slept on those cobblestones. Can you imagine anything more uncomfortable?
After writing the song, according to those liner notes I read, Handy tacked on those short opening lines as an afterthought, to express those days of misery as a stevedore, sleeping on those damn cobblestones.
17th October 2009: It was about 5 o'clock in the afternoon, October 17, 1989 — precisely 20 years ago.
I was working; my cab was in downtown San Francisco on Powell Street. Narrow street, slow moving traffic. Three and four story brick buildings on either side.
At 5.04 pm the earthquake struck. Although its epicenter was in Watsonville, a town 80 miles away, when the tremor reached SF it was nearly strong enough to tip my vehicle over on its side.
Imagine an ordinary city street. Flat, asphalt paving, as solid and immovable as anything you can imagine, then picture that blacktop surface undulating as the surf at an ocean beach. Successive waves, not tall (maybe 18 inches) but clearly waves nonetheless. Those waves gave my cab a violent shaking, then passed on forward into my line of sight. I glanced nervously at the brick buildings on each side of the street. As anyone with earthquake experience can tell you, masonry buildings are the most vulnerable to collapse when shaken. Thankfully, they remained upright.
It was later determined that the quake measured about 7.1 on the Richter scale.
I had a fare in my cab. A woman headed home in the Marina, a bayfront neighborhood which was built on mostly fill ground. Fill ground is highly unstable when disturbed.
Sure enough, when we got there we saw several collapsed buildings and numerous large fires burning. I dropped her and headed back downtown.
Passing a neighborhood bar, I parked and went in to take a leak. The bar was packed with angry patrons. Angry because city-wide electrical failure meant no TV, and they were unable to watch a championship baseball game scheduled for 5 pm. They did not seem concerned, or even aware, that a major earthquake had just occurred, or that several large fires were consuming buildings just a few blocks distant. Very soon they were even angrier. The power outage meant the bartender could not make ice, and everyone was reduced to drinking warm beer, which is not popular in the US.
Driving soon became extremely dangerous, as the traffic lights were not working. Evening was approaching. I took one more fare and then decided to pack it in. Arriving back at the taxi garage I found that most other drivers had come to the same conclusion, to quit early.
A section of the Oakland Bay Bridge collapsed. Used by hundreds of thousands of commuters daily, this would be a huge economic disruption for an unknown length of time.
A piece of the upper deck of an East Bay double decker freeway collapsed, squashing about three dozen autos. In all of California there were only five double decker freeways at the time, and four of them were in the Bay Area.
Freeways are generally popular in California, but not in San Francisco. One double decker in particular was hated — the Embarcadero (waterfront) section. It blocked magnificent views of the SF Bay. It was never rebuilt, and everyone cheered when it was demolished and the concrete debris hauled away. Only one of the local double deckers was repaired. The others were either demolished or rebuilt in other locations. San Francisco remains the only major California city which cannot be traversed via freeways.
I went home after turning in my cab. I lived at the time in an apartment building atop the Stockton Street Tunnel, which is part of the Nob Hill neighborhood. Nob Hill is mostly solid rock. Virtually no apparent earthquake damage on Nob Hill. I found a few books dislodged from their shelves in my apartment, but no other evidence of the quake.
By now it was entirely dark. A moonless night, the streets pitch black other than the headlights of a few foolhardy drivers on the hazardous streets. People sitting on the stoops of their homes, quietly chatting, a candle here and there. In some neighborhods the power would not be restored for many days, as the utility company would not restore power until assured by the fire department that no gas leaks existed in given areas.
The Marina was the only real disaster area.It was heavily televised, giving the impression to the rest of the country that SF was utterly devastated, while in fact most of the city was completely undamaged.
The police shut the Marina entirely, allowing no entry or exit in the neighborhood even for residents thereof.
The Red Cross (this was before FEMA, remember) broadcast an appeal for funds and quickly garnered $52 million. They set up shop in the Marina and spent, by their own accounting, about $12 million on relief to the locals. The surplus $40 million they shipped back to their New York bank accounts.
