Every day here in town, Summit, N.J., I see clear evidence of the problem the U.S. economy faces…small business is dead. I think we are now up to 25 businesses that have closed in a business district that is of decent size befitting a prosperous town of some 20,000+. Corporate America is hanging in there, with profits respectable given efforts to squeeze every last bit of productivity out of their workers, but otherwise the bodies are piling up, as Friday’s employment report for October revealed the official unemployment rate soared to 10.2%, the highest since 1983, while the unofficial one is in the 17%-18% range. Remember the days when U.S. unemployment rates were in the 5% range and we’d scoff at Europe’s 9% to 10% ones? Well the latest rate for the Eurozone is 9.7%, awful but better than ours. I’m glad Warren Buffett, through the buying up of all the Burlington Northern shares he didn’t already own ($26 billion worth) said he was making an “all-in wager on the economic future of the United States” because I sure as hell wouldn’t.
By now every two-year-old in America should know two maxims of investing:
The market is a discounting mechanism and employment is a lagging indicator.
In making my forecast for 2009 I correctly said the major averages would finish up 20 to 30 percent because sentiment would trump fundamentals and that has indeed been the case. We hit my targets a few weeks ago but I’ve refused to give a forecast for next year because of all the uncertainty that remains, particularly on the geopolitical front, plus I want to see where the equity averages finish up 2009 before opining on 2010. The two very much go hand in hand. Before I turn to the elephant in the room, however, a few words on the past week.
The economic data was actually much improved, especially compared to the past few weeks, as a reading on construction spending for September was solidly positive when a negative number was expected, September factory orders were slightly better than expected (and solidly positive) and an October reading on manufacturing, the ISM, hit 55.7, better than the forecast 53.0 and far above the 50 dividing line between growth and contraction. The 55.7 was the best since April 2006. And a figure on the housing front, September pending home sales, came in better than expected as well, up 6.1%. All very good. Cisco Systems then issued a positive earnings report that contained an optimistic view of current conditions on into 2010, and that, too, was good. Mr. Buffett’s move was helpful as well.
Then the Federal Reserve’s Open Market Committee met and in holding the line on interest rates at zero (thus once again screwing savers, but aiding the banks in their ongoing effort to earn their way out of their problems, read underperforming assets that sit on their balance sheets like a pile of merde that no one wants to clean up) offered that it will continue to promote economic activity by keeping rates exceptionally low for an extended period, adding that household spending (the consumer being 70% of the economy) will remain “constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit.”
No surprises, for sure, as it comes down to two key items; wages and housing.
Wages are going nowhere, except in some cases down, and as much as I’m proud I may have picked the housing bottom when in 2008 I said we’d hit a floor in the April-May time frame of ’09, I also hastened to add, oh, about 75 times, that once we bottomed we’d sit there for a long spell. Whether or not the bottom was actually hit (and I will not argue with those who say there is another leg down due to all the foreclosures that continue to pile up, particularly as the banks face facts), one thing is for sure; unless you tell me we’re about to enter an inflationary spiral, a la the 1970s and early ‘80s, you can forget any rally in home prices.
Speaking of inflation, with all due respect (a term that is code for “I think those on the other side are morons”), if you’ve grown up understanding that labor is the chief component of the vast majority of products that we use, how the heck can you build a case for inflation, especially when you all know capacity utilization remains in the dumper?
Check this out. From a story by Laura Slattery of the Irish Times, Nov. 5.
“Living standards in Ireland are likely to remain ‘permanently lower,’ the Organization for Economic Cooperation and Development (OECD) said yesterday in a new report on Ireland.
“Lower wages are necessary to restore stability to the economy, the organization said, while consideration should be given to reducing the minimum wage over time.”
Reducing…a concept that we are beginning to see applied in a few states here. Continuing….
“Jobseeker’s benefit and assistance payments should also be cut in line with falling prices, according to the OECD’s survey of the economy….
“The OECD, to which 30 of the world’s developed economies belong, puts forward its view of how the Irish economy may be restored to long-term sustainable growth after a period of ‘unusually large’ economic unbalances.”
Well, I’ve long documented the plight of the Irish, after traveling there 17 times in the past 20 years, and many of their problems are not dissimilar to what we’ve seen in the United States; a tremendous real estate bubble being first and foremost and a crushing of the wealth effect.
“The tentative global economic recovery now under way is threatened by stagnant or falling wages in many countries that will limit household spending, the International Labour Organization warned on Tuesday.
“In its latest global wages report, the UN agency says growth in real wages, adjusted for inflation, slowed sharply in 2008 and ‘the picture…is likely to get worse in 2009.’
“ ‘The continued deterioration of real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early….
“Growth in real monthly wages slowed from 4.3 percent in 2007 to 1.4 percent in 2008 among the 53 countries for which recent data were available. But real wages stagnated or declined in more than a quarter of those countries, including some of the world’s biggest economies such as the U.S., Germany, Japan and the U.K.”
So with the above in mind, a brief segue into gold, which soared above $1100 this week, thanks to the Fed’s pronouncement it would keep rates at zero, forever, because the economy wasn’t about to come roaring back, thus the dollar wasn’t a screaming buy, and India’s central bank’s purchase of 200 metric tons of the stuff, presaging similar moves by other central banks down the road, including China with its massive reserves.
If those are your reasons for buying gold, fine. I’m not as upbeat on America’s future as Warren Buffett, while other countries are becoming bigger players on the global stage, versus, say, the 1950s when America was like 70% of the global economy, so diversification of assets if you’re a central bank only makes sense. Just understand that over the next five years, a poll of institutional investors for Barron’s shows 92% still believing the dollar will remain the world’s reserve currency, as do I. [For ten years, though, the percentage plummets to 57%.]
But if you’re buying gold as an inflation hedge, as Dick Vitale would say, “Are you kidding me?!” It’s not….never has been, never will.
Which in a roundabout way brings me to Iran. Surprisingly, no one this week was talking about buying gold for geopolitical reasons, which would be a good one. In fact, the situation with Iran got immeasurably worse, again, this week, but it wasn’t on anyone’s lips. Yes, I did catch Bill O’Reilly one night and he and Karl Rove brought it up but only in the context of President Obama levying harsher sanctions (admittedly important, as noted below), yet not one word about Israel, which is the real story. Before I continue, though, to finish on the gold topic, one word of advice. Should all hell break loose, as I think could be the case, and if you tell me that there is a direct correlation between gold and the dollar, as there basically has been, then just be forewarned that if Israel attacks Iran, what will happen to the dollar? It will soar! Does the direct correlation then continue with gold or does the “safe haven” aspect of the shiny metal overcome the dollar aspect? I don’t know. Not one person I have heard or read as ever brought this up.
[And remember, regarding the price of oil, you heard it here first awhile ago. Yes, it would spike immediately to $130 or higher, but just as quickly Saudi Arabia will announce they are flooding the markets with the 4 million barrels in excess capacity that they currently have. The Saudis know as much as anyone that very much above the current $80 the global economic recovery is in jeopardy. A return to new highs would send us spiraling into depression.]
