Archive for March, 2009

Man-Caused Disaster

Tuesday, March 31st, 2009

Introduced in House as the Grayson-Himes Pay For Performance Act of 2009, H.R.1664 is House Financial Services Committee chair Barney Frank’s attempt to put his hand down our pockets and grab something (such as, I hope, our money). I don’t know about you, but I’d rather not have Frank’s hands anywhere near my pocket.

According to Beyond AIG: A bill to let Big Government set your salary

The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

And who would get to determine what is unreasonable? Why Treasury Secretary Tim ‘TurboTax’ Geithner.

In addition, the bill gives Geithner the authority to decide what pay is “unreasonable” or “excessive.” And it directs the Treasury Department to come up with a method to evaluate “the performance of the individual executive or employee to whom the payment relates.”

This is freaking hilarious. The government is going to come up with a method to evaluate performance? The government can barely come up with a method to evaluate it’s own performance, where “profit”, “productivity”, and “innovation” are not exactly watchwords. The government is notoriously poor at establishing balanced performance measures (i.e., a balanced scorecard). Rather than establish balanced measures, the government tends to measure only inputs, rather than actual results, or benefits.

Now I know what Homeland Security Secretary Napolitano meant by “man-caused disasters”. Just pay attention to Barney Frank’s next move.

This Is Your New Bonus

This Is Your New Bonus

Takin’ Care of Business

Monday, March 30th, 2009

John Murtha (D-Bag, Pennsylvania) made more news this past weekend. The Pittsburgh Post Gazette’s Critics claim John Murtha is capitalizing on a corrupt system, but he’s not apologizing tells

JOHNSTOWN, Pa. — This city once had a steel-based economy and critics now say it has a John Murtha-based economy but, in what used to be the 11-inch rolling mill of Bethlehem Steel, nobody’s apologizing.

And later

Johnstown made Mr. Murtha the king of earmarks. Prone to floods and wracked by unemployment when steel collapsed, the city turned to its congressman to save its economy and Mr. Murtha, for his part, turned to the federal budget.

And

On a suburban hillside, in a development called the John P. Murtha Technology Center, just a stone’s throw from the John P. Murtha Airport, a group of locals set up Concurrent Technologies Corp., a nonprofit research and technology combine that found its footing with Murtha-directed earmarks.

Today CTC employs 1,400 people with 21 offices around the country and has a payroll of $66 million — $40 million of it for the 800 employees stationed in Johnstown. A few miles from CTC’s headquarters sits Kuchera Industries, another garage startup that struggled through the 1980s and then found itself flush with defense contracts under Mr. Murtha’s tutelage.

Multinational firms, from Lockheed Martin and Northrop Grumman to DRS Technologies and the Norwegian firm Kongsberg Gruppen, have set up outposts here, capturing defense contracts and partnering with local companies such as CTC and JWF.

No one has tallied the amount Mr. Murtha has steered into his district, which sprawls well beyond the Conemaugh Valley and reaches the West Virginia border. Conservative estimates are in the billions of dollars, most of it lobbied from federal agencies or won through open bidding or, more controversially, steered home directly during his 35-year career.

And, unbelievably, Murtha had this to say

“If I’m corrupt, it’s because I take care of my district.”

Well there you have it. Murtha has just committed a cardinal sin: blurting out the truth.

In all of the outrage over AIG bonuses and executive pay, we have lost site of the bothersome patronage and ethical scandals that abound in Congress.

Besides Murtha, we have Countrywide Financial and the “friends of Angelo” program that provided sweetheart loans to Senate Budget Committee Chairman Kent Conrad (D., N.D.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.).

And then there is Barney Frank. This article from the New York Times in September of 2003 tells of the Bush administration’s proposal to establish a new oversight office for Fannie and Freddie.

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken.

This is at odds with the conventional assumptions, namely that somehow the Bush administration stripped away all manner of protection. Sorry. Fantasy. But the article does indicate Barney Frank’s feelings about additional oversight

“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

So, you see, it really is about affordable housing.