This turned out to have repercussions. It so happened that the mayor of SF, Art Agnos, attended a conference of mayors of major American cities a few days after the quake. There he made a speech denouncing the Red Cross. They raised a ton of money, he said, spent a fraction of it for the purpose intended, and then decamped with the bulk of the contributions, most of which came from Californians in the first place. What we should do, he told the other mayors, is devise our own disaster relief organization, among major cities, and thus ensure that locally raised money is applied to local disaster relief.
The Red Cross has had a bulletproof reputation in America for generations, but they were appalled (and I suspect terrified) by Agnos' speech. They publicly apologized. They returned the $40 million to California banks, and promised that the money would never be spent for other than California disaster relief. In return, Agnos agreed to withdraw his suggestion for municipally operated disaster relief agencies.
Now, 20 years later, San Franciscans and people of the Bay Area in general have reverted to their ho-hum attitude about earthquakes. They're a nuisance, and on rare occasions even serious, but you don't lie awake at night worrying about them. It's like the attitude of people in Florida about hurricanes. They're annoying, and once in a while disastrous, but that's the price of their salubrious climate. And they're willing to pay it. Like us on the west coast.
21st September 2009: "Taking food security for granted..." eh? Might as well include all the other trappings of urban life...tap water, electric power, trash collection, etc. Such have become so customary that it seldom occurs to anyone that all social conveniences in cities depend on an intricate and vulnerable infrastructure.
Managerial types are generally more thoughtful than politicians. Big banks and large corporations usually have off-site data storage arrangements...even if the home office suddenly burned to the ground, destroying all office data storage, up to the minute information is secure and available from a distant location.
But as to food...various charities in America specialize in providing food to the needy, and rarely turn away anyone. The demands on these charities, for food, has vastly increased in recent months. The principal supplier in this county opens its doors at 7 am each Friday. By 8 am, sometimes earlier, they have been cleaned out. Supplies exhausted. And this in spite of having successfully generated far larger charitable contributions of food from their suppliers in recent months.
California has reached the highest level of unemployment in state history. Mr. Bernanke, chairman of the federal reserve bank, declares (yesterday) "The recession is over." How do you suppose that cheers the 7 or 8 million unemployed California workers?
There is a widespread sense of frustration, resentment, and anger in this state. The draconian cuts in state funding have affected public schools, services for the homeless, shelters for battered women, state contributions to public service agencies of all kinds. Of course the governor wields this slashing knife and is generally reprobated. As if he had a choice. The pain would have been much less severe and generalized had he obtained some cooperation from the state legislature, but that was evidently never in the cards.
14th September 2009: The judge wrote "this settlement does not comport with the most elementary notions of justice or morality." And threw it out. This morning.
The federal judge in New York was ruling on the sufficiency of the proposed settlement meant to ameliorate objections to Bank of America's purchase of the brokerage house, Merrill Lynch, late last year. ML was about to declare bankruptcy and (just like Lehman Bros years before, which I described to you previously) had cleaned out their bank accounts to pay bonuses to their failed executives...to the tune of $3.6 billion dollars. Immediately thereafter, BofA declared their purchase of ML, but neither corporation bothered to mention the $3.6 billion missing from ML's bank accounts. Must have slipped their minds, eh?
The federal watchdog supposed to prosecute such financial misbehavior, the Securities and Exchange Commission, has shown itself to be not only sleepy but spineless as well. The so-called settlement SEC reached with BofA, to pay a fine of $33 MILLION for having absconded with $3.6 BILLION, and on top of that, to soak the BofA stockholders...this is what the judge called failure to meet those 'elementary notions.' Damn right.
Suppose you stole $100 and when caught, offered to pay back ten cents to settle all the charges against you. And the relevant government official agreed to your proposal, needing only court approval to settle the matter once and for all.
That's what this whole business amounts to. Can the parties involved be surprised that the court was outraged?
21st August 2009: I've never lived in Brum, but I have lived in two other 'second cities..' Yokohama in 1949 for a few months, and Chicago and suburbs, for several years in the '50s and '60s.
The Japanese are an extraordinarily energetic people. Or at least they were at the time I was there. They didn't walk, they ran. They were frank, upfront, un-self-conscious. Never did I detect envy of the global heavyweight, Tokyo, just across the bay from them. Even their language, their pronunciation, showed impatience of the slow-moving...they didn't live in Yo ko HA ma. They lived in YO-comma. Status was not among their obsessions. It was unproductive, interfered with profit-making.