So this week Iran was convulsed again by protests on the day ‘celebrating’ the 30th anniversary of the takeover of the U.S. Embassy in Tehran, only whereas in past years on this date the protests were one-sided (“Down with America”), this time the courageous opposition leaders Mousavi and Karroubi led anti-government protests that were beaten back by the increasingly scary (if that was even possible) Revolutionary Guards and their Basij paramilitary force. As Iran expert Ray Takeyh observed in the Washington Post:
“International scrutiny remains trained on Iran’s nuclear program, but outside that glare, the structure and orientation of the Revolutionary Guards are changing dramatically. The regime in Tehran is establishing the infrastructure for repression….Indeed, the commander of the Revolutionary Guards, Mohammad Ali Jafari, warned in a speech last month that the structural changes were intended to ‘take on cultural divisions and the opposition to the soft war.’ To oversee the new campaign of repression, Mohammad Reza Naqdi, formerly deputy director of the Quds Brigades intelligence apparatus, has been appointed head of the Basij. Hossein Taeb, the notorious former commander of the Basij, has assumed leadership of the Guards intelligence bureau. Both have a history of involvement in torture and assassination campaigns at home and abroad, and they have imprisoned journalists and reformist politicians on trumped-up charges.”
So what is the Obama administration doing? Dealing with an oppressive regime, and with a president who won a clearly fraudulent election…while refusing to support the heroic opposition because we don’t want to jeopardize talks on the nuclear weapons front?!
This is insane. As the Wall Street Journal editorialized, the Obama policy is simply one of total appeasement, a full betrayal of the Iranian people.
It makes you want to scream. I’ve held a little secret from you all the past few years. Remember when I suddenly ended up in Morocco in 2007? It was because the bastard Iranians turned down my request for a visa at the very last moment (literally) but with non-refundable tickets to and from Paris I switched plans on the dime. [By the way, to get a visa to Iran, since we don’t have diplomatic relations, obviously, you go through the Pakistani Embassy in Washington…who then forward your request to the Iranian Consulate, etc., but I digress….]
As sharp as the Iranians are when it comes to playing their stall game, however, they also contain an idiot gene, and so it was that this week Iran supplied Israel with critical evidence at the worst possible time in the form of the seizure of a ship from Iran, bound for Syria, that was loaded with “tons” of weapons (mostly missiles) that in turn would be turned over to Hizbullah. Israeli Prime Minister Netanyahu was thus able to say:
“Iran is sending these weapons to terror organizations to harm Israeli cities and kill its citizens. The time has come for the international community to exert real pressure on Iran to stop this criminal activity and to support Israel when it defends itself against these terrorists and their patrons.”
Israeli President Shimon Peres, one of the more underrated world figures of the past century, I’ve come to conclude the past few months when you take his life in full, added that while Iran and Syria of course issued denials, “the world is aware of the gap between what Syria and Iran say and how they actually act.” This is also but the tip of the iceberg, as any follower of the arms buildup in Lebanon, and Gaza, knows. Speaking of Gaza, Israeli intelligence this week said Hamas was testing missiles with a range that can strike deep into Tel Aviv.
[Syria’s foreign minister, incidentally, tried to convince the world the above ship contained “imported goods from Syria to Iran,” nothing more, to which Lebanon’s moderate Daily Star observed, “It was unclear why (the minister) said the ship was headed in the opposite direction of that claimed by Israel. Syrian officials were not immediately available for comment.” Well, in all respects, Syria has been an Iran wannabe, you understand, kind of like the relationship between Mussolini and Hitler.]
Israel had an important backer this week when German Chancellor Angela Merkel addressed a joint session of Congress on Tuesday, saying in part:
“An [Iranian] president who denies the Holocaust, threatens Israel and does not recognize its right to exist cannot be allowed to possess nuclear weapons. The security of Israel is not negotiable…Whoever threatens Israel threatens us.”
So what of the Iranians this week, aside from beating up protesters? They refuse to officially respond to the U.N. proposal they initially signed off on and part of the reason is there are significant internal divisions within the Iranian leadership, which the White House should be exploiting.
For starters, many in parliament hate President Ahmadinejad and from my reading of local press there, there is a big battle over who is to control what they call the excess oil revenues. Parliament wants to, while Ahmadinejad said his cabinet should. This is not a small item.
You also have a situation where many in Iran don’t want Ahmadinejad to be able to claim any successes on the negotiation front, thus a reason for the delay in a response to the plan for shipping out Iran’s uranium to be enriched by Russia and France for medical use.
Iran also says it wants to change the original proposal, as well. But I saw the following in the Khaleej Times, which supplies a lot of clues as to where we’re headed. Supreme Leader Ayatollah Ali Khamenei “lashed out at the United States on Tuesday, saying Tehran will reject any talks backed by its arch-foe because Washington is not to be trusted.
“Khamenei’s salvo raised the possibility that a Washington-backed nuclear fuel deal for a Tehran research reactor may be derailed, despite world powers turning up the heat on Iran to accept the UN-brokered offer….
“ ‘Every time they have a smile on their face, they are hiding a dagger behind their back,’ said the country’s top cleric who has the final say on all Iranian national issues.
“ ‘Iran will not be fooled by the superficial conciliatory tone of the United States,’ he said in a speech to students on the eve of the 30th anniversary of the seizure of the U.S. Embassy in Tehran by Islamist students….
“ ‘(In) the past eight months what we have seen (from Washington) is contradictory to what they say. They are telling us to negotiate, but alongside the negotiation there is a threat that if the negotiation does not bear the desired results, then we will do this and we will do that.
“ ‘We do not want any negotiation, the result of which is pre-determined by the United States,’ he said, adding that Tehran will always pursue its ‘scientific and technological rights and freedom.’”
What more does the White House need to know? I have no problem with President Obama having given negotiations a shot for one reason…to show the world we went the extra mile and expose the Iranians for the terrorist frauds they are once and for all.
But now is the time for action. Harsher sanctions, immediately. If Russia and China won’t go along, then Obama has to lead (that’s what we’re paying the guy for, after all) and get Britain, France and Germany on board. The tougher we make life for the average Iranian, the better chance we have of the people completing the revolution that is simmering today.
But of course I really don’t think this is what Obama will do, which is why I believe Israel will attack, sooner than later…and you saw that new report on a topic I broached long ago, that Iran may already have finished its research on the weaponization element for its soon-to-come nukes.
I also got a kick out of the International Atomic Energy Agency and their inspection at the once secret Qom facility. The preliminary findings, as put forward by departing IAEA chief Mohamed ElBaradei, are that Qom is merely a backup facility, “in case Natanz was destroyed.” ElBaradei, the slimy snake, must have been beaming, while your editor smugly concludes:
Dear Reader, what have I been telling you the past few months. This isn’t about Israel’s ability to attack 130 different sites to set back Iran’s program, as some offer. It’s about Natanz. Israel will take out Natanz.
And for this reason I said last week that now is not the time to be committing fresh capital to the stock market. It is a time for caution. I have been careful to avoid saying, however, that I’m issuing an outright sell. I may yet do that.
Just a note on health care, with the House preparing to vote on the Democrats’ version possibly today, Saturday, though the Senate could be debating their own proposal until year end, Christmas, which makes some of us giddy as school boys because it leaves hope that the whole idea will yet be quashed since if it goes into next year then you have the mid-term election issue and congressional candidates running against what would then be perceived to be an even more unpopular plan.
[For new readers, I subscribe to the belief that there are so many simple steps we could be taking as a nation to reduce health care costs that a broad-based effort, as currently written, is not needed…see archives for “Paul O’Neill,” for starters. I also totally agree with the following sentiments as expressed in an editorial for the Wall Street Journal.]
“Speaker Nancy Pelosi has reportedly told fellow Democrats that she’s prepared to lose seats in 2010 if that’s what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a ‘critical milestone,’ may well be the worst piece of post-New Deal legislation ever introduced.
