Saturday, August 31, 2013

Another Benefit From the Auto Industry Bailout – GM May Have Turned a Little Green

Just One More Irritant to Conservatives

Of all of the policies that the conservatives hate about Mr. Obama, his rescue of the auto industry seems to be near the top of the list, just below the goal of getting affordable health care for everyone.  The reason is that the auto industry bailout belies the conservative charge that Mr. Obama is a commie, socialist government loving anti-American.  The auto industry bailout consisted of saving the industry and returning it to private ownership, a fact that contradicts what conservatives want the world to believe about the President.

The benefits of this policy have been enormous.  And now it turns out that the new GM may be just a little bit more friendly to environmental concerns than it used to be.  The evidence, a new Chevrolet Cruze diesel.

The Chevy Cruze, not the favorite car of conservatives

Despite several do-gooder attempts, from the EV1 electric car to the Volt plug-in hybrid, General Motors has not always been viewed as a particularly green automaker. . . .

G.M.’s Chevrolet Spark EV is the most efficient electric vehicle sold in America (though only in California and Oregon for the time being) with a federal gasoline-equivalent rating of 119 miles per gallon.

Now the Chevy Cruze, already among the highest-mileage compact sedans running on gasoline, raises its bar: with a rating of 46 m.p.g., the 2014 Cruze Turbo Diesel achieves the best highway mileage of any new nonhybrid car in America.

The Cruze also becomes the first Chevy diesel since the 1986 Chevette. Weighing the Cruze against that Chevette — the latter’s engine as pitiful as the car itself — shows how far the technology has come. It also illustrates how G.M. is building world-competitive small cars after decades of bumbling indifference.

The car is getting a good review in the New York Times, although there is this.

Like many diesels in the United States, which has far stricter regulations on smog-forming nitrogen oxides than Europe, the Chevy carries a small onboard tank of urea that’s injected into the exhaust stream to neutralize pollution.

VW wins that battle; its 4-cylinder diesels meet 50-state emissions rules with no need for a urea tank. Chevy owners must refill theirs every 10,000 to 15,000 miles.

And we will leave it to the imagination of viewers as to how one must fill the tank with urea.

So no, the Obama administration is not a socialist one, it has not produced government ownership of the auto industry.  In bailing out GM and Chrysler the government did the right thing, with a huge payoff.  As noted in the previous post, not only is Mr. Obama not anti-business, when history is ultimately objectively written the Obama administration will be judged to have been lax on regulation, particularly in the financial sector.

But for now everyone just enjoy the Chevy Cruze, just another stick in the eye of conservatives.

Further Evidence That as Far As Financial Regulation is Concerned, The Obama Administration is a Republican One in Democratic Clothing

It’s Possible Even Republicans Would Have Been Stronger

One of the world's great mysteries, like how the universe started or why can’t the English cook decent food is the reluctance of the Obama Administration to actively regulate financial markets and their participants.  Regulation in the United States is a reactive process, it results from egregious acts that cause huge damage.  The role of the financial industry in the Great Recession fits this description perfectly.

But for reason beyond the explanation of anyone, the Obama Administration has treated Wall Street gently.  The idea of sending miscreants to jail for highly abusive and illegal practices seems totally foreign to Mr. Obama and the men and women he as appointed to administer federal rules.  And in that vein comes the report that no, regulation of mortgage backed securities, a major player in the recently experienced financial crisis, will be highly weakened.

Six regulators—including the Federal Reserve, Federal Deposit Insurance Corp. and Securities and Exchange Commission—on Wednesday issued new proposed rules that would require banks and other issuers of mortgage-backed securities to retain 5% of the credit risk of the bonds on their books, as mandated by the 2010 Dodd-Frank financial-overhaul law.

Well that sounds ok, what’s the problem?

However, the proposal carries an exemption so broad it wouldn't apply to securities containing most mortgages made under today's stricter lending standards, which are of relatively low risk. Rather, the rule would apply to the types of higher-risk loans that were popular before the 2008 financial crisis. The rule effectively sets boundaries for what kind of loans might be offered, and on what terms, once lending standards relax.

Had the rule been in effect last year, at least 98% of loans would have been covered by the exemption, according to Mark Zandi, chief economist at Moody's Analytics.
The decision by regulators represented a major concession to the real-estate industry and consumer groups that had worried the 5% requirement would hurt the housing recovery by limiting credit.

Oh, ok, we have this very weak regulation to begin with (the 5% should have been 50%) and now 98% of the loans are exempt.

Really, does anyone think George W. Bush would have been worse in this area?  And it's not as though Mr. Obama has received political support from Wall Street.  After bailing them out, and slapping them on the wrist, gently, for all of their discretions and crimes, the financiers turned against Mr. Obama in the 2012 election.  So what explains this policy?  Nothing except general incompetence, indifference and stupidity.