Chicagoans are keenly aware of their secondary position. It bothers them, although they make light of it. (By the way, Los Angeles is now larger than Chicago. I am speaking of 50 years ago.) Their geographic centrality makes Chicago a natural commercial beehive, an advantage they take intense pride in. They have a kind of vague self-consciousness about their strengths...livestock and agricultural products...compared to the sophisticated specialties of New York...banking and stock markets. For this reason they know that they will never enjoy the global reputation of New York although they don't like to say that out loud. As a counter, they focus on cultural development...museums, opera, music, fine arts...and in fact do an impressive job of it.
I see some similarities. What you are tackling and what I am speaking of. Brum will not rival London in a million years, by the measures customary to most people. Nor will it ever achieve the urban felicity of (say) San Francisco...the kind of allure that is never built but simply evolves.
So what am I saying? That your model should be Chicago, not London.
31st July 2009: Back when Bill Clinton was new in the presidency, wife Hillary took it upon herself to persuade Congress to enact sweeping new federal health insurance laws.After several months of intense lobbying, it became apparent that Congress would not go along. The laws were never passed.
Now Obama is attempting pretty much the same thing. With the classic Democratic attitude...if the private sector is not doing an adequate job (in the eyes of politicians) then have the federal government move in and take over. The idea that the feds can be more efficient that private industry is laughable, yet that's the assumption. An assumption that only hardcore Democrats can swallow. Obama is convinced that he is doing the American people a favor. A large number of Americans think otherwise. Congress is in the control of the Democratic Party, but just barely. And there are several "blue dog" Democrats...legislators with distinctly conservative political views. Obama is unlikely to win them over. And Republicans in Congress, needless to say, see Obama as a far left Democrat. He'll get nothing from them.
Health providers in this country have only themselves to blame...hospitals and doctors here have traditionally overcharged their customers, and not just slightly. And then they complain that many of their billings go unpaid. My most recent hospital experience resulted in a bill of $6,000. Medicare paid $490 of this and declared that the total bill should be no more than $760. Health care providers do not argue with Medicare. Thus of the $6,000 bill, I paid only $270. Many people on Medicare (over 65 years of age) have supplemental insurance. I don't, but if I did, it would have paid that $270.
But some poor slob with no insurance goes to a hospital emergency room with a sick child and gets stuck with a bill of several thousand dollars. How is he to know that he is being drastically overcharged?
Meanwhile the talking heads on tv continue to suggest that the recession is easing, things will be better in a few months, etc etc. People aren't buying that. Consumer confidence, so assiduously measured by the feds, is not rising. June was lower than May. Unemployment figures are not rising as fast as they were earlier in the year. But they are still rising, nevertheless. One of the biggest employers in the Bay Area is a Toyota manufacturing plant in Fremont, an SF suburb. The lease runs out next month. Toyota has not said they would renew. It is likely to close, costing about 5,000 direct jobs and another 10 or 15,000 indirect jobs.
And I sit here, comfy and well-fed, money in the bank, not a care in the world...other than such minor matters as denture concerns. Am I blessed? Damn right.
30th July 2009: Ossification is the natural tendency of all aging bodies, animate or inanimate. Inevitable in the former, probable in the latter. Stems from the fact that 60ish and older people are incapable of imagining that 30ish and 40ish people might be their superiors in leadership. Simply not possible, the old people mutter. Of course there are exceptions but they are too few and too weak to wield influence.
24th July 2009: Nothing like a big fat scandal to titillate the masses. And me too. Political corruption has been a way of life in New Jersey for generations. Now and then some energetic prosecutor gets out a large broom and sweeps up a few dozen miscreants. One such event took place this week netting two state legislators, two mayors, five rabbis (!) and in all 44 people charged with everything from dope trafficking to money laundering. Gosh, all those lovely careers down the drain.
The popular tv series called The Sopranos is based on a New Jersey Mafia gang. The actual NJ mob on which the tv series is based crumbled a few years ago when the boss was murdered by his own crew. Why? Not because he had cheated them financially. Not because of poor leadership. They killed him because they were outraged at the discovery that he was gay!