The likes of Murtha, Frank, and Dodd pose much greater threats to our long-term economic viability than $160 million in bonus payments.

A Lulu from Lula!

Sunday, March 29th, 2009

More socialist claptrap has wafted up from the southern hemisphere like so much effluvium from a sewage treatment plant. This time, the rant is courtesy of Brazil’s President, Luiz Inacio Lula da Silvamade. According to Sky News’ White People Caused The Credit Crunch

Brazil’s President, while meeting [British Prime Minister] Gordon Brown, has said the global financial crisis was caused by “white people with blue eyes”.

Luiz Inacio Lula da Silva made the comments after talks with the Prime Minister to try to forge a global consensus on how to save the worldwide economy.

Sky News’ Joey Jones said it was an “uncomfortable” moment for Mr Brown.

“The President does not mind using fairly flamboyant language. He likes to give extensive answers to journalists.

“But some of it was rather awkward for the Prime Minister, who was standing there listening to the President.

“A few eyebrows will have gone up at what he said.”

Downing Street says the remarks were meant for “domestic consumption”.

Jones said: “People in Brazil are very frustrated and angry at what they feel is the injustice of the situation: a crisis that has essentially come from the banking sectors in places like the United States and the UK, but is affecting their country.”

According to the Financial Times, the Lula da Silva stated

“This crisis was caused by the irrational behaviour of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing.”

There was no need for Brown to feel awkward since Brown’s eyes are, oddly enough, brown. But it might be noted that both George Bush and Dick Cheney have blue eyes. And, according to the Michael Medved Show, and adjusting for the recent election, 38 of our 44 presidents had blue eyes. Hmmm.

But less than a week earlier, Lula was in New York where, at an investor conference sponsored by the Wall Street Journal, he expressed the reasonable concern that the global economic crisis would increase protectionism within the United States and cause a general pullback of spending for imported goods. According to the Wall Street Journal, Lula stated that Brazil and the rest of the world cannot afford for the US to relive the Japan example becuase the US is too important to trade financing. The WSJ opinion writer, Mary Anastasia O’Grady, in referring to Lula da Silva stated that “He has a pretty good level of diplomacy”.

If Lula da Silva has a “pretty good level of diplomacy”, I’d hate to see a leader with a poor level.

Tricks and Schemes and Rahm, Oh My!

Thursday, March 26th, 2009

I wonder why Rahn Emanuel wasn’t out in front, leading the charge, rallying the troops for an all-out assualt on AIG executives and their bonuses. Could it have anything to do Rahm’s time on the board of Freddie Mac, as described in the Chicago Tribune’s Rahm Emanuel’s profitable stint at mortgage giant?

Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.

One of those allegedly asleep-at-the-switch board members was Chicago’s Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.

As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation’s mortgage woes and fulfilling the administration’s pledge to impose responsibility on the financial world.

Emanuel’s Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation’s current economic mess.

And

In business as in politics, Emanuel has cultivated an aggressive, take-charge reputation that made him rich and propelled his rise to the front of the national stage. But buried deep in corporate and government documents on the Freddie Mac scandal is a little-known and very different story involving Emanuel.

He was named to the Freddie Mac board in February 2000 by Clinton, whom Emanuel had served as White House political director …

The board met no more than six times a year. Unlike most fellow directors, Emanuel was not assigned to any of the board’s working committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other new directors qualified for $380,000 in stock and options plus a $20,000 annual fee, records indicate.

I wonder why Rahm isn’t taking charge now.

On Emanuel’s watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.

The accounting scandal wasn’t the only one that brewed during Emanuel’s tenure.

During his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.

The next time a democrat talks about tricks, schemes, and hatching plans, only the context will tell whether they are speaking about Dick Cheney or Rahm Emanuel.

By the way, the article states that George Bush ceased  making appointments following an assessment by then head of a federal oversight agency for Freddie Mac, Armando Falcon, that the patronage system was useless. Thank you President Bush.