Friday, August 30, 2013

University of Oregon Has a Football Performance Center for the Gods of College Athletics and Former Heisman Trophy Winner Dick Kazmaier Has Died

The Contrast in College Athletics

College football season is upon us, and another reminder of the insanity of the situation.

The University of Oregon has built a center for its football team that apparently rivals the palaces of royalty and Saddam Hussein in luxury and opulence.

Cliff Volpe for The New York Times
An art installation on a sixth-floor sky bridge represents the number of Ducks who have been drafted into the N.F.L

The Football Performance Center at the University of Oregon features rugs woven by hand in Nepal, couches made in Italy and Brazilian hardwood underfoot in the weight room that is so dense, designers of this opulent palace believe it will not burn.

Need more, here it is.

The small details stand out. The bathrooms with green stalls and mirrors with painted Ducks slugging conference foes. The extra-large furniture tested to withstand 500 pounds. The elevators decorated with famous plays in Oregon football history, the actual plays, drawn up in Xs and Os by a coach. The room for professional scouts to watch footage of Oregon players. The ticker running sports scores.
On and on, for football’s sake:

The foosball tables from Barcelona in the players’ lounge. The ventilation systems in each locker. The magic shelves that charge phones or tablet devices without the need to plug in. The 250-plus televisions.

The Ring Room, shaped like an O, with rings underneath green neon light and audio created by Finnish engineers using game-day sound from Autzen Stadium. The cafeteria, this being the Pacific Northwest, with the espresso machine and the farm-to-table philosophy and the sign that reads, “Eat Your Enemies — And Other Food Groups.” The terrazzo floors made with recycled glass. The 40-yard electronic track inside the weight room that measures the force of each step and the efficiency of each run.

The coaches have their own locker room, complete with a hydrotherapy pool and steam shower, made from blue stone slate, and, of course, dozens of kinds of after-shave in front of the bathroom mirrors, which feature built-in televisions.

The good news, if there is any is that at least the taxpayers of Oregon did not foot this bill.

The performance center was paid for through a donation from Phil Knight, a founder of Nike, an Oregon alum and a longtime benefactor of the university. During a tour of the facility Wednesday, university officials declined to give a dollar figure, even a ballpark one, insisting they did not know the total cost of a football center where even the garbage cans were picked with great care to match the overall design. (Early design estimates placed the facility cost at $68 million, which, based on the tour, seemed conservative.)

And contrast this with the story of Princeton All American Dick Kazmaier, who died recently.  He won the Heisman (and every other) Trophy in 1951.

Associated Press
Dick Kazmaier, right, in a game in 1951. He passed for 2,404 yards and rushed for 1,950 in three varsity seasons at Princeton.

At 5 feet 11 inches and 171 pounds, Kazmaier looked too fragile to play high-level college football, especially in a single-wing offense that favored bruising 2-on-1 blocking. Still, he succeeded in the triple-threat role of runner, passer and punter.

As a junior and senior, he led Princeton to undefeated seasons and was named to most all-American teams. As a senior, in separate player-of-the-year polls, he won the Heisman Trophy, the Maxwell Award and the Walter Camp Trophy. He was voted the Associated Press athlete of the year in 1951 — ahead of Ben Hogan and Stan Musial.

And what did Mr. Kazmaier do with the rest of his life?  Well he didn’t play pro football, and he went on to a rather distinguished career in which he served his country and then made himself a business success.

But football was not the focus of his life. When Princeton’s dean of students told him he had won the Heisman Trophy, he recalled: “I thought it was nice. Then I went back to class.”

Kazmaier was drafted by the Chicago Bears but declined to join the team, or any other one. Player salaries then were often less than $5,000 a year. Instead, with a degree in psychology, he pursued a master’s in business administration at Harvard, receiving the degree in 1954.

After Harvard came three years as a Navy officer. He then started a career in sports marketing and consulting, and in 1975 he founded Kazmaier Associates. He had no regrets about giving up football.

As for his attendance at Princeton, here’s how he accomplished that.

He was recruited by 23 colleges, most offering full scholarships. He chose Princeton, where, like most athletes and nonathletes, he received financial aid, in his case $400 a year. (Tuition was $600.) To cover the rest of his tuition and room and board, he waited on tables, drove laundry trucks and took summer jobs.

So your choice everyone, who is the better person, Mr. Kazmaier or some lunkhead at Oregon?  If you don’t know the right answer you are probably a graduate of a college like Oregon that places the value of athletics over academics, and that is why you don’t know nothing.

If Republicans Are Becoming the Party of the Stupid – Here is a Full Fledged Member

Colorado Republican State Senator Vicki Marble Insults a Whole Group of People - And Embarrasses Everyone Except Republicans With Her Ignorance

[Editor's note:  With the 50th anniversary of the MLK, Jr. Speech in Washington this seems particularly appropriate.]

Louisiana Gov. Bobby Jindal, who is both a rising and falling star in Republican circles warned against the party becoming the “Party of the Stupid”.  He must have had Colorado State Senator Vicki Marble in mind.