18th July 2009: Curtail greed? You must be joking. Back in the '80s Lehman Bros was facing severe financial crisis, so the partners, 30 or so men, agreed on the ideal solution. They voted themselves huge multi-million dollar bonuses, cleaning out the nearly half-billion bank account balances. The next day they declared the firm bankrupt. And the bankruptcy court permitted their outright theft to stand.
Morality in financial dealings can sometimes be found, usually briefly and in isolated circumstances, and in any well-regulated society their are enforcement powers with teeth.
But co-existent? In the same place and the same time? Fat chance.
4th July 2009: When Ronald Reagan took office in January, 1981, his first budget submission to Congress projected a federal budget deficit of some $60 billion. Congress was appalled. Political commentators predicted the sky would fall, or something along those lines. Outrage was the sentiment of the day.
Today, the federal deficit stands at more than ELEVEN TRILLION dollars. This year alone will increase that figure by $1.8 trillion. It seems as far back as the Stone Age that people were upset about a $60 billion deficit in 1981.
Mere servicing of this indescribably vast debt takes a large chunk of the annual budget. And each year, as the debt grows, more and more people everywhere are going to view the American dollar as less and less desireable. Securities issued by the US Treasury will become not as worthless as imperial bonds issued by Czarist Russia but something moving in that direction. Unable to sell those securities in sufficient amounts, the feds will begin printing more and more money...and next is hyperinflation, a la Germany in the early 1920s when it took a wheelbarrow full of banknotes to buy a loaf of bread.
This is the specter which Obama does not comprehend, or at least discounts. And to most Americans it is simply unimaginable. Genuine hardship is something that most Americans have never experienced. Their parents didn't go thru the Great Depression. It was their grandparents, and no one pays much attention to those old fogies anyway, right?
A new day is coming in America, in my opinion. It will not be fun.
20th June 2009 Alas & alack. California is a mess, a true disaster area.
Unemployment is at an all time high and may set a new record each month for the rest of 2009. But at 10.5% it could be worse. Oregon is 12.5% and Michigan over 14%. The State Treasurer has declared that there'll be no money after mid-July. No paychecks for the vast army of state employees.
Governor Arnold has the right instincts but gets no cooperation from a recalcitrant legislature. He has promised to veto any new legislation raising taxes, demanding expense reductions instead. How about cutting all state employee salaries by 5%? His suggestion was greeted by uiniversal howls from the pigs at the trough. I feel sorry for people and organizations dependent on state support . . . services providing help for children, medical services, food subsidies for the poor, etc. All that could simply vanish in the next few weeks.
The great majority of Californians have no conception of actual hardship. Quite a few may be about to get an introduction. Most of our difficulties are traceable to foolish,short-sighted, self-centered politicians whose main concern is their own sinecures. They haven't a clue what 'public interest' means.
13th June 2009 Earlier this week Congress passed legislation empowering the Food & Drug Administration to 'regulate' the manufacture and sale of tobacco products. How soon will a pack of smokes be classed with cocaine, heroin, etc? Dug out Mill's On Liberty and found...
"...the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good is not a sufficient warrant. He cannot rightfully be compelled..because it will be better for him, or make him happier...these are good reasons for...persuading him or entreating him, but not for compelling him, or visiting him with any evil in case he should do otherwise. In the part (of his conduct) which merely concerns himself, his independence is absolute. Over himself, over his own mind and body, the individual is sovereign. (Slightly parsed, but otherwise an exact quote)
John Stuart and the US Congress would find each other incomprehensible. Opposites not only diametric but apodictic. Our Drug Enforcement Administration would probably attempt to have him indicted for sedition, or something.
19th May 2009
Now & then I take some book off my shelves to re-read. A book which I haven't looked at for years. Decades. One such was Hubris; a study of pride. By an English scholar, one Robert Payne. Published in 1951, so I bought it when I went back to college, after the war.
Fascinating. He compares German, French, and English attitudes toward pride. The English, for instance, trivialize what they hate. The proud figure is mocked, jeered, given no respect. Picture an old mystery play, or a English music hall production, where Beelzebub appears on stage where he delivers these lines:
In comes I, Beelzebub;
In my hands I carries a club,
On my head a dripping pan,
And don't you think I'm a funny old man?
He ain't scary. He's Charlie Chaplin.