“In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.
“Yet at this point, Democrats have dumped any pretense of genuine bipartisan ‘reform’ and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be ‘universal coverage.’ The result will be destructive on every level – for the health-care system, for the country’s fiscal condition, and ultimately for American freedom and prosperity….
“Mr. Obama rode into office on a wave of ‘change,’ but we doubt most voters realized that the change Democrats had in mind was making health care even more expensive and rigid than the status quo. Critics will say we are exaggerating, but we believe it is no stretch to say that Mrs. Pelosi’s handiwork ranks with the Smoot-Hawley tariff and FDR’s National Industrial Recovery Act as among the worst bills Congress has ever seriously contemplated.”
–Stocks broke their mini-losing streak with a uniformity of returns, all the major averages finishing up 3% on the week as the Dow Jones closed above 10000 (10023). Friday’s upgrade of Dow component GE helped as that stock rose 6%. It was the first weekly close above 10K for the Dow since Oct. 2008, this despite the dreadful labor picture. We also learned at week’s end that consumer credit fell an 8th straight month in a further sign of retrenchment.
And in terms of the small businesses I wrote of in the beginning, it doesn’t help that key lender CIT finally filed for bankruptcy, yet another blow for those companies seeking credit, CIT catering to the small- and medium-sized market. They vow to emerge from Chapter 11 soon, but it will be a far smaller operation, so retailers in particular are scrambling for alternatives.
–I thought it was important that MasterCard, as part of its earnings release, said “The economic downturn has continued to affect consumer and business spending during the quarter. We don’t expect any global economic improvement until sometime in 2010.”
–U.S. Treasury Yields
With the Fed giving no signs of hiking rates for the foreseeable future, bonds rallied on the short end, but rates rose some on the long end largely on the feeling that the economy is getting its act together.
–With the unemployment rate the highest since 1983, recall that back then the Dow Jones bottomed in Aug. 1982 and then rallied after Henry Kaufman said the Fed was preparing to lower rates as the original Dr. Doom gave the all-clear signal in one of the most important market calls in the history of Wall Street, Aug. 17, the market having bottomed at 776 on Aug. 12. The market took off as the Fed then followed up days later by cutting the discount rate and the great bull market was underway.
–I found the following from a Bloomberg story by Kathleen Howley on real estate values quite enlightening.
“While prospects (for home prices) are grim in some areas, it wouldn’t be the first time prices made a comeback. The median U.S. home value tumbled 39 percent during the 1930s to $2,938 from $4,778 at the start of a decade dominated by the Great Depression, according to the Census Bureau.
“Within 10 years the loss was erased, as servicemen back from World War II began buying houses financed with G.I. Bill benefits. The median home value increased to $7,354 by 1950, an average gain of 6.2 percent each year during the 1940s.
“In the 1950s, home values surged an average of 15 percent a year, according to the Census. In the 1960s, the pace dropped to 4.3 percent before jumping to 18 percent a year in the 1970s, boosted by a U.S. inflation rate that reached 13 percent. In the 1980s, the average annual increase was 6.8 percent. The pace dropped to 5.1 percent during the 1990s.
“If (the National Association of Realtors’) forecast for a median home price of $172,700 this year is correct, it would put the average annual increase at 2.5 percent during this decade even with the collapse of prices.”
[Separately, the first-time home buyer credit was extended until April 30, fraud and all, with homebuilders insisting this was critical to further stabilization in the sector.]
–On the international front, China’s commerce minister said if countries “withdraw the stimulus measures now, the global economy will plunge.” China’s purchasing managers index for October came in at a strong 55.3, while the World Bank raised its GDP forecast for China this year from 7.2% to 8.4%, and for Asia as a whole from 5.3% to 6.7%, though I hasten to add the latter figure would be just 1% ex-China. Morgan Stanley economist Stephen Roach also throws in his two cents that a full 88% of China’s growth is dependent these days on infrastructure spending.
For its part, Hong Kong’s PMI for the month came in at 54.6. It was just a year ago I was there and I recall seeing crowds in the malls but zero shopping bags, yet it appears this thriving center of capitalism has made a rapid comeback.
In Japan, auto sales surged for October, as they did in Germany and France, while in the U.K., factory production rose a solid 1.7% in September, and home prices there rose for a fourth straight month. Back to France, its economy appears to be the strongest in Europe these days.
–In the U.S., auto sales for October revealed a generally solid rebound following September’s disaster, which came on the heels of the expiration of cash-for-clunkers, Aug. 24. Ford’s were up 3.3%, as it also shocked the Street with a $997 million net income figure for the quarter. GM’s sales rose 4.7%, Hyundai’s soared 49%, Nissan’s 5.6%, and Toyota’s and Honda’s were essentially flat. But Chrysler’s plunged 30% as their new chairman laid out his plan for the future, including all the new Fiat models, but survival in the interim is the big question. I hope they do…as long as it doesn’t cost the taxpayers any more money.
–Interesting point on the House and Senate health bills, both of which would prevent insurance companies from denying coverage to anyone with preexisting conditions, per economist Martin Feldstein and his Washington Post op-ed.
“This well-intentioned feature would provide a strong incentive for someone who is healthy to drop his or her health insurance, saving the substantial premium costs. After all, if serious illness hit this person or a family member, he could immediately obtain coverage. As healthy individuals decline coverage in this way, insurance companies would come to have a sicker population. The higher cost of insuring that group would force insurers to raise their premiums. [Separate accident policies might develop to deal with the risk of high-cost care after accidents when there is insufficient time to buy insurance.]
“In an attempt to prevent this, the draft legislation provides penalties for individuals who choose not to buy insurance and for employers that do not offer health insurance. But the levels of these fines are generally too low to cause a rational individual to insure.”
[Say $1,875 for a married couple with a median family income of $75,000 that would be subject to a fine of 2.5 percent on that amount. An individual with income of $50,000 would face a fine of $1,250 when the average cost of an individual policy is $4,800.]
–You know my steel indicator? Production fell last week for only the 2nd time in 27 weeks, so it bears watching when one talks of sustainability of the recovery.
–And if we’re talking about a global recovery, you have to look at someone like the Royal Bank of Scotland, as troubled as they come, which reported a loss of $3 billion for the quarter and is laying off 3,700 in its branch network.
–The Street was rocked with the latest arrests related to the Galleon Group insider trading case, an additional 14 individuals in a ring that Manhattan U.S. Attorney Preet Bharara said took “a page from the drug dealer’s playbook,” using “hard-to-trace, pre-paid cellphones in order to avoid detection.”
The ringleader, codenamed “the Octopussy” for having so many arms in different deals, was observed at one point removing the SIM card from his disposable cell phone and destroying it by biting it in half. As SEC Enforcement Director Robert Khuzami said at the press conference announcing the latest arrests, “If you find yourself chewing the memory card in your cell phone to destroy any record of your misconduct, something has gone terribly wrong with your character.”
Ah yes, Wall Street…there are far more dirtballs than you can even imagine that call this place home.
–General Motors abandoned its planned sale of Opel to Canada’s Magna and Russia’s Sherbank, causing Germany and Russia to react furiously, though the UK is celebrating. It all depends which plants GM plans to keep and which would be closed. At the same time, the German government had previously offered to support GM financially, and now Berlin is requesting GM pay back a $1.5 billion bridge loan.
For his part, Russian Prime Minister Putin said GM’s about-face would leave a bitter taste in some European mouths.