Will Congress consider legislation to retroactively tax Emanuel’s lucre so generously provided by Freddie Mac at, oh, say 90%?

Elections Do Matter

Wednesday, March 25th, 2009

I was reminded of one of my favorite “laws”, the law of unintended consequences, by Security Worries in the Suburbs in today’s Washington Post. The article concerns Alexandria, Virginia, a city that borders the Potomac River and which is about 6 miles south of the District of Columbia.

An outcry is growing in Alexandria over a prospect no one seems to like: terrorist suspects in the suburbs.

The historic, vibrant community less than 10 miles from the White House markets itself as a “federal friendly zone.” But it has turned decidedly unfriendly to news that the Obama administration might move some detainees from their highly controlled military fortress at Guantanamo Bay, Cuba, to Alexandria to stand trial at the federal courthouse.

“We would be absolutely opposed to relocating Guantanamo prisoners to Alexandria,” Mayor William D. Euille (D) said. “We would do everything in our power to lobby the president, the governor, the Congress and everyone else to stop it. We’ve had this experience, and it was unpleasant. Let someone else have it.”

The 2006 death penalty trial of Zacarias Moussaoui, who was convicted of conspiring in the terrorist attacks of Sept, 11, 2001, turned the neighborhood into a virtual encampment, with heavily armed agents, rooftop snipers, bomb-sniffing dogs, blocked streets, identification checks and a fleet of television satellite trucks.

According to USA Today results, Alexandria’s 70,000 voters tilted by a 5 to 2 ratio for Obama. I wonder if any of those 50,000 Obamaniacs will give any thought to the possibility that citizen concerns such as theirs were anticipated by the Bush administration and were included in the decision making that led to the opening of Guantanamo Bay in the first place.

I find Alexandria’s NIMBY attitude to be, to put it politely, hypocritical. Elections do matter.

When Obama Turns The Corner Too Fast…

Tuesday, March 24th, 2009

This evening, President Obama is conducting a press conference. The focus of his prepared remarks is on his economic recovery plan. It was all pretty ho-hum.

But on February 9th, President Obama also gave a press conference. Also to explain the stimulus package. After that press conference, on MSNBC’s Countdown with Keith Olberman, Chris Matthews showed, again, just how much in the tank he is for Obama.

I thought the president showed his analytical mind.  I think there is a challenge to the presidency right now.  These are complicated issues.  We want to hear the president‘s mind working.  We don‘t just want to hear his final decision, his bottom line—that‘s useless to us.

The bottom line is useless? There’s no need to hear the final decision? It’s really the process? I thought Obama was elected because on Iraq, his bottom line was that he was against the war at a time when he had no vote, and that he was going to bring the troops home ASAP?

We want to know how he gets there.  How does this decision to push the stimulus package get us down the road to a turned-around economy?  How does it work?  He tried to explain that.

I guess the explanation was so lucid, so accessible back in February, that he wanted to try again today. Said Matthews then

He said, “We are trying to stop the downward cycle, the downward spiral.  We are trying to put money in people‘s pockets.  We‘re trying to loosen up the credit markets.  We‘re trying to get public works going out there to get jobs created.”

Matthews is pleased that the President is not trying to accelerate the downward cycle? He is elated that Obama is not trying to take money out of people’s pockets, that he is not trying to tighten the credit markets or reduce or eliminate public works projects?

He said, the benchmark, the metric he should be judged by, in the fist instance is 3 million to 4 million new jobs.  After that, certainly, the credit market is loosening up, and after that, the housing situation stabilized.

Matthews sounds like a mouthpiece for the administration.

He was precise and I was very impressed with his amazing ability standing in front of the American people on a roadblock—by the way, you couldn‘t find a channel, hardly, that he wasn‘t on tonight—a roadblock of American attention and he was at his best intellectually.  I think it was great example of how his mind works.  And I think we‘re going to have to know that in the next four years—how is he thinking on this thing.