The comments came during a meeting of the Economic Opportunity Poverty Reduction Task Force Wednesday at the Capitol as lawmakers on the committee were presented with a number of statistics highlighting racial disparities in the poverty rate.

“When you look at life expectancy, there are problems in the black race: sickle-cell anemia is something that comes up, diabetes is something that’s prevalent in the genetic makeup and you just can’t help it,” Marble said. “Although I’ve got to say, I’ve never had better BBQ and better chicken and ate better in my life than when you go down south and you — I love it.”

Marble went on to mention how Mexicans eat vegetables in Mexico but stop eating healthily when they immigrate to the United States.

“These things aren’t good for you,” she continued. “There’s so many attributing factors as to why these graphs look the way they do.”

Fortunately in this instance there was an intelligent and articulate person ready to respond.

Moments later, Rep. Rhonda Fields, D-Aurora, responded to Marble on the record — and she didn’t pull any punches.

“The title for this committee is the Economic Opportunity Poverty Reduction Task Force; and one of the things I will not tolerate is racist and insensitive comments about African Americans, the color of their skin. You mentioned what we eat — I was highly offended by your remarks,” Fields said, addressing Marble directly.

“I will not engage in a dialogue where I’m in the company where you are using the stereotype references about African Americans and chicken and food and all kinds of things. I will just not tolerate that,” Fields continued.

“This is not what this committee is all about. So I will ask that you suspend your perceptions and judgments about African Americans, about poverty — what we’re trying to do is come up with solutions and it’s not about chicken.

As far as Ms. Marble is concerned, she is now the epitome of a comedian whose watch phrase is “You can’t fix stupid”. 

No, you cannot, you can only vote it out of office.

Thursday, August 29, 2013

Steve Ballmer is Exiting Microsoft – And For Anyone Who Wonders Why

There is This Comment on the iPhone He Made in 2007

No Chance It Will Get Any Significant Market Share

Editor’s Note:  Thanks to Paul Krugman and Business Insider for the link.

Way back when, really way back, like in 2007 USA Today interviewed Steve Ballmer, the current and soon to be former head of Microsoft.  USA Today asked him about the Apple iPhone.  Here it is in all its glory.

By Kevin P. Casey for USA TODAY
To remain competitive, "We've got a lot of work to do," Steve Ballmer tells USA TODAY media reporter David Lieberman

Yeah, like getting rid of Steve Ballmer, that's Job One.

Q: People get passionate when Apple comes out with something new — the iPhone; of course, the iPod. Is that something that you'd want them to feel about Microsoft?

A: It's sort of a funny question. Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody.

Now we'll get a chance to go through this again in phones and music players. There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.

In the case of music, Apple got out early. They were the first to really recognize that you couldn't just think about the device and all the pieces separately. Bravo. Credit that to Steve (Jobs) and Apple. They did a nice job.
But it's not like we're at the end of the line of innovation that's going to come in the way people listen to music, watch videos, etc. I'll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune.

Don’tcha just love it, really, don’t’cha?  No chance the iPhone will bet any signficant market share!!!  And what the heck is a Zune? And how do you reconcile the statement "it's a $500 subsidized item" with "They may make a lot of money".  Did Mr. Ballmer not understand even basic business concepts?

Nice going Steve, we're going to miss you and your savvy business acumen.

Missouri Republicans and Some Scared Democrats Ready to Re-Fight the Civil War Over Guns

Today In Crazy – An Ongoing Series on the Lunatics of Republicans and Democrats

A recent trend in American politics is that former swing states are lining up solidly Republican.  West Virginia is one of these, as is Missouri.  And in Missouri the Republicans in charge are ready to commit the state to another session of the Civil War.  This time the issue is guns and nullification of federal laws.

JEFFERSON CITY, Mo. — Unless a handful of wavering Democrats change their minds, the Republican-controlled Missouri legislature is expected to enact a statute next month nullifying all federal gun laws in the state and making it a crime for federal agents to enforce them here. A Missourian arrested under federal firearm statutes would even be able to sue the arresting officer.

Now no one believes that such a law can withstand a court challenge.  So the only impact is to waste the resources of government in settling the issue in the courts.  But since almost nothing can be done without there being some benefit, the law does illustrate in vivid detail why Republican extremists should never, ever be allowed to govern.

As for the Profiles in Courage moment, there is this Republican.

The lone Republican opponent of the bill in the House, State Representative Jay Barnes, said, “Our Constitution is not some cheap Chinese buffet where we get to pick the parts we like and ignore the rest.” He added, “Two centuries of constitutional jurisprudence shows that this bill is plainly unconstitutional, and I’m not going to violate my oath of office.”

Gosh, a man of principles has been elected.  Wonder what his new job will be.

Politicians Are Apparently Incapable of Learning – Maryland Democratic Gubernatorial Candidate Douglas Gansler Says Things in Private He Does Not Want to Say in Public

Did Mitt Romney Not Teach These Imbeciles Anything?

