Bailouts and Bonuses: The Money-Changers Win Again

Among the most perplexing occurrences in this season of bailouts as Treasury Secretary Henry Paulson scrambles to prop up the economy by staggeringly large infusions of cash to banks that apparently have flushed their own money down their gilded toilets is the payment of bonuses to the bankers running these banks.  The New York Times, in an excellent analysis sure to provoke either outrage or something like "yeah, that's about right," reports that "[s]crutinty over pay is intensifying as banks like Merrill prepare to dole out bonuses even after they have had to be propped up with billions of dollars of taxpayers' money."  See "On Wall Street, Bonuses, Not Profits, Were Real."  Say that again: "propped up with billions of dollars of taxpayers' money."  

The explanation I've most seen for this perplexing development is that the banks will not be able to attract or keep top financiers, if they do not pay out bonuses.  And, of course, without top financiers these institutions, which are "propped up with billions of dollars of taxpayers' money," would be imperiled or more endangered of failing and therefore losing billions of dollars of taxpayers' money.  

But my problem is this: aren't we paying these bonuses to the same bankers that ran their banks into the ground requiring that they be "propped up with billions of dollars of taxpayers' money?"  If this is true, it seems that these bankers are not the finance talent that should be attracted and retained to save the banks, the billions of dollars of taxpayers' money, and the good sense that somewhere, someday, somehow grants someone the good sense to say Enough is Enough.   

The Big 3 Show Up With Their Cups Out ...... Again

For years when I think of the Big 3 automakers three thoughts have come to mind. First is resistance to innovative safety measures, because I recall the many years in which these companies successfully delayed and deferred installation of air bags. As a survivor because of air bags of a high-speed, head-on collision, I cannot help but think that there were thousands of needless deaths because of the Big 3's wrongheaded recalcitrance and obstruction.

The second is the loophole in gas mileage standards that exempted SUVs. This allowed the Big 3 to have a business model that was premised on lobbying, not on marketing, product development and innovation but on political influence. Now the utility of the loophole is exhausted, Congress voted them $25 billion earlier in the year for retooling and here they are again with their cups out.

The third thing is management that appears incapable of seeing what is obvious. Elizabeth Kolbert in the New Yorker in a brief piece titled "Car Talk" quotes from a 1980 report by Jimmy Carter's Secretary of Transportation as follows:

The Secretary of Transportation’s report to Congress begins on a dark note. “Over the past year, the domestic auto industry has experienced sharply reduced sales and profitability, large indefinite layoffs, and increased market penetration by imports,” it states. “The shift in consumer preferences towards smaller, more fuel-efficient passenger cars and light trucks . . . appears to be permanent, and the industry will spend massive amounts of money to retool to produce the motor vehicles that the public now wants.” The revenue to pay for this retooling, though, will have to come from sales of just the sort of cars that the public is no longer buying—a situation, the report observes, bound to produce “financial strain.”

“To improve the overall future prospects for the domestic motor vehicle manufacturers, a quality and price competitive motor vehicle must be produced,” the report warns. “If this is not accomplished, the long term outlook for the industry is bleak.”

That was 28 years ago. And I do not see how it can be said that these words were heeded in any substantial way, if at all. Instead, the Big 3 turned to lobbying to create a market niche. And now they show up for more of the same.

The Obama Team: The Best and Brightest 2.0

According to New York Times columnist David Brooks, the team Barack Obama is assembling for his administration is The Best and Brightest 2.0.  Brooks recites in "The Insider's Crusade" the impressive educational credentials of Team Obama and further that they are "the best of the Washington insiders."  This star-studded group has a number of highly desirable and, again according to Brooks, "indisputable" qualities, to wit:

• open minds subject to influence by real evidence
• professional standing of the highest order
• an absence of excessive partisanship
• pragmatism instead of ideology
• practical creativity

So, a bunch of smart people who are going to figure out how to make the country better based on facts, evidence and reality.  Ordinarily, all that would seem a given but reality has consistently lost to fantasy these past 8 years.  Let's hope that Brooks is right and Team Obama's results match their most impressive credentials.

Where Does The South Begin In Kentucky?