“We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us. GM did not warn anyone, did not speak to anyone…despite all the agreements reached and documents signed. Well, I think it is a good lesson.”
–The initial public offering market has been heating up, a good sign, but the performance of the IPOs has largely been dismal, threatening further offerings. But thanks to the feuding Pritzker family, the Street was able to point to a rousing success as descendants of the founder sold all their shares in the Hyatt Hotels chain to the public and the stock shot up 12% on its debut.
–CBS Corp.’s earnings report offered hope ad trends are finally improving. Sumner Redstone, executive chairman and controlling shareholder, told analysts, “The light at the end of the tunnel continues each day to get brighter.” Revenues in the radio, outdoor billiards and online sites fell for the quarter, but television revenues grew 9 percent as CEO Leslie Moonves said prices for spot TV ads in the fourth quarter were up 25 percent.
–Sirius XM Radio’s subscriber base appears to have bottomed, down 2% from last year but up 103,000 from the second quarter.
–As the climate change debate heats up ahead of the Copenhagen summit, one of the more contentious issues is the future of Canada’s tar sands, which contain 174 billion barrels of proven reserves, the world’s second-largest after Saudi Arabia. With improved technology, the total that could be extracted may be between 315 billion and 1.7 trillion barrels.
The issue is, “fully exploiting the tar sands would…tip the world into catastrophic climate change by raising global temperatures more than 2C above pre-industrial levels. Extracting each barrel of crude from the sticky mass of sand, clay and bitumen produces two to three times as much CO2 as drilling for a barrel of conventional oil.”
It’s also about the PR game and thus far the companies exploiting the tar sands are doing a miserable job of it. As Ben Webster (who was responsible for the above quote) of the London Times adds:
“Syncrude, which operates one of the biggest mines, is working hard to improve its image and recently handed back its first piece of ‘reclaimed land’ to the Canadian Government. Publicity photographs show imported bison and young trees, but when you visit you realize that this is less than half a square mile on the edge of a wasteland of mines and toxic lakes….
“In April last year 1,600 ducks died after landing on an oil slick on one of Syncrude’s lakes. It took a full year for the company and Alberta’s environment agency to admit the scale of wildlife loss. To ward off another PR disaster, Syncrude has filled the lakes with orange scarecrows, known locally as bit-u-men.”
But Canada is in a bind. It has a reputation for being progressive on the environmental front, but it’s hard to explain away the tar sands. On the other hand, the sands employ 112,000 (when the price of oil is around current levels…far less when oil is below, say, $60). It’s a fascinating topic, for you college students out there looking for a good research project. Go for it.
[Meanwhile, this coming week the International Energy Agency is making a “substantial” downward revision to its long-term global demand forecast for oil…more on this next time when the figures roll in. One clue, the IEA will be focusing on “demand-management policies” in the developed world, which represents 55% of current world oil consumption. On the natural gas front, the IEA is already talking of a gas glut, which is likely to become greater with further conservation efforts, even as it gains further traction due to its clean image. This will hurt Russia’s state-owned Gazprom in particular.]
–An extensive McClatchy Newspaper investigation has found that Goldman Sachs “peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages (in 2006 and 2007), but never told the buyers it was secretly betting a sharp drop in U.S. housing prices would send the value of those securities plummeting.”
While the above was talked about in the days after last year’s financial collapse, the issue is did Goldman violate any securities laws. Laurence Kotlikoff, a Boston University economics professor says, “This is fraud and should be prosecuted.” John Coffee, a Columbia University law professor who served on an advisory committee to the New York Stock Exchange, said it hinges on what Goldman executives knew at the time. “It would look much more damaging if it appeared that the firm was dumping these investments because it saw them as toxic waste and virtually worthless.”
A Goldman spokesman told McClatchy that the firm “had no obligation to disclose how it was managing its risk, nor would investors have expected us to do so…other market participants had access to the same information we did.”
The past few months, though, many of the pension funds that were burned investing in the garbage have been fighting back and in May, without admitting wrongdoing (par for the course in such matters), Goldman became the first firm to settle with the Massachusetts attorney general’s office, agreeing to pay $60 million to the state, most of it to reduce mortgage balances for 714 “aggrieved homeowners.” [Greg Gordon / McClatchy-Tribune News Service; Star-Ledger]
I had to bring the above up because, again, while not necessarily breaking news, it’s yet another reminder of how the Street jerked the rest of us schleps around and why the same Street denizens shouldn’t be shocked to learn the ill will that has been built against them is not likely to go away for a generation.
–A Wall Street Journal study found that pensions for top executives, tied to pay as well as years on the job, surged an average 19% in 2008, “even as the share prices at the companies declined an average of 37% (that same year) and many firms froze employee pensions and suspended retirement-plan contributions.”
–New York Attorney General Andrew Cuomo sued Intel Corp. over antitrust claims, alleging Intel threatened computer makers and made $billions in illegal payments to pressure the manufacturers to use its chips.
“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” said Cuomo. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”
Earlier this year, the European Union levied a record $1.57 billion antitrust fine following an eight-year investigation which Intel is appealing. The company argues that consumers are actually benefiting from lower prices and innovation.
According to Mercury Research, Intel has an 81.5 percent share of the market for PC processors, with chief rival AMD at 18 percent.
–Stanley Works and Black & Decker Corp. agreed to a merger of the two tool makers, both of whom have suffered with the collapse in the housing market in particular. The two would have combined sales of $8.4 billion and about 40,000 employees, and the companies expect to achieve savings of $350 million a year. The new company will be called Stanley Black & Decker, which sounds more like a law firm than anything else.
–Wind power produces only about 1.5% of our nation’s electricity these days and if the Obama administration wants that percentage to rise considerably, it needs to get rid of the bureaucratic logjam that is preventing new projects from coming onstream. The Department of Energy has offered to back $750 million in loans to finance renewable energy projects but the lengthy application process is blocking them.
–The number of golfers belonging to country clubs is down to 2.1 million – 900,000 below the peak in the early 1990s. One analyst of the industry believes “at least 400 – and worst case, 1,000 – private clubs may be forced to close, convert to public play, or be absorbed into healthier clubs before the carnage is over.” [Dean Foust / BusinessWeek]
–Former Motorola researcher Martin Cooper, the inventor of the mobile phone, says the devices have become too complex. The 80-year-old, speaking at a conference in Madrid, said, “Whenever you create a universal device that does all things for all people, it does not do any things well. Our future I think is a number of specialist devices that focus on one thing that will improve our lives.”
In 1984, only 300,000 owned those first cumbersome phones that weighed a ton. Today, more than four billion own one.
–In a highly positive development in terms of U.S.-China relations, Disney received permission to build a theme park in Shanghai, capping years of on-again-off-again talks between the company and Shanghai, reflecting the tough road western media companies have had establishing a bulkhead on the mainland.
–The America’s Cup yacht race appears headed to Australia as officials for Alinghi, the Swiss boat that is the defending champion, and American challenger BMW Oracle Racing battle it out over the original choice of United Arab Emirates as the site. The race is supposed to start in February and the two sides are fighting over a stipulation in the 19th-century Deed of Gift that the America’s Cup cannot be sailed in the Northern Hemisphere between Nov. 1 and May 1. Good lord.
I bring this up only because the Oracle entry of course has the support of one of my least favorite people in the world, CEO Larry Ellison, and I had to laugh at a story this week that “The 200-foot mast on BMW Oracle Racing’s 90-fooot trimaran broke while the boat was undergoing testing in the Pacific Ocean. The carbon-fiber mast is estimated to have cost $10 million.” Ellison can afford it. But in this time of economic stress for the average American (Brit, Frenchman, Mexican…), it’s best Mr. Ellison try and keep such stories quiet.