There were a lot of things that sunk the Mitt Romney campaign for the Presidency, the biggest of course being Mitt Romney.  But the one single event that is usually cited is Mr. Romney’s remarks about the so-called 47% that live off the government, have no personal responsibility and would not support Mr. Romney, presumably because he would take away their unearned benefits.  These remarks were said in private, but were recorded and made public, putting Mr. Romney on the defensive for the rest of the campaign and rendering what little chance he had to win even smaller.

In the 2008 campaign Mr. Obama endured a similar experience.  His campaign only survived his clandestine remarks about people clinging to guns and God because he was running against John McCain.  It would have taken more than those ill considered statements to lose to Mr. McCain.

One would think the lesson here is obvious, that if you are a public figure don’t say anything in private that you would not want to say in public (actually that’s good advice outside of politics).  But politicians being a separate class of idiots apparently cannot learn even this basic message.  Witness Maryland Attorney General Douglas Gansler commenting on his opponent in private.

Rebecca D'Angelo/For The Washington Post -

 Maryland Attorney General Douglas F. Gansler is seen in Washington in this September 2012 file photo.
The Smile of an idiot?

Maryland Attorney General Douglas F. Gansler told a group of campaign volunteers last month that Lt. Gov. Anthony G. Brown, his chief Democratic rival for governor, has a thin record of accomplishment and is trying to rely on his race to get elected next year.

“I mean, right now his campaign slogan is, ‘Vote for me, I want to be the first African American governor of Maryland,’ ” Gansler (D) told the group. “That’s a laudable goal, but you need a second sentence: ‘Because here’s what I’ve done, and here’s why I’ve done it.’ ”

By most standards this is not extremely awful, but it shows a desperation and insensitivity that can doom a campaign.  And in several ways it is highly offensive.

The response of the Gansler campaign is to condemn the illicit taping,

“It’s unfortunate that Anthony Brown’s campaign has to stoop to the level of Richard Nixon and send in spies to illegally record a private campaign organizing meeting,” Gansler strategist Doug Thornell said.

which is an even dumber tactic than the initial statements.  Voters care about what candidates say and think, not about some technical issue of whether or not they should have been caught out.

We have no idea of who is the better candidate in Maryland in therace for Governor.  And given all of the other issues facing the nation it is hard to really care.  But being Governor requires decency and intelligence.  So far Mr. Gansler seems lacking in both.

Wednesday, August 28, 2013

A Ten Year Study in Antarctica Casts New Light on the Impact of Global Warming and Rising Sea Levels

More Evidence of a Problem – Or Just Another Part of the Conspiracy?

For those who think the problem of global warming and rising sea levels that will be associated with it is a recent issue of concern, there is this.

Thirty-five years ago, a scientist named John H. Mercer issued a warning. By then it was already becoming clear that human emissions would warm the earth, and Dr. Mercer had begun thinking deeply about the consequences.

His paper, in the journal Nature, was titled “West Antarctic Ice Sheet and CO2 Greenhouse Effect: A Threat of Disaster.” In it, Dr. Mercer pointed out the unusual topography of the ice sheet sitting over the western part of Antarctica. Much of it is below sea level, in a sort of bowl, and he said that a climatic warming could cause the whole thing to degrade rapidly on a geologic time scale, leading to a possible rise in sea level of 16 feet.

And now another piece of the puzzle is revealed.  This has happened before, but a long time ago.

NASA, via Reuters
The fast-retreating Sheldon Glacier in Antarctica. A collapse of a polar ice sheet could result in a jump in sea level.

An intriguing new paper comes from Michael J. O’Leary of Curtin University in Australia and five colleagues scattered around the world. Dr. O’Leary has spent more than a decade exploring the remote western coast of Australia, considered one of the best places in the world to study sea levels of the past.

The paper, published July 28 in Nature Geoscience, focuses on a warm period in the earth’s history that preceded the most recent ice age. In that epoch, sometimes called the Eemian, the planetary temperature was similar to levels we may see in coming decades as a result of human emissions, so it is considered a possible indicator of things to come.

And the scary thing . . .

Dr. O’Leary’s group confirmed something we pretty much already knew. In the warmer world of the Eemian, sea level stabilized for several thousand years at about 10 to 12 feet above modern sea level.

The interesting part is what happened after that. Dr. O’Leary’s group found what they consider to be compelling evidence that near the end of the Eemian, sea level jumped by another 17 feet or so, to settle at close to 30 feet above the modern level, before beginning to fall as the ice age set in.

Gosh, what could cause a sudden 17 foot increase in sea levels.  Well it could have been the work of the devil, but here is a more convincing rationale.

if the work does hold up, the implications are profound. The only possible explanation for such a large, rapid jump in sea level is the catastrophic collapse of a polar ice sheet, on either Greenland or Antarctica.