Kentucky is historically a border state, neither wholly Northern/Midwestern nor Southern. Depending on where you are in the state there comes a point in which you cross the border from the North or Midwest to the South. To my mind it occurs traveling south on I-75 about 500 yds. north of mile marker 131. At that point, you descend a significant hill and see before you spread out the northernmost part of the Bluegrass. The view calls to my mind the painting of Daniel Boone viewing what we now know as the Bluegrass from Pilot Knob. At the bottom of the hill is the Louisville Forge factory on the left as you travel south. From this point you are out of the hills of the Ohio River valley countryside of my native northern Kentucky and into the gently rolling Bluegrass.

Barack Obama For President

The 2000 Presidential campaign seems a very, very long time ago.  An issue then was what to do with the federal government's budgetary surplus, the United States stood in an exemplary position as the world leader, and, at least as I recall it, our Country, while not exactly on an even keel for everybody, seemed to allow or offer a more or less fair shake for everybody.  That last point overstates it, perhaps, but then memory can make things look better given time.  

But the Bush Administration has laid waste to all this.  Putting aside everything specific, there has been a continuing absence of sound, reasoned judgment in favor of I'm not sure what but it has yielded disaster after disaster.  

Barack Obama offers the clearest and most direct step away from the dark years of George W. Bush and toward a day where the United States is again admired and respected throughout the world, its federal government functions in a sensible way and serves its people, and, most important of all, our beloved Nation will again offer something like a fair shake to ordinary Americans.  Obama's election will also illustrate the greatest of American strengths; the continuing ability of this Nation to stand as the best hope for all the World.  Nobody fair and reasonable can deny that Obama's election will be both remarkable and encouraging.   

Ironies Abound In This Remarkable Presidential Campaign

It seems difficult not to conclude that Sen. John McCain harbors no small amount of bitterness over recognizing that fate and time passed him by, at least in terms of ever being elected President. My own guess is that had he run in the 2000 general election as the Republican candidate against Al Gore he would have won (and not in the hanging chad have the election decided by five political appointees on the Supreme Court but straight out). Also, had he run as the Democratic candidate in the 2000 general election against George W. Bush, he would have won as well. Now in 2008 it appears to me that the utterly disastrous rule of the Bush Administration has compelled Sen. McCain to take measures, i.e., the bizarre selection of the stunningly unqualified and not ready for prime time Sarah Palin as his running mate, that were counter to his inclinations. I've read that he wanted to select Tom Ridge or Sen. Lieberman as his running mate but was talked out of it by, well, I'm not sure who but presumably Republican operatives. And so now Sen. McCain finds himself saddled with a near impossible situation and facing an opponent, Sen. Obama, for whom it appears the timing of fate has been perfect. This congruence of coincidence and compulsion has left Sen. McCain apparently seething and barely able to conduct himself in Sen. Obama's presence in a way that Sen. Obama deserves and, I say, Sen. McCain himself knows is proper. Another irony is that McCain probably would be in a better mood and would probably be running a campaign more in tune with his own history if his opponent were Hillary Clinton. A further irony would be that Hillary Clinton would probably have a massive lead over McCain already and the campaign would no longer be in doubt. Ironies abound in this unbelievable campaign taking place as the full weight of the years of Bush misrule become further manifest.

Wynton Marsalis & Jazz at Lincoln Center

Saturday night brought to our town Wynton Marsalis and the Lincoln Center Jazz Orchestra.  There were 15 players in all: Marsalis and three other trumpeteers, a drummer, a pianist, a bassist, three trombonists, and five musicians who played a variety of saxaphones, clarinets and flutes.  Among the stronger performances to my ear were Wayne Shorter's "Infant Eyes" and Lee Morgan's "Ceora."  The Singletary Center was 80-85% full, maybe 1200 people.  My daughter remarked that there were a lot of bald heads and gray hair and asked why there were so few young people there.  Good question.  Surely the ticket prices had something to do with it, the cheapest was $40.   One might also infer a lack of interest in jazz among the college student-age crowd.  Jazz for that crowd might be regarded similar to classical music: something you go hear performed occasionally in a fancy hall but is not part of the regular stream of life.  

All that may be but missing out on a performance by Marsalis with this orchestra is missing something special.  Wynton Marsalis is one of our Nation's greatest cultural ambassadors, as interesting a cultural commentator as a musician.