–Alabama and West Virginia have passed laws increasing the legal alcohol-by-volume cap for beer from 6% to as high as 13.9%. Which means one thing….I’d stay off the road after about 9:00 p.m. in both states. No telling the condition of the driver approaching you after then.
–We note the passing of Sonic drive-in founder Troy N. Smith Sr., 87. From Javier C. Hernandez / New York Times:
“One day, while driving along the Texas-Louisiana border, (Smith) grew giddy at the sight of a fast-food joint with a car-to-kitchen intercom. He asked the owners for a replica of the audio system, and he soon made it the centerpiece of his root beer stand in Shawnee, Okla.”
Personally, I took note of Shawnee being where it all started because the summer between my sophomore and junior years in college I sold books door-to-door in Oklahoma and Kansas, with the first stop being Shawnee where my roommate and I spent the first two weeks. My very first sale was on the Shawnee Indian Reservation with cockroaches crawling all around me. It didn’t improve much from there but I stuck it out the entire summer as I cemented my still-existing record (I imagine) of being the worst salesman in the history of the Southwestern Book Co. I did learn, however, to solicit glasses of water as I walked in the stifling heat. [Act like if they don’t get you one, they’ll have a dead body on their stoop.]
Afghanistan: As rumored, Abdullah Abdullah bowed out of the runoff that had been scheduled for today, saying that there had been zero change in the electoral commission that held the first fraudulent vote so why would things be any different the second time around. Abdullah, though, also knew he wasn’t going to come close to winning even if it was a clean vote. He did, however, play the role of statesman in urging his supporters not to take to the streets.
So the vote was then canceled and Hamid Karzai is president for another five years, heading up a totally illegitimate, hopelessly corrupt government that controls only 30% of the land to begin with. The White House, and others with troops in the field such as Britain’s Gordon Brown, told Karzai he must reform, starting with those who take up positions in his new administration, but Karzai is showing no signs of complying. It also didn’t help that when looking at security, the UN opted to relocate over 600 staffers out of Kabul following an attack on a safe house that killed five (as well as five others). Not exactly a positive sign after eight years of war.
In the meantime, President Obama still hasn’t decided on General McChrystal’s proposal for an additional 40,000 troops.
George Will / Washington Post
“The U.S. mission – whatever it is; stay tuned – in that fractured semi-nation depends on substantially increased competence and radically reduced corruption among the strangers governing in, if not much beyond, Kabul. One stranger is Afghanistan’s president. We are getting to know him well.
“On Jan. 29, 2002, just 114 days after the U.S. intervention in Afghanistan began, President George W. Bush, during his State of the Union address, introduced to a joint session of Congress and to a national television audience a man in the gallery of the House chamber – ‘the distinguished interim leader of a liberated Afghanistan, Chairman Hamid Karzai.’ Interim no more, he has won – or at least secured – another five years in office….When it was reported that Abdullah was thinking about withdrawing, Secretary of State Hillary Clinton’s response was inane: ‘We see that happen in our own country where, for whatever combination of reasons, one of the candidates decides not to go forward. I don’t think it has anything to do with the legitimacy of the election.’ So, Afghanistan is just like America – candidates decide ‘not to go forward.’
“After hearing that Abdullah would withdraw, Clinton said, ‘I do not think it affects the legitimacy…When President Karzai accepted [the runoff] without knowing what the consequences and outcome would be, that bestowed legitimacy from that moment forward.’ So, the U.S. government chooses to believe that legitimacy descends upon Karzai simply because he agreed to another election controlled by his operatives. Such desperate sophistry is dismaying evidence of the mentality of the Obama administration as it contemplates the military’s request for a substantial increase of U.S. forces, just eight months after the latest increase.”
George Will is against any further surge in Afghanistan and would like to see the U.S. pull out altogether. Robert Kaplan has the opposite viewpoint, as expressed in an op-ed I saw in The Oregonian.
“Obama’s wobbliness (has) a corrosive effect on the Indians and the Iranians.
“India desperately needs a relatively secular Afghan regime in place to bolster Hindu India’s geopolitical position against radical Islam, and while the country enjoyed an excellent relationship with Bush, Obama’s dithering is making it nervous.
“And Iran, in observing Washington’s indecision, can only feel more secure in its creeping economic annexation of western Afghanistan. So, too, other allies far and wide – from the Middle East to East Asia, and Israel to Japan – will start to make decisions based on their understanding that Washington under Obama may not have their backs in a crisis. Again, the awarding of the Nobel Peace Prize to Obama only plays to such fears.
“Obama needs to get behind his chosen general as soon as possible and put this spectacle of indecisiveness behind him. Gen. McChrystal must become the face of a policy that is supported at every level of the administration, just as Army Gen. David Petraeus was the face of the surge in Iraq during Bush’s last two years of his presidency. Obama must capture the toughness and competence that Bush displayed as a war leader at the end of his term.
“Otherwise, in the coming months, the Democrats may be seen as having lost a war. And if that happens, not even the Nobel Peace Prize will rescue Obama’s reputation.”
And then there was the incident early in the week where an Afghan policeman turned his gun on British soldiers he was working with and killed five of them. You just have to believe me when I say that upon learning this I had thoughts exactly like what then happened at Fort Hood days later, so I’ll write them anyway.
The Afghan turning on the Brits is one of the most significant acts of the entire war, not because it’s the first time this has happened, it’s not, but because it may have been a tipping point in terms of British support for the war. It’s also a scary reminder of the risks we face in training the massive Afghan army and security apparatus that we hope will eventually enable NATO to pull out.
The Afghans are not good people. Period. This is a lost civilization. They’re nothing but a bunch of illiterate junkies, save the women who continually deserve our prayers.
So I immediately thought, what is to prevent a brigade of Afghans, whose true allegiances we can only guess at, from turning on a hundred or so Americans or Brits at, say, some kind of celebration. Who is to stop 3 or 4 Afghans that we trained and whose trust they’ve gained from walking into one of our mess halls and blowing themselves up, having smuggled bomb belts inside the base beforehand, for example.
And it was in this context I was prepared to write that what is unsettling is that whereas you’ll have the incident of a troubled American soldier, or British, or French taking out his frustrations on his own, as has been the case through time, in Afghanistan this week we had a similar situation, but with far more troubling consequences for the future.
Then Fort Hood happened. The story is so heavily covered at this point I can’t offer anything else, just to note that two weeks ago I concluded with the following:
"The news on some of the following bases is often not good; posts with the highest number of soldier deaths during combat operations in Iraq and Afghanistan since October 2001. [Thru Oct. 8, 2009]
1. Fort Hood, Texas…519
2. Fort Bragg, N.C. …303
3. Fort Campbell, Ky. …268
4. Fort Lewis, Wash. …220
5. Fort Carson, Colo. …218
6. Fort Drum, NY …204
7. Fort Stewart, Ga. …198
These communities deserve our continual thoughts and prayers; they’ve been through a lot, and more so after this week. I’ll trust the authorities to give me the truth when it comes to Maj. Hasan.
Israel: Back to Secretary of State Hillary Clinton and George Will’s comment above on her performance in Afghanistan, before I state my own opinion of her week, understand I have generally been supportive of both her selection as secretary of state and some of her efforts to date but it was clear this week the only way to describe her performance in both Afghanistan and the Middle East was she played the part of village idiot.