Dr. O’Leary is not prepared to say which; figuring that out is the group’s next project. But a 17-foot rise in less than a thousand years, a geologic instant, has to mean that one or both ice sheets contain some profound instability that can be set off by a warmer climate.

That, of course, augurs poorly for humans. Scientists at Stanford calculated recently that human emissions are causing the climate to change many times faster than at any point since the dinosaurs died out. We are pushing the climate system so hard that, if the ice sheets do have a threshold of some kind, we stand a good chance of exceeding it.

Okay, notice the qualified, “if the work does hold up”.  See in real science research is published and then subjected to scrutiny by other scientists.  So this is so far just the first step, but given the credentials of the authors, the ten plus years studying the issue and the climate science behind all of this, it is surely more likely than not that the research will be proven to be valid.

Of, and of course there is this from a prominent member of Congress,


August 27, 2013

Extra Bonus Quote of the Day

"I am a global warming denier. I don't deny that."

-- Sen. Tom Coburn (R-OK), quoted by 
Tulsa World, adding that he thinks the evidence points that the Earth is moving into a "mini-ice age."


You know, a person who absolutely no training or experience in the subject.  In other words, your basic ignoramus.

 Of course, none of the research will convince conservatives that the whole thing is just a big world wide hoax to have government start regulating emissions and air pollution.  But this Forum has received a copy of a policy paper that describes how conservatives would confront the issue if it does prove true.  Here are their six possible responses to the problem that are under active consideration.  None of the proposals would be implemented unless and until 6 million people drowned from rising sea levels.

  1. Pass a law forbidding the sea level from rising along the coast of the United States.  In the spirit of freedom for other nations, the sea level would be permitted to rise along the Mexican, Canadian, European, African and Asian coasts.  Republicans in North Carolina are already working to implement this on a test basis.

  1. Set up a Sea Level Commission comprised of members from the Fox News Team  that would have to approve any sea level rise more than six inches above its current level.

  1. Pass a Constitutional amendment that would allow the sea level to rise only next to ocean front property owned by gays and lesbians. (a footnote says this is probably what God intended anyway.)

  1. Declare a moratorium on any rise in the sea level until a House subcommittee has investigated the issue and the sea level has responded to Congressional subpoenas.

  1. Form a select government research group headed by Dr. Strangelove to study the problem.  Other group members would be Major General Buck Turgidson, Brig. General Jack D. Ripper and Col. Bat Guano.  The memo says these men are fully capable of debunking any scientific study that conflicts with conservative dogma.

  1. Give Halliburton a no-bid contract to build 1,000 Noah type Arks to house Republican lawmakers and their families.  The $70 billion cost would be paid for by additional cuts in food stamps and other nutritional programs for low income children, whom the memo says, would probably drown anyway.

Yep, that’s what they probably want to do.  Everybody remember where you saw it first. 

Tuesday, August 27, 2013

As Apologies Go, Politicians Could Learn A Lot from Ryan Braun – Self Admitted Doper in Baseball

But Then Who Expects Politicians to Learn

With a few notable exceptions, America tends to elect some of the worst, not some of the best to public office.  And when they are caught in their nefarious public and private illegal and inappropriate deeds about the most anyone gets is a half hearted apology in the form, “I am sorry if I offended anyone” or “Mistakes were made”.

In baseball Milwaukee star Ryan Braun has been suspended for using banned substances, and this was after his vigorous denial of wrong doing.  But now he has issued a statement that ought to be required for any politician who betrays the public trust, meaning just about all of them.  Here is an excerpt.

I deeply regret many of the things I said at the press conference after the arbitrator’s decision in February 2012. At that time, I still didn’t want to believe that I had used a banned substance. I think a combination of feeling self righteous and having a lot of unjustified anger led me to react the way I did. I felt wronged and attacked, but looking back now, I was the one who was wrong. I am beyond embarrassed that I said what I thought I needed to say to defend my clouded vision of reality. I am just starting the process of trying to understand why I responded the way I did, which I continue to regret. There is no excuse for any of this.

For too long during this process, I convinced myself that I had not done anything wrong. After my interview with MLB in late June of this year, I came to the realization that it was time to come to grips with the truth. I was never presented with baseball’s evidence against me, but I didn’t need to be, because I knew what I had done. I realized the magnitude of my poor decisions and finally focused on dealing with the realities of-and the punishment for-my actions.

I requested a second meeting with Baseball to acknowledge my violation of the drug policy and to engage in discussions about appropriate punishment for my actions. By coming forward when I did and waiving my right to appeal any sanctions that were going to be imposed, I knew I was making the correct decision and taking the first step in the right direction. It was important to me to begin my suspension immediately to minimize the burden on everyone I had so negatively affected- my teammates, the entire Brewers organization, the fans and all of MLB. There has been plenty of rumor and speculation about my situation, and I am aware that my admission may result in additional attacks and accusations from others.

There’s more, but you get the gist.  Public officials, they never will get it.

When the Going Gets Tough, Fund Manager William Ackman Loses $500 Million and Quits

How Did This Man Get $500 Million to Lose?