Huh? You could probably hear Matthews saying the above while drooling a little bit.

I think he showed his ability to go around the room with a flashlight to the question you put.  You ask a question which is a holistic question, so let me look at this part, that part.  He does—what a mind he has.  And I love his ability to do it on television.  I love to think with him.

“I love to think with him.”? One almost gets the impression that Matthews would like to do more than “think”. So…

When Obama turns the corner too fast…Chris Matthews gets a broken nose.

Pwnage By USAID

Monday, March 23rd, 2009

In KansasCity.com, U.S. move to cheaper Chinese condoms threatens American jobs tells the story of the decision to stretch our tax dollars when purchasing condoms.

Call it a condom conundrum.

At a time when the federal government is spending billions of stimulus dollars to stem the tide of U.S. layoffs, should that same government put even more Americans out of work by buying cheaper foreign products.

In this case, Chinese condoms.

Ah, excuse me. Correct me if I am wrong, but doesn’t China have a population problem? Do we really want to distribute Chinese-made birth control?

The switch comes despite implied assurances over the years that the agency would continue to buy American whenever possible.

“Of course, we considered how many U.S. jobs would be affected by this move,” said a USAID official who spoke on the condition that he would not be named. But he said the reasons for the change included lower prices (2 cents versus more than 5 cents for U.S.-made condoms) and the fact that Congress dropped “buy American language” in a recent appropriations bill.

For the money savings, we can buy 2 and a half times more love socks. What happened? Did refractory periods magically drop by 60%?

France. Where Else?

France. Where Else?

Off His Game

Sunday, March 22nd, 2009

It is becoming clear that Barack Obama, off the teleprompter, is a genuine danger to himself and to others, notably Democrats. During the campaign, Senator Obama was mostly spot-on with his stump speeches and was adequate in the debates. Now President Obama is still in a campaign mode. But his choice of communication channels – for example Jay Leno, town hall meetings – has led to recent embarrassing gaffes.

The Los Angeles Times Not bowled over by Obama’s Special Olympics joke tells of one Obama supporter that takes umbrage with his Leno appearance

When she met Barack Obama two years ago, Caitlin Cox proudly wore the two bronze medals she had won at the Special Olympics. The then-Illinois senator grinned as she showed him pictures of her signature bubble-gum-pink bowling ball and posed for photographs with her.

Cox, who has Down syndrome, excitedly recalls that meeting each time she sees Obama’s photo on a magazine cover or hears him mentioned on TV. Her ears perked up again Friday morning as her parents discussed the president at breakfast.

Her mother, Suzanne Thompson, told her that Obama had made a joke about the Special Olympics on “The Tonight Show With Jay Leno” on Thursday and that it might have hurt a lot of people. Cox, 21, dropped her head on the table and, after a brief silence, said the news made her sad.

Makes me sad, too. I had hoped for more. And later

Obama’s comment also hit close to home for David Axelrod, the president’s top political guru and a senior White House advisor.

Axelrod’s daughter, Lauren, is a longtime Special Olympian who has competed in swimming and track and field events.

Oh snap! Good one there, Barack.

Then, recently at a town hall meeting in California, speaking of AIG

“We had to step in, it was the right thing to do, even though it is infuriating,” Obama said, explaining why the government needed to bail out the troubled banks.

“The same is true with AIG,” he said. “It was the right thing to do to step in. Here’s the problem. It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.”

This comes on the heels of Charles Grassley’s (R-Iowa) ill-advised suggestion that AIG executives commit suicide. Let’s not forget that people in the same tax bracket as AIG executives pay, by far, the lion’s share of all individual income taxes. So I’d hate for all these executives to commit suicide. It would almost certainly increase the taxes I would have to pay.

Let’s leave the “rhetorical flourishes” to Joe Biden. He has had a lifetime to perfect his standup routine. Sure Joe sticks his foot in his mouth on a routine basis; but he remains an affable figure. One or two more comments such as the Special Olympics “joke” and Obama will have to spend considerable time and energy to shake the notion that he is a complete asshat.