First, representing the administration, she did a complete about-face on the settlements issue. Whereas the White House had initially taken the correct step of applying more pressure on Israel to cease with all settlement construction [at which point they should have demanded the Palestinians and others such as Saudi Arabia, Egypt and Jordan respond in kind…to then expose once and for all the ludicrous nature of the debate as the other side failed to comply…but the Obama administration didn’t], suddenly there was Clinton praising Israeli Prime Minister Netanyahu’s approach for proceeding with the settlements, while restarting peace talks, because the Palestinians should not let the settlement issue impinge on negotiations. This after the administration had consistently said Israel had to cease all activity.
So the Palestinians and its allies were duly ticked off that the White House was no longer demanding a ‘freeze’ as a precondition for talks and it was the administration that hung Palestinian President Mahmoud Abbas out to dry, Abbas having previously been forced to be conciliatory in tone as the White House worked on Netanyahu. Clinton spent the rest of the week backtracking yet again to win back the Arab world as Abbas played the only card he had left…pulling out of January’s presidential vote in the hope that will scare President Obama into putting renewed pressure on Israel. So much for any goodwill generated by Obama’s Cairo speech in June. As Daniel Levy, a veteran Israeli peace negotiator, told the Washington Post, the administration’s efforts this week looked like “amateur night at the Apollo.” As reported by Glenn Kessler, Levy said “the administration did not game out the consequences of its demands on the parties – and then flinched. ‘They just dug deeper and deeper their own grave,’ he said.”
North Korea: What a royal pain in the ass this nation is. I mean how else to describe Kim Jong il’s regime?
This week, wanting to feel needed again, Pyongyang said it finished reprocessing spent fuel rods to extract plutonium used in the making of nuclear weapons, offering that the reprocessing of the 8,000 rods was completed the end of August and at its main Yongbyon complex. [Significant also because it’s an admission that Yongbyon, closed under previous agreement, is now back to its previous level of operation.]
The country “was compelled to take measures for bolstering up its deterrent for self-defense to cope with the increasing nuclear threat and military provocations of the hostile forces,” the central news agency reported. North Korea is insisting on direct talks with the United States as a precondition for restarting talks with China, South Korea, Japan and Russia. But lower level talks between North Korean and U.S. negotiators have already begun.
And while Chinese Premier Wen Jiabao held talks himself with Kim Jong il recently, China seems loath to pressure Kim over ongoing fears for the North’s stability and a potential flood of refugees into China should it collapse.
Russia: Shabtai von Kalmanovic, a former KGB agent turned basketball team owner, was gunned down just a few hundred yards from the office of President Putin. Remember that “third force” I’ve spoken of in Russia? This may have been an example of what I see as a real threat over the coming years.
Separately, two ultranationalists were arrested in one of the high-profile killings of human rights officials, this one in January that also claimed a reporter. The friends of the lawyer killed were far from being in a celebratory mood until the case is closed. Said one, “Will it be a jury trial? Will the prosecutors be able to prove their case? How much opportunity will there be to manipulate the jury? So this is not finished.”
[One of the men pleaded guilty on Friday, according to reports, but this is often not the final story here.]
At least President Dmitri Medvedev said ultranationalist attacks “are not simply grave crimes, but crimes which have great resonance in society.”
And after my comments last week on Russia’s glorification of the Mob, Medvedev did sign a tough anti-gangster law that allows for the arrest of those who even admit their roles. “We are talking about individuals who identify themselves with the criminal world and don’t hide this.” At the same time gangster ringleaders can be sentenced to life in prison. Trials will also be moved away from the regions where Mob crimes are committed, thus shielding judges. [No jury trials for the same reason.] All of the preceding should prevent such public gatherings as took place at the funeral of Vyacheslav Ivankov the other week.
Finally, back in 1991, a Pew Global Attitudes Project survey found 26% of Russians said the country should be for Russians only. Today that figure is 54%.
Poland: Officials here are furious that a September military exercise by Russia and Belarus evidently simulated an attack on Poland using nuclear weapons.
Ukraine: Prime Minister Tymoshenko ordered the schools closed for three weeks due to H1N1 but this has now become part of the presidential campaign here as President Yushchenko blamed Tymoshenko for not being prepared to deal with the flu; thus what makes you think she can be head of state. Of course Yushchenko is polling about two percent. While this goes on, Russia is licking its chops, convinced the winner will be a toadie of Moscow.
China: Beijing has been striking a conciliatory tone on the military front ahead of President Obama’s critical visit to China from Nov. 15 to 18. The vice foreign minister said, “I think that both sides want to promote exchanges and contacts between the two countries’ militaries, and especially to enhance strategic mutual confidence.” But the Pentagon worries it knows little about China’s true intentions, such as in developments on the missile front and cyber warfare, plus you have the comment from China’s air force chief this week that the weaponization of space is “inevitable.”
India: A Defense Ministry spokesman said, “The internal security situation in Pakistan seems to be deteriorating every day. We really don’t know for how long and how far its establishment would be able to adequately safeguard its strategic assets,” i.e., its nukes. India is also concerned about “dirty bomb” attacks. Think Mumbai, but with a twist.
Venezuela: President Hugo Chavez is sending 15,000 soldiers to the border with Colombia, claiming the buildup is needed to increase security as well as combat drug trafficking. Chavez’s vice president accused Colombia of allowing violence to spill over the border as a means of “destabilizing” Chavez’s government. “Colombia has been creating a pre-war atmosphere,” said Ramon Carrizalez. Critics of Chavez in Venezuela say he is trying to divert attention from the country’s myriad of problems, including the economy and rampant crime.
Honduras: Ousted President Zelaya will not be returning to power any time soon, according to a Honduran legislative committee that refused to call a special session of Congress to consider the matter, this after Zelaya thought a U.S.-brokered deal may allow him to run for reelection on Nov. 29 during a scheduled vote. The Obama administration trumpeted their success but the deal still leaves it up to Honduras’ Supreme Court and other institutions and there is no deadline for them to report back, ergo, the vote is likely to proceed without Zelaya before they even rule.
“While our forces give blood to defend a wretchedly corrupt government in Afghanistan that’s losing a civil war, Mexico’s postmodern drug armies kill American citizens and residents in our streets every single day – through their wares or direct violence.
“We have been invaded. Our response? Promise the outgunned Mexican government a few helicopters (eventually), neglect our borders, permit ‘sanctuary cities’ to protect narco-terrorists who’ve killed more Americans than al Qaeda has, prepare to reward drug-cartel invaders with U.S. citizenship – and declare this massive invasion a ‘law-enforcement issue.’
“Our government is failing, willfully, at its primary responsibility: to protect our citizens and defend our soil.”
European Union: Czech President Vaclav Klaus signed the Lisbon Treaty after a last effort to block it, complaining to the end the document hands too much power to E.U. institutions in Brussels. So the charter takes effect on Dec. 1. As to who will be the new president for the E.U., former British Prime Minister Tony Blair appears to still be in the running after all.
–Much was made of Tuesday’s election of Republican governors in both Virginia and New Jersey, but being a guy who is constantly urging everyone to ‘wait 24 hours,’ I hesitate to draw any lasting conclusions. I watched Fox News that evening and I was confused by some of the numbers they showed because what I saw in New Jersey in terms of exit polling (Edison Research…a consortium for the media) was hardly the blowout Fox made it out to be in terms of how independents voted. In New Jersey’s case it was 43-39 Christie among this group, with third party candidate Chris Daggett getting 15.
