Rick Santelli is right

Rick Santelli, CNBC

This morning I watched CNBC's Rick Santelli talking from the Chicago Board Of Trade.  His so-called, "Santelli Rant" has been watched on YouTube over a million times and his sentiments today, once again, represent the views of many Americans who believe in living within one's means. It's how we were raised -- but we lack Mr. Santelli's microphone.

Rick Santelli was in fine form this morning while debating Steve Liesman.  The topic was banking reform and Mr. Santelli made a case for an elegantly simple cure -- raise the banks' capital requirements. 

Another CNBC commentator astutely chimed in that this is the same premium banks require when a homeowner has a marginal credit history -- the bank looks for more cash in the deal -- a bigger down payment to compensate for the risk of default.

Why can't we use the same mechanism to minimize chances of another banking meltdown?  Do we need new federal agencies, reams of new regulations, congressional hearings, class warfare speeches and on and on?  I realize that raising the amount of capital that banks must hold affects their profitability, but maybe it's a reasonable way to manage systemic risk.

S/he who frames the healthcare debate...wins.

When the topic of healthcare reform took center stage this summer, I felt that "healthcare reform" had suddenly become code for "let's change health insurance." 

I was certain that I was missing something like the "3.5M jobs saved or created" metric I wrote about last March.  I thought I was the only one disturbed by how stimulus programs would be "measured" and conveyed by this administration. 

Surgeons, Wikipedia

In my opinion, the healthcare reform yardstick that counts, is the one that actually lowers healthcare costs for the greatest number of patients.  But that isn't how we frame the national debate and measure success or failure.  Is an expanded insurance pool run by the government going to achieve this goal?  I don't know, but uniformly lowering the cost of that pill, that surgery, that MRI, whatever it is -- would benefit us all.  I do not see how the House bill will lower health care costs.  

President Obama, Ms. Pelosi, Mr. Reid, etc. have successfully shifted the narrative from lowering healthcare costs, to demonizing the health insurance industry and expanding government control.  All this delights their base.  If their bill passes, everyone will be 'covered' by virtue of a new mechanism.  That new mechanism is government-mandated, taxpayer funded, healthcare which is not reform at all -- unless one frames the debate that way.

When will we reward the savers?

This week, the author of a Barron's cover story posits that it's time for the Fed to raise interest rates.  The macro debate for and against doing so, I'll leave for economists.  The argument in favor of raising rates, however, has some advocates at Barron's.  The Barron's article titled, "C'mon Ben!" is accompanied by a reminder that keeping rates so low "hurts savers." 

The policy notion of incenting savers to save more, seems to fall on deaf ears.  The Fed keeps the cheap money flowing, but they also hamper returns from savings accounts, money markets, CDs, etc. to remain at paltry levels.  

When will we reward citizens who save and invest conservatively, instead of the masses who borrow mainly to consume?

freepik image

Of nuts and acorns

Contrast two recent cases that received national media focus: the arrest of Harvard professor Henry Louis Gates Jr. and video tape of ACORN employees giving advice to individuals posing as operators of an under-aged prostitution business.

In the first case, the President declares that law enforcement officers in the Gates case, "acted stupidly" then he hosts an awkward reconciliation meeting over beers on the White House lawn. 

In the second case, the President demurs when asked to share his opinion about the ACORN workers and Congressional action to stop federal funding for their organization. President Obama did say that actions he viewed on the ACORN videotape were "inappropriate" and deserved to be investigated, but then he added...

"This is not the biggest issue facing the country. It is not something I'm paying a lot of attention to."

Nor should he have paid much attention to a civil disturbance involving one man in Cambridge, Massachusetts...but he did.  Mr. Gates, for his part, could have had the last laugh and made buffoons of the Cambridge police, by maintaining his cool. Instead while being questioned, he ranted as though he had been robbed of his human dignity and got himself arrested.  

Back to the President.  At the time he uttered the "acted stupidly" remark, I thought he was reacting as a man who had felt the sting of racism conjured by painful episodes from his own past.

Let's say hypothetically that 25 years ago, citizen Barack Obama attracted the suspicions of some dim-witted alarmist for no other reason than Mr. Obama was black and in the wrong place at the wrong time. It happens and I bet it hurts like hell and leaves one justifiably angry.  

But candidate Obama ran his campaign as the "post-racial" choice.  People who've grown weary of bitter and endless racial debates are attracted to a person of color that espouses a color-blind agenda. However, acting with complete indifference to race is much easier said than done.  

The President would have been well-advised to say as little about the Gates matter as he said about ACORN.  To be fair, Mr. Obama wisely distanced himself from the race mongering recently exhibited by former President Jimmy Carter.  Sometimes, even racism -- or reverse racism -- is colorblind.

Tea party rocks Milwaukee's lake front



John Maddente photo

Ever attend a tea party?

They don't serve tea at this party, but visitors do receive a generous helping of speeches and opportunities to express themselves.

Yesterday on a sunny afternoon at Milwaukee's Veterans Park, thousands of attendees were treated to a litany of views on issues including our federal and state tax climate and sweeping health care and environmental proposals.

This was an audience that is passionate about their country and freedoms, but also well behaved and well informed. Nationally-acclaimed author Michelle Malkin roused the crowd with criticisms of left-leaning figures including Carol Browner, Director of the White House Office of Energy and Climate Change Policy whom Malkin referred to as a "Beltway Swamp Creature" (ouch), Attorney General Eric Holder "Chief Endangerment Officer" and "union thugs" (in particular she cited Andy Stern and the S.E.I.U.).

A number of speeches sounded out a call to action. "Joe the Plumber" reminded the crowd of a Ben Franklin maxim -- well done is better than well said.