Men and women (well mostly men, sorry women most of you are too smart, too savvy and have too much integrity to get into the fund management business) who manage money get paid huge bucks, and all to often deliver sub par performance.  Such is the case of William Ackman, whom this Forum has previously noted has been rebuked by the J. C. Penney Board for trying to singlehandedly run ruin the company.

Now Mr. Ackman is quitting, as well befits him.

The hedge fund manager William A. Ackman moved on Monday to sell his roughly 18 percent stake in J.C. Penney, nearly two weeks after he resigned from the board amid an unusual public battle with his fellow directors.
Penney filed a prospectus with regulators giving notice that Mr. Ackman’s firm, Pershing Square Capital Management, planned to sell its 39.1 million shares. The company, which will not receive any proceeds from the sale, did not list an expected selling price.

Gosh, how did he do with the money entrusted to him to invest?  Not so well.

Shares in Penney closed at $13.35 on Monday, valuing the stake at about $522 million. Pershing first began buying stock in the retailer three years ago, becoming the biggest shareholder in the process, and paid on average about $25 a share for its position. If sold around Monday’s closing price, the hedge fund would face a potential loss of about $456 million. (Mr. Ackman’s firm also faces more losses on derivatives it owns that are tied to Penney’s stock.)

And how much good did he do on the Penney Board?  Not so much.

By selling his stake, Mr. Ackman will wash his hands of a drawn-out and ultimately disappointing investment in Penney. He first emerged as a big investor three years ago, believing that the retailer could be turned around with new management. To that end, he enlisted Ron Johnson, the celebrated architect of Apple‘s retail strategy.

But Mr. Johnson’s tenure proved to be disastrous, with numerous initiatives — eliminating discount sales, a pricey renovation of Penney’s stores — serving only to drive away existing customers while failing to bring in new ones. Earlier this year, the board fired Mr. Johnson and brought in his predecessor, Myron Ullman III, on an interim basis.

So let’s all join with the rest of the Board members and the shareholders in J. C. Penney in wishing Mr. Ackman a fond farewell, with the emphasis on the farewell.

William Ackman, the smartest man in the room, assuming the room is pre-kindergartner.

Parents Television Council Comes Out in Favor of More Teen Pregnancy, More Abortions and More Spreading of the AIDS Virus

Fear and Loathing at the MTV Broadcast of the VMA

MTV recently aired a show that presented awards for music videos, and the apparent highlight was a performance by Miley Cyrus.  This has drawn a lot of attention and some criticism. While watching Ms. Cyrus most people were probably a little bored and can no longer look at the “We’re Number One” finger at football games with the same detachment any more, so it was hard to see what the fuss was all about. But one group has been highly, highly irritated.

The Parents Television Council, a nonprofit group known for criticizing shows, including “Family Guy,” for explicit content and adult jokes, took the network to task for airing condom ads and staging performances with skimpy costumes and sexually suggestive dancing during the Video Music Awards on Sunday.

The focus here is on their objection to condom ads.  As near as we can tell, without any expert knowledge in the field, it seems that the main thing that condoms do is prevent unwanted pregnancies, prevent abortion and prevent the spread of sexually transmitted diseases.  One would think that any group that was concerned with the welfare of the population would be shouting “use condoms” from the top of their collective voices.

So the conclusion, based on this behavior is that the Parents Television Council must want to spread AIDS, must want more unwed teenage pregnancies and must want more rather than less abortions to take place.  That is certainly their right to espouse such views, just as it is our right to castigate, or better yet ignore them for those views.

Finally, there is this.

Some viewers have said that Miley Cyrus’s performance, which included miming coitus with Robin Thicke and rump-shaking among dancing bears, was in particularly poor taste.

But there seems a simple, cost free solution here.  If you find yourself watching something that is in particularly poor taste, and really that’s to be expected when watching MTV’s award show, do this.


Yes, thanks to modern technology, every TV set sold in America comes with a free, ready to use on/off switch.  Really, it’s that easy.

Monday, August 26, 2013

The Erie Canal, The Coming Fiscal Crisis and Other Thoughts in the Late August Heat

Summer Ends with A Whimper, Not a Bang

With Congress in recess, the President playing golf and Europe on its extended August vacation, here are a few thoughts that need to be spoken.

The Erie Canal – Monumental in Many Ways

Traveling the New York State Thruway, possibly the nation’s most boring road, one is struck by the historic majesty of the Erie Canal, which parallels the road.  The Erie Canal stands as a monument to what government can do, how it can transform the lives of millions, and how it can help build an economic colossus.  It is also a monument to the immigrant labor that built it.  Finally, it is a monumental rebuke to Conservatives who hate government and claim that government never ever created a single job. 