And in terms of whether the two gubernatorial races represented a referendum on Obama’s policies, in New Jersey, 19% say they voted to express support for the president, 19% said they wanted to express their opposition to him, and 60% said Obama wasn’t a factor in their vote.
I can also tell you that I didn’t receive one single note from my Republican friends saying, ‘Thank god Corzine is out,’ or ‘We did it!’ Why? Because everyone knows Christie has the potential to be a dreadful governor. The lack of enthusiasm for his campaign was warranted.
As for yours truly, I stood by my convictions and voted for Daggett, as I told you I’d do. In the end he got a measly 6 percent. [For the record, Christie won 49-45; Bob McDonnell kicked Creigh Deeds’ butt in Virginia, 59-41.]
I do have to say that in terms of candidates spending their own personal fortune, in three statewide elections, Jon Corzine used up $125 million of his own money and he was repudiated. Mayor Michael Bloomberg spent untold $millions in New York and just eked out a 5-point win over a horrible candidate (granted, many New Yorkers were upset with Bloomberg for ignoring the term limit laws). But the two should be examples for the likes of Meg Whitman, who has already spent $19 million of her own money to run for governor of California and is claiming that before all is said and done next year she’ll spend up to $150 million if need be. What the Corzine and Bloomberg examples show you is the public is increasingly wary of this kind of behavior.
–Tim Reid / London Times
“Predicting what will happen in U.S. politics is often a fool’s errand. Presidential fortunes can change with brutal speed and conventional wisdom is frequently turned on its head. Just ask George Bush Sr. in February 1991, at the end of the Gulf War, he had an approval rating of 87 percent. Less than two years later he lost the presidency to a little-known Arkansas Governor with a reputation as a womanizer.
“It is with such a sense of caution that Barack Obama looks to the future of his own presidency, because as a keen student of history he knows how quickly his fortunes could founder in the face of the challenges still ahead. After nine months in office Mr. Obama has reached a point where he is fully the custodian of America’s problems. He is still trying to blame the fragile economy and the mess in Afghanistan on his predecessor but that is no longer washing with voters. It’s his economy and his war.
“His greatest political problem is unemployment, which is set to pass 10 percent and is stubbornly refusing to follow signs that the recession has ended….
“There are other pitfalls. Afghanistan has become a complex war with no clear or near-term resolution in sight. There is still no guarantee that the signature of issue of his domestic agenda, universal health insurance, will get through Congress. The gargantuan deficit, now $1.4 trillion, has scared voters and become a huge impediment to the rest of Mr. Obama’s costly reform program. Iran has shown little sign of a positive response to Mr. Obama’s overtures. Another devastating terror attack on U.S. soil could be blamed on bungled U.S. leadership.
“Yet Mr. Obama always takes the long view, does not get rattled by the day-to-day political gyrations, and has some reason for optimism about the future and his hopes of winning a second term. He is more likely than not to get a health bill passed and the day he signs such legislation will be historic.
“One of his great assets is that he entered the White House with America’s myriad problems in plain sight. The economy had already crashed. Afghanistan was already a troubled conflict. The threat from Islamic extremists was known. So by the time he begins his reelection campaign Mr. Obama could well be hailing an economic recovery – and take all the credit. He could boast something no other president has achieved: universal health coverage. The Afghan war might have turned around. They would be very strong achievements to run on.”
–Charles Hurt / New York Post
“So this is the postpartisan politics President Obama promised us. You have a Democratic president who – although far from the messiah we were promised – still remains likable.
“Yet his policies – from his government-run health-insurance scheme to his No Big Company Left Behind platform – are highly unpopular.
“And last night he showed that he is utterly powerless when it comes to getting other Democrats elected.
“Take New Jersey, a state Obama carried last year by 15 points. It’s reliably Democratic.
“Obama went all in, visiting the state three times in which he made five appearances with incumbent Gov. Jon Corzine. Republicans put up a less-than-stellar candidate, Chris Christie, who ran a mediocre campaign and still managed to win.
“Results in Virginia were just as bad. Obama carried the normally Republican state by 6 points last year. He campaigned there for the Democratic hopeful, and Creigh Deeds aired soaring, urgent campaign commercials featuring the president that were reminiscent of the Obama campaign’s own iconic ads. Yet Deeds was trounced by Republican Bob McDonnell by some 18 points.”
–David Brooks / New York Times
“Independents, who are the largest group in the electorate…don’t have institutional affiliations. They don’t look to certain activists lobbies for guidance. There aren’t many commentators who come from an independent perspective….
“The first thing to say is that this recession has hit the new suburbs hardest, exactly where independents are likely to live. According to a survey by the National Center for Suburban Studies at Hofstra University, 76 percent of suburbanites say they or someone they know have lost a job in the past year.
“The second thing to say is that in this time of need, these voters are not turning to government for support. Trust in government is at its lowest level in recent memory. Over the past year, there has been a shift to the right on issue after issue. According to Gallup, the percentage of Americans who believe that there is too much government regulation rose from 38 percent in 2008 to 45 percent in 2009. The percentage of Americans who want unions to have less influence rose from 32 percent to a record 42 percent.
“Americans have moved to the right on abortion, immigration and global warming. Over the past seven months, the number of people who say government is doing too many things better left to business has jumped from 40 percent to 48 percent, according to a Wall Street Journal/NBC News poll.
“According to the same survey, only 31 percent of Americans believe that the president and Congress ‘should worry more about boosting the economy even though it may mean larger budget deficits.’ 62 percent, twice as many, believe the president and Congress ‘should worry more about keeping the deficit down, even though it may mean it will take longer for the economy to recover.’
“These shifts have not occurred because conservatives and liberals have changed their minds. They haven’t. The shift is among independents….
“This does not mean that independents are turning into Republicans. G.O.P. ratings are still in the toilet. But it does mean the Democrats have to fight to regain some of their most crucial supporters….
“Independents support the party that seems most likely to establish a frame of stability and order, within which they can lead their lives. They can’t always articulate what they want, but they withdraw from any party that threatens turmoil and risk. As always, they’re looking for a safe pair of hands.”
“When I see those in government, both locally and in Washington, spend and tax and come up each day with new ways to spend and tax – health care, cap and trade, etc. – I think: Why aren’t they worried about the impact of what they’re doing? Why do they think America is so strong it can take endless abuse?
“I think I know part of the answer. It is that they’ve never seen things go dark. They came of age during the great abundance, circa 1980-2008 (or 1950-2008, take your pick), and they don’t have the habit of worry. They talk about their ‘concerns’ – they’re big on that word. But they’re not really concerned. They think America is the goose that lays the golden egg. Why not? She laid it in their laps. She laid it in grandpa’s lap.
“They don’t feel anxious, because they never had anything to be anxious about. They grew up in an America surrounded by phrases – ‘strongest nation in the world,’ ‘indispensable nation,’ ‘unipolar power,’ ‘highest standard of living’ – and are not bright enough, or serious enough, to imagine that they can damage that, hurt it, even fatally.
“We are governed at all levels by America’s luckiest children, sons and daughters of the abundance, and they call themselves optimists but they’re not optimists – they’re unimaginative. They don’t have faith, they’ve just never been foreclosed on. They are stupid and they are callous, and they don’t mind it when people become disheartened. They don’t even notice.”