Lear and Caliban show pride, uncharacteristic for an English stage. But they're more pathetic than awesome, and clearly out of step with everyone else in their world.
In Marlowe's version of Faust, Mephistopheles drops in at a London hostelry announcing that he is 'monarch of hell.' Most drop to their knees, but an English twit on the scene says "From Constantinople! You have had a great journey; will you take sixpence from your purse to pay for your supper and begone?" Annoyed at this impertinence, Mephisto threatens to turn him into an ape. Which begets "Into an ape! That's brave; I'll have fine sport with the boys and get nuts and apples."
How disrespectful can you get? And how English, in the face of Pride Incarnate.
Payne says "The problem of pride is reduced to a common denominator, and the world is well lost if one can go about one's own quiet tasks. In this sense, the English are closer to the Chinese than to any race in Europe." If that's not insightful I don't know what is. He goes on to say that the obvious exceptions (proud and prominent Englishmen) such as Wolsey and St Thomas of Canterbury are somehow not quite 'English.'
There is much more, of course, but you get the idea.
9th April 2009
Do you still have the grand jury system in the UK? We do. A superinvestigative body empowered to snoop into any governmental office or agency and issue unedited reports (usually scathing) on corruption, inefficiency, or malfeasance wherever they find it. A new GJ is empaneled each year, in each county. There are about 3,000 counties in the US. Contra Costa County (where I live) is taking applications from citizens to serve on the next GJ. I applied. There is something viscerally satisfying about the possibility of seeing the county sheriff squirm under probing questions from Joe Citizen, grand juror.
After 28 years on the streets of the city, I am a bit wistful about permanent retirement. For all its aggravations and hazards, driving a cab in SF was endlessly diverting. Not once did I fear boredom, or experience tedium for more than a rare few minutes. Of course boredom is selected, not inflicted, but the lavishness and variety on the table spread before you is a considerable factor in the selection/infliction dynamic. Dangerous, yes. I have personal recollection of eight cab driver robbery/murders. In a city of barely 800,000 population. I became, willy nilly, adept at snapshot character evaluation. No matter how fervently you may have waved at my empty cab, if you didn't pass my three-second smell test, I passed you by. Cabdriving is a powerful honer of the cutting edge of the subconscious mind.
4th April 2009
The governor of South Carolina is leaning toward declining Obama's stimulus money for his state. The feds' money has strings on it which the gov finds objectionable. Of course federal money has strings on it. Always has, always will. And people in S. Car. are upset at the gov for not accepting the dough. The gov replies "The trouble with most people in politics is that they want people to love them." There are, it is heartening to note, still people around with principles. Ford declined stimulus money for the same reasons as the S. Car. governor, although Ford is nearly as badly off as Chrysler or General Motors.
And today I see that Obama wants to cut farm subsidies. Good luck with that, Barack. Farmers (mostly agribusiness conglomerates) and labor unions are the most potent lobbying forces in American politics. Kicking those pigs away from the trough will generate the most horrific squealing imaginable.
Yesterday the Iowa Supreme Court ruled that an Iowa state law prohibiting gay marriages is unconstitutional. Loud hurrahs in California with that news, since the California Supreme Court is at this moment considering whether Prop 8 should be overturned likewise. Prop 8 passed with 52% of California voters in favor. It banned gay marriages in California. What will the California Supremos do? Lots of folks (like my pal C) wait with bated breath.
30th March 2009
I don't know enough about Fiat, Saab, Renault, Rover, etc to comment, but it is certainly evident that American car makers have had hopelessly monocular vision for decades. Their mindsets were molded in the 1950s and 60s, and cast in concrete, impervious to change of any kind. Their solution to all challenges was 'we need to do more of the same.' But nothing different. When GM developed an electric car around 1997, they abandoned it when they could not see it becoming profitable in an acceptably short time frame.
18th March 2009
High school sports are a big deal in America. Kids between 15 and 18, especially in football and basketball, discover passionate competition, agony and glory. Late winter and early spring in the US means basketball season. The regular season is now winding down and state championships are about to begin. A state championship bestows glory that lasts for generations within a school district. California state basketball championship series is held in Sacramento beginning next Saturday night. Only sixteen teams will participate, each of whom has been thru a rigorous elimination to gain a slot. One of those slots was determined last Saturday in the town of Danville, here in Contra Costa County.