Texas Senator Ted Cruz is a Canadian

This is not new, but apparently it is news to Mr. Cruz, a man who stands for the principle that Harvard Law grads are not the best and the brightest.  Mr. Cruz was born in Canada to an American mother, and this makes him a U. S. citizen, but he also has dual citizenship.  Mr. Cruz is revoking his Canadian citizenship, although most of the U. S. would be willing to pay Canada huge sums to keep him.

Perpetual Campaign Mode – 2014 and 2016 Races Are On

Election campaigning is now a continual activity in the United States.  Ads are already running for the 2014 Congressional races, and the Republican Party has at least three de facto declared candidates for 2016 in Rand Paul, Marco Rubio and Chris Christie.  While all of this is entertaining, it makes governing almost impossible.

Will Jeb Bush Run in 2016?

He wants to run, but is smart enough to know the toll it takes on his family and the question of whether or not the country can stomach another Bush in the White House is also on his mind. 

The Fiscal Crisis is Now on the Fall TV Schedule - Consult Your Local
Listings for Time and Channel

The government runs out of spending authority on October 1.  Some Republicans want to shut it down, partly on health care reform and partly on general principle.  At this point it looks like there will not be a shutdown, and that radical Republicans will wait for the fight over the debt ceiling to attack, but trying to forecast the actions of irrational people is never a successful endeavor.

If Larry Summers is Named to Head the Fed

Then Mr. Obama will cement his reputation in economics as one of the least qualified Presidents ever in that area.

The Massive Investment in Health Care Facilities
Will Either Save America or Bankrupt It

Driving America's highways one is struck by the huge building spree that is taking place in hospitals and health care facilities.  Even rural areas are constructing huge health care complexes.  This will add enormously to the fixed costs of operating America's health care system.  Given the increase in the elderly and the increasing complexity of treating disease these facilities may save the lives of many Americans.  Or they may bankrupt the country.  Or they may do both.

Talk Radio is Passionate, Right Wing and Wrong

Apparently one characteristic that conservatives all have is that they listen to a lot of radio.  Conservatives dominate the airways, and no one, no matter how inimical they are to the ideas of conservatives cannot be struck by the passion of these commentators and their call in listeners.  But no on cannot be struck by just how wrong these people are, how ill-informed, how illogical their arguments.  The great tragedy is that this passion and commitment is not being used to improve the nation, but to divide it.  

There is also the deep pessimism that pervades right wing talk radio.  To listen to these preachers of hate and intolerance is to hear that the country is near total collapse, that it is doomed, that it will be destroyed by the wickedness of liberals, Democrats, environmentalist, gays and lesbians, abortion rights advocates and everyone else who does not completely subscribe to the hard line conservative view.  Yes the nation has a myriad of problems, but for the vast majority the life they lead is the best in the world, the best in history and for the middle class the opportunity in the United States in unparalleled in history or in any other country.  Conservatives charge that their enemies hate America, in actuality listening to them it is clear that they hate America.

The Most Scenic Interstate in the Eastern U. S.

It gets no publicity, but Interstate 26 between Erwin, Tennessee and Asheville, North Carolina must be not only an engineering marvel but the most beautiful stretch of superhighway east of the Rocky Mountains.  Drive it, it is spectacular.

Britain’s Economy is Starting to Recover – Because Conservative Policy Was a Failure, Not A Success

How  Can That Be – Read On

The British economy has been under attack by the Conservative government for about three years and the results have been predictable.  The austerity program implemented by the Conservative party which is in control of Britain’s economic policy produced the usual results, recession and unemployment.  But new numbers are beginning to show some recovery.

A sunny bundle of numbers certainly suggests that Britain’s economy is on the mend. Surveys that measure consumer confidence show shoppers are feeling positive: vital in an economy in which consumption makes up two-thirds of spending. Surveys suggest managers’ purchasing plans are at record highs across construction, manufacturing and services.

Much of the upswing comes from better news on housing. Prices are rising across the country. Mortgage costs are lower. Britons with a big deposit can now borrow at 1.5%; even those on higher loan-to-value ratios have seen rates plunge. With interest payments down, disposable income is up. That explains the rosy outlook of shoppers and rising consumption. Since estate agents, lawyers and banks make up a decent chunk of services output, it also helps explain why managers in the service sector are feeling optimistic.

So does this mean the Conservative policy has been a success?  Well no, British GDP is below pre-recession levels and not expected to get to it’s previous high for several more years.  Britain is having some success in spite of not because of Conservatives, in part because of a recovery in housing and in large part because London and south England is a very desirable place to live, assuming one is rich and can live anywhere.

But another reason why Britain may be starting to recover is that real wages have dropped, what Economists call internal deflation.

British workers have suffered one of the biggest falls in real wages among European countries over the past three years, with only crisis-hit Greece, Portugal and the Netherlands doing worse.

New figures collated by the House of Commons Library show a 5.5 per cent drop in wages after inflation since 2010. This follows other recent national statistics on the rising cost of living and a substantial fall in living standards since the first of George Osborne's austerity budgets was delivered three years ago.