The Gambia Witch Doctor Gambit

Thursday, March 19th, 2009

Rather than waste time wringing its hands over whether the US tortured the man (?) that murdered Daniel Pearl, I wish the international community would turn its attention to the witch hunts in Gambia. No, really, witches. According to Reuters India in Up to 1,000 detained in Gambia witch hunt

Witch doctors and security forces in Gambia have detained up to 1,000 people on suspicion of being witches, Amnesty International said on Wednesday. Police in the African country dismissed the reports as lies.

Victims have been held in secret detention camps for up to five days and forced to drink hallucinogenic substances which have killed at least two people through kidney failure, the London-based human rights organization said in a statement.

And

Around 300 men and women were forced on to buses at gunpoint and taken to President Yahya Jammeh’s home area of Kanilai, Amnesty quoted the witness as saying.

“Once there, they were stripped and forced to drink ‘dirty water’ from herbs and were also bathed with these dirty herbs. A lot of these people who were forced to drink these poisonous herbs developed instant diarrhoea and vomiting whilst they lay helpless,” the witness added.

Gambia’s inspector general of police, Essa Badjie, rejected the reports as lies.

And here comes the motivation for those lies

“I think they are neglecting what is happening in Afghanistan. They are lying,” he told Reuters by telephone.

“Tell them they are lying. See what is happening in Palestine and Iraq… The Gambia is a peaceful country,” he said.

If I get Badjie’s drift, because of troubles in Afghanistan, Palestine, and Iraq, we have to divert attention to a place that, frankly, most Geography majors have never heard of. Quite right. I think maybe the IG has been sampling the hallucinogenic “dirty water”.

Amnesty said eyewitnesses and victims said the people seeking witches, themselves known as witch doctors, had come from nearby Guinea, but were accompanied on their raids by Gambian police and army and national intelligence agents, along with members of Jammeh’s personal guard, known as “green boys.”

The “green boys” are apparently a violent group.

Green Boys

Green Boys

According to the Washington Post article on the same subject

In 2007, Jammeh declared he had discovered a cure for AIDS and began treating patients inside the presidential palace, using herbs and incantations. His dictatorial regime has cracked down harshly on critics, especially the press.

According to this article in the Gambia Echo Online Newspaper

I couldn’t and never would understand how a 21st Century Head of state can claim to have supernatural knowledge empowering him to be hearing voices from the Quran that revealed the secrets of the cure for Aids, cancer, diabetics and the like.

As I learn more and more about Gambia and its witch doctors, it’s comforting to know that The Gambia has the same vote at the US in the United Nations.

Which Doctor?

Which Doctor?

The Grandfather Clause

Wednesday, March 18th, 2009

As everyone knows, Senator Chris Dodd (D-Bag, Connecticut) has one purpose in life, namely to be Ted Kennedy’s drinking buddy. But now we know that he has another duty, and that is to look out for the AIG executives that are his constituents in Connecticut. According to CNN

Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language.

Dodd, a Democrat, told CNN’s Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and “golden parachutes” at those companies.

“The administration had expressed reservations,” Dodd said. “They asked for modifications. The alternative was losing the amendment entirely.”

On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.

He said Wednesday that the “grandfather clause” language “seemed like innocent modifications” at the time.

“I agreed reluctantly,” Dodd said. “I was changing the amendment because others were insistent.”

That sounds a little bit like the Obama administration being thrown under the bus. One question is, who put in the “grandfather clause”? Yesterday, Dodd said that changes were made “in conference”. Today, he states that the administration (staff of the Treasury Department) pushed for the provisions to permit AIG to give out the bonuses, and that he changed the amendment.

Right now, Treasury Secretary Geithner seems to be taking a lot of heat. You could say that he was given a tax mulligan. He won’t likely get a “grandfather clause” mulligan if he has responsibility. His days may be numbered. Dodd’s should be too.