–Among the recipients of Jon Corzine’s largesse was a former staffer, Amanda Steck, 36, who, recently released financial records show, received $300,000 from the governor in December 2008 for a newly formed nonprofit. Several years ago, Corzine had given former union boss Carla Katz, a girlfriend, $6 million when they broke up. These days Corzine has been dating Sharon Elghanayan, 67. Ms. Elghanayan can expect to be dumped shortly, if she hasn’t already, but she, too, will receive an ample supply of parting gifts, including what’s behind the curtain where Carol Merrill is now standing.
–Former NYPD Commissioner Bernard Kerik pleaded guilty to eight federal counts, including lying to the White House when he was tabbed to head the Homeland Security Dept., as well as filing false tax returns. Kerik will likely serve 2-3 years in prison.
–Johnny Mac, who lives in eastern Pennsylvania, passed along the following from the Pocono Record Writer that will have you shaking your head.
“The Stroudsburg Area School District must discard 6,000 doses of swine flu vaccine because they were kept in conditions that were too cold, the district learned Monday….
“The district learned that it had to dump its doses because the refrigerator units housing them dropped 4 degrees below the allowable temperature range set by the Pennsylvania Department of Health….
“The vaccines for H1N1, or swine flu, must be maintained in temperatures between 35 and 46 degrees. Stroudsburg’s were observed at 31 degrees.
“ ‘It’s just not viable if it’s not kept at the right temperature,’ said Stacy Kriedeman, a spokesperson for the state health department.”
No kidding. 31 is below freezing, if I remember my lessons right. Like they freakin’ froze the stuff!
–The American Institute for Cancer Research, in an extensive study of the relationship between obesity and cancer, found that about 100,000 new cases of it are caused by the condition, including 33,000 cases a year of breast cancer and 20,700 of endometrial (uterine) cancer. So lose weight, people. [That means you, too, Gov.-elect Christie.]
–The founder of modern anthropology, Frenchman Claude Levi-Strauss, died just a few weeks short of his 101st birthday. After reading a few obituaries I’m going to have to get his 1955 tome “Tristes Tropiques,” an account of his travels that is considered one of the 20th century’s major works but one I frankly wasn’t aware of.
It seems that among Levi-Strauss’ conclusions was the idea that there is no fundamental difference between the belief systems and myths of so-called “primitive” races and those of modern western societies. [Such as never ‘hit’ on 17 in Blackjack.]
–Lastly, Nov. 9 is of course the 20th anniversary of the fall of the Berlin Wall, which some 28 years earlier went up and became a symbol of oppression. Political scientist Josef Joffe was there at both moments and commented in an op-ed for the Washington Post.
“Did I know that history was being made (on Aug. 13, 1961)? No, certainly not as the teenager I was back in 1961. But Karl Marx was right when he said that history plays out first as tragedy, then as farce.
“The tragedy came in two parts. Part One looked like the run-up to World War III, as battle-ready American M-48 and Soviet T-55 tanks took up positions on either side of the Brandenburg Gate. But given the deadliest rule of the Cold War – that whoever shoots first dies second – the worst was averted.
“Part Two was a 28-year prison term for the East Germans. Until 1961, some 3 million of them had absconded just by taking the subway from East to West Berlin, where they were flown elsewhere in West Germany. No more. The wall saved the so-called German Democratic Republic from death by a thousand cuts. Those East Germans who kept on trying to escape were shot by border troops or felled by killing devices triggered by trip wires.
“For me, on the western side, East Berlin might as well have been Beijing. It actually felt even farther, for I could have traveled to Beijing (just not through the Brandenburg Gate). East Berlin remained off limits for West Berliners until 1970, when you could get a one-day pass – but you had better be back before midnight. To this day, I know my way around Paris and New York better than around East Berlin.
“The wall divided the city, the country, the continent and the world. A million soldiers on either side – NATO in the West, Warsaw Pact in the East – plus thousands of nuclear weapons squelched all temptation to change this map by force. There was no end in sight, for how could the Soviet Union ever give up the very bastion of its empire in the West, the strategic brace of its possessions in Eastern Europe?
“But ultimately, it did – and this is when farce followed tragedy. Mikhail Gorbachev, the new kid on the Bloc, who had moved to the head of the Soviet working class in 1985, merely wanted to reform the empire, not relinquish it. But once this grip loosened, the empire evaporated in the ‘velvet revolutions’ of 1989.
“In East Berlin, it was pure slapstick. Guenter Schabowski, the ruling party’s propagandist, showed up at a news conference on Nov. 9 to announce eased travel policies. Totally unprepared, he was asked when the new rules were to go into effect. Flustered, he replied, ‘As far as I know…immediately, right away.’
“That was the end of the German Democratic Republic. Thousands of East Berliners soon thronged the wall, milling back and forth all night. Happily soused, they sang soccer ditties, not ‘Deutschland uber alles.’ The next day, East Berliners foraged farther into West Berlin, just to test whether they could get back in again – or to buy bananas.”
Joffe goes on to discuss, however, the huge divide that still exists between the two, such as the unemployment rate in the former East Germany is twice that in the former West Germany, even 20 years later.
Two years ago I went to Berlin for the first time and as I chronicled in this space, I spent a lot of time walking around, trying to get a hold on what was East and what was West, though the drabness of the former East often gave it away. Part of the problem was there is an infinitesimal portion of the Wall that still exists and I know many Germans today are unhappy they didn’t leave up more of it from an historical standpoint. This is a shame, but a reminder that in the euphoria of moments such as 1989, history can nonetheless be erased.
So it’s often left up to our leaders to ensure that we never forget. Such was an occurrence this past Tuesday, when German Chancellor Angela Merkel, who grew up in East Germany, addressed a joint session of Congress (the first chancellor since Konrad Adenauer in 1957 to do so).
“I thank the 16 million Americans who have been stationed in Germany over the past decades. Without their support as soldiers, diplomats and generally as facilitators it never would have been possible to overcome the division of Europe. We are happy to have American soldiers in Germany, today and in the future. They are ambassadors of their country in our country, just as many Americans with German roots today act as ambassadors of my country here.
“I think of John F. Kennedy, who won the hearts of despairing Berliners during his 1961 visit after the construction of the Berlin Wall when he called out to them: ‘Ich bin ein Berliner.’
“Ronald Reagan far earlier than others saw and recognized the sign of the times when, standing before the Brandenburg Gate in 1987, he demanded: ‘Mr. Gorbachev, open this gate…Mr. Gorbachev, tear down this wall.’ This appeal is something that will never be forgotten.
“I thank George Herbert Walker Bush for placing his trusts in Germany and then Federal Chancellor Helmut Kohl and presenting us Germans with an offer of immeasurable value in May 1989: ‘Partnership in leadership.’ What a generous offer, 40 years after the end of World War II. Just last Saturday we saw each other again in Berlin, along with Mikhail Gorbachev. We also owe him a debt of gratitude.
“Ladies and gentlemen, to sum it up in one sentence: I know, we Germans know, how much we owe to you, our American friends. We as a nation, and I personally, will never forget that.”
And so in this horrible week for America and its military family, let this be the last word. Our nation has been the guardian of peace and defender of freedom. Without America, the Germany of today doesn’t exist, nor that of Europe, and much of the rest of the world. To the American military, remember, it all starts with you and your grateful nation is behind you every step of the way.
Pray for the men and women of our armed forces, and all the fallen, including at Fort Hood, especially as we approach Veteran’s Day.
Returns for the week 11/2-11/6
S&P 500 +3.2% [1069]
Returns for the period 1/1/09-11/6/09
Have a great week. I appreciate your support.