A high school in Danville, called Monte Vista, played in that game. Their opponent was a school called McClymonds, a dirt poor rural school. Rich kids against poor kids. The poor kids won the game. In an interview after the game, the McClymonds coach told a reporter that his team would not go the championship series in Sacramento. Food, lodging and transportation would cost several thousand dollars, which his school district just didn't have.
His remarks were printed in the local paper, in Danville, and some of the parents of the Monte Vista players thought that just wasn't right. In less than 24 hours they raised nearly $4,000 which they delivered to the McClymonds team coach. So the poor kids will be in Sacramento next Saturday night after all.
8th March 2009
A guy named Liaquat Ahamed writes an op-ed piece in the NY Times saying that the European banks are in deeper shit (not his words) than the big American banks. Why? Because over the past decade or so German, French, and Austrian banks have lent huge sums to Eastern European borrowers...mostly governments of former Soviet-bloc countries. Those debtors are now facing declining export revenues and have generally declining economies, thus almost certainly going to default on their debts to those western European lenders. In Austria, he claims, such loans amount to 70% of Austria's GNP.
It's the old song. The language may change, but the melody doesn't. Damfool bankers who see a chance to give a big boost to current earnings (thru upfront discounts and fees) by making high risk loans. Loans with no actual collateral. Loans to borrowers who cannot be coerced and beyond the reach of law. Loans, in other words, which should in no circumstances be made by a banking corporation with obligations to their stockholders.
Will they ever learn? Fat chance.
7th March 2009
This afternoon I picked up a middleaged couple in my cab and they peppered me with questions . . . how's the cab business? are you getting as many tourists as before? and so forth. Turns out they were from Honolulu and in the tourist business . . . which at the moment, in Hawaii, stinks.
I told them that I was doing just fine. If the current business depression is going to hit me in the pocketbook, it has yet to materialize.
America's economy is now just where it was when Ronald Reagan took office. That was in January, 1983. Unemployment was then 8.1%. Right now, it is 8.3%. Less than a year after Ronnie became president, unemployment was just a hair short of 11%. Seems likely that we will again hit double digit unemployment rates, and soon. Before the end of 2009, for sure. By then, we should be able to see if this is a recession, or a good old-fashioned depression, a multi-year disaster.
Yet there are anomalies. Retail sales, nationwide, were higher in January '09 than they were in December '08. So people are not buying cars or refrigerators . . . big ticket items . . . but they are spending money all the same.
In short, the talking heads on tv shows are not capable of accurate predictions re: the economy. Your guess is as good as mine, and certainly as good as the so-called experts.
2nd March 2009
. . . the routes to wealth and power are force & fraud, for the most part, and exemplars can be found in every morning newspaper. Or as Machiavelli . . .
"The faithful servant is a servant always, and the good are always poor. None escape from bondage but the unfaithful and the bold, and none from poverty but the rapacious and the dishonest."
More apt in 16th century Florence than in 21st century London or Washington? Maybe, but to call Machiavelli entirely out of date would certainly be an overstatement.
1st March 2009
I live in in Contra Costa County, which is part of what is known as the 'East Bay' across the water from the peninsula called the city and county of San Francisco. The CC County government decided, a few months ago, to arrange acquisition of a number of abandoned/foreclosed houses, on paltry leasehold terms, from distressed lenders who had involuntarily acquired titles to them. The objective was to rent these houses to distressed local families...jobless, homeless, and in dire need...on cheap rental terms. The county accumulated 350 of these houses, then about a month ago announced their availability and that applications would be accepted from needy families. Within a week they had more than 40,000 applicants.
Here, there, everywhere there are people in their prime years who were earning large salaries, living well, but now bagging groceries or mopping floors, wondering what they'll do when their dwindling savings run out.
I was a little kid in the 1930s but I still have a few fading images from those days. Gaunt, woebegone people who looked more like zombies than human beings. Farm families found starved to death around a kitchen table.
Is America in for a reprise of that scenario? Obama is doing a lot of talking, but the future is far from clear.
note: These notes are extracts of emails from John Bartholomew, ex-banker, one-time soldier in Korea, now part-time San Francisco taxi-driver.