This of course is one of the classical Keynesian concepts for economic recovery.  A drop in real wages due to inflation makes labor less expensive and so employment does not fall as much as it might have otherwise, which has been the case in Britain. But if wages are down 5.5% how exactly has the working class been made better off?

Of course all of this  news comes at a price.

Professor John Van Reenen, director of the Centre for Economic Performance at the London School of Economics, described the fall in real wages in the UK as "stunning – and something that did not happen in previous postwar recessions in Britain". He said the weak performance reflected poor growth and linked it to falling GDP and national income, "which is now 3.5 per cent smaller than it was before the financial crisis".

In other words, large numbers of people had to be made worse off, with lower paying jobs and lower real income in order to make a few better off.  Conservative economic policy in a nutshell.

Sunday, August 25, 2013

The Elite University of Virginia to Become the University Only of the Elite - One of the Premier State Universities Turns It Back on Low and Middle Income Families

Will Push Thousands More Students Into Onerous Debt

One of the great public colleges in America has been the University of Virginia.  Founded by Thomas Jefferson this prestigious school has been a shining example of what public education can be.  UVA as it is known is the standard by which all higher education should be judged.

In the past the school has dedicated itself to providing the incredible opportunity it offers to all students regardless of their ability to pay.

Steve Helber/Associated Press - With plans to scale back financial aid to low- and middle-income students, the University of Virginia joins the ever-growing list of prominent universities that have pared back such program.

The U-Va. Board of Visitors started AccessUVa nearly a decade ago as a financial aid program that essentially covered the cost of attending college for undergraduates who are from families that make less than twice the federal poverty guideline. (This year, that means total earnings of about $31,000 for a single-parent with one child or $47,100 for a family of four.) A leading goal was to increase socioeconomic diversity at U-Va., Virginia’s flagship public university.

But now the university has decided that such a program just costs too much money, in part because the university itself has raised the cost of attending far beyond the rate of inflation and in part because the state of Virginia is not providing the support it should, the state being controlled by conservatives who do not understand the “public” part of the concept of “public education”.

When the program launched in 2004, less than a quarter of undergraduates qualified for AccessUVa. U-Va. has since grown its enrollment and increased its tuition, and now more than a third of students qualify. The program costs more than $40 million per year, up from $11.5 million during the 2004-2005 school year. Much of the AccessUVa money comes from tuition paid by other students.

So the school will just toss the financial burden back onto low and middle income families, making sure that those students and their families incur the huge burden of student loans if they want to attend UVa.

School officials pursued a few options — such as limiting the program to only in-state students or lowering the maximum family income level to qualify — but administrators and some board members instead decided to include federal student loans in the aid packages, shifting the financial burden from the university to students and their families.

Finally, it is not true and this Forum wants to make certain everyone knows that college officials did NOT issue the following statement.

The Administration and Board of Visitors of the University of Virginia

Statement of Principles
August 2013

We the administration and Board of Visitors of the University of Virginia and the governance of the state of Virginia wish to announce that we are severely reducing a program that provided for financial support for low and middle income families and that we have totally abandoned our goal of a student body that represents all levels of income and wealth. 

Instead it is our desire to not only restrict the University student body to wealthy and high income families, but hopefully to return the University to its historic past, when only white males from distinguished wealthy families were admitted.  While we do believe it will not be possible to keep women out of the student body, despite the long history of our success in that endeavor in the past we do think that by imposing huge financial barriers to attendance we can substantially reduce the admission of minorities, and that at some time in the future UVa will once again be an all white, all male school.

No, no one at the University of Virginia has said such a thing.  We cannot, of course, give the same affirmation that no one at the University of Virginia governance has not thought such a thing. 

Medicare Works – In Part – Because of the Individual Mandate

A Lesson Conservatives Will Never Learn

As health care reform stumbles and bumbles towards its inevitable implementation attention is once more turned towards the individual mandate, the requirement that everyone have some form of insurance.  The rationale, as Paul Krugman and others continually point out is that for insurance to work everyone, the low risk and the high risk individuals must be in the system.

At the most fundamental level, you can’t guarantee adequate health care to everyone unless the people who don’t need help right now — the young, healthy, and affluent — are induced, one way or another, to contribute to the care of those who do need help. You can do this purely with taxes, via a single-payer system (and maybe even by having the government act as provider), or you can do it, Swiss or Massachusetts style, via a combination of regulation, taxes, and subsidies. But some way of corralling the lucky healthy into contributing is necessary.

Take a look at Medicare.  To the extent it works it works because the entire 65+ population is enrolled and contributing to the costs.  Most likely Medicare follows the 90-10 rule, 90% of the costs are incurred by 10% of those enrolled.  And those 10% are composed mostly of the really old, the 80 year old plus.  But by having the 65 to 79 year old healthy enrollees the costs are spread over a large base.  And those healthy 65 to 79 year olds have health insurance, so the unlucky ones amongst them will be covered.

In short, reality is real.  Conservatives just don’t want to live in the real world.