Midwestern watchdog reporting still works

Here are two current examples of how the Fourth Estate still serves the public interest.

1.  Locally, in my home town of Milwaukee, readers were shocked and angry to learn how their tax dollars are squandered (again) by a $350 million state child care program that is routinely plundered by a number of providers, including one -- who as a result of Journal Sentinel investigations -- turned herself in to state authorities.  Fine reporting indeed, by Ms. Raquel Rutledge and others at the Journal Sentinel. Read more about the scams they uncovered at www.jsonline.com/cashinginonkids

2.  Ninety miles south of me, another series by the Chicago Tribune exposes corrupt admission practices at the University of Illinois, as well as other cheats and cronyism throughout the Land of Lincoln. Here's the spot to read, "State of Corruption".

Bloggers did not break these stories. I'm not sure how we'd learn about these issues if old fashioned, gumshoe reporting didn't occur.

Julie & Julia reviewed

Julie & Julia is a new film starring Meryl Streep and Amy Adams. I watched the film yesterday alongside sixty or so other theater goers.

For anyone who loves Julia Child (as I do) the film is worth watching. Meryl Streep's depiction of the late great gourmand, is stunningly good. It's easy to replicate the oft parodied high-pitch voice, but Ms. Streep's cadence and accent on choice syllables is so faithful to the real deal, it's almost unsettling. 

The screen writer of this movie is Nora Ephron whose style I didn't care for before the film.  Before seeing the film, I listened to two separate Nora Ephron interviews. Her tone and lack of enthusiasm during both interviews left me with the distinct impression she felt she was doing us a favor by sitting for them. At least, that's how she sounded. However, while viewing the film yesterday I realized something else -- she takes cheap shots.

Example: In this movie, Amy Adams plays a character that works in a call center to help 911 survivors and takes a "sick" day to cook a Julia Child dish.  She then blogs about the experience to the dismay of her boss who calls her into his office to beseech her for writing the post. He ends his rant by saying, "a Republican would have fired you."

In my case, the theater audience was silent after hearing that little gem.  (Perhaps they cheered on the coasts). Could Ms. Ephron have had any purpose other than to slam Republicans or Conservatives? Doing so is hardly unusual for Hollywood and inconsistent with the memory of Julia Child who was publicly apolitical. 

Finally, there is the weak ending to the film that leaves one wondering if Ms. Ephron was tired and decided to finish the script too quickly, or whether something else crippled her imagination before limping over the writer's finish line.

All this notwithstanding, the film succeeds on the strength of Meryl Streep's affectionate performance and the unique legacy of the woman she portrayed. On a five star scale, this blogger gives Julie & Julia three and 1/2 stars and a pinch of salt for the screen writer.

The Atlantic considers The Economist

public domain

Check out this article by Michael Hirschorn in The Atlantic (July/August 2009) in which Mr. Hirschorn examines how a printed magazine like The Economist can thrive, while other printed weeklies it competes with -- notably Newsweek and Time -- are languishing. 

Print publishing success in the digital age may lay in what Mr. Hirschorn describes as "razor-sharp clarity and definition" and owning a particular niche instead of trying to replicate one owned elsewhere. In the case of The Economist, Mr. Hirschorn asserts that the magazine "...canvasses the globe with an assurance that no one else can match" and "...prides itself on cleverly distilling the world into a reasonably compact survey.'' 

Mr. Hirschorn, a contributing editor at The Atlantic, even made a frank admission that his own magazine, "...has never delivered impressive profit margins."  Impressively profitable or not, his piece is worthwhile for anyone interested in the devolution of paper-based, weekly news products and the remaning ones that are still prospering.

Rather than add a new Palin post...

I'll simply provide a link to a CBS poll, taken this month, that reports an astonishing share -- 51% -- of the GOP views Ms. Palin as unqualified to be an effective President.  I guess I posted too early.  Here's the link, if you care to review more evidence to support my suspicions about Ms. Palin as a VP choice.

Nearly forty percent of GOP doubts Palin's abilities

Glad I'm not alone. A recently-released ABC News/Washington Post poll with a sampling error of plus or minus 3% shows that not only is Ms. Palin's support waning across the political spectrum, it is also slipping among Republicans as a whole.

Like the 83% of Republicans surveyed, I believe that Ms. Palin shares my values. However, almost four out of ten Republicans (and 57% of Americans overall) also say we doubt her ability to "understand complex issues." Which is another way to say what I first wrote last November - that, as much as we like what she stands for, she lacks credentials for national office.

Sarah Palin, Wikipedia

The Washington Post quoted one gentleman, thus: "Rick Buila, 38, of Sharonville, Ohio, who works in finance and voted for the McCain-Palin ticket in November, said his opinion of the governor has changed. `I don't think that she is cut out to be on the national stage,' he said. `I look at her education and her background and the way she carries herself and her [resignation] speech, and when you have someone who's out there saying 'You betcha' about 50 times, I don't think that's the person we want to have negotiating with other countries.'

Sadly, a few blowhards will seize on a remark like Mr. Buila's "You betcha" comment and dismiss any GOP criticism of Ms. Palin as elitist, or worse. That's unfortunate and wrong. We don't begrudge her for her style, we simply believe that she is not ready - and frankly might never be ready - for The White House.

Peggy Noonan in today's WSJ & the Palin factor

Republicans might thank Peggy Noonan for explaining what some of us lack the courage to say -- Sarah Palin -- was unhelpful for the party.

I can't match Ms. Noonan's eloquence, but I can identify with what she says in this piece entitled, "A Farewell to Harms".

Peggy Noonan, Wikipedia

If you are one of my five six readers, you may recall when I just couldn't take Ms. Palin's performance any longer and consoled myself in this November 8, 2008 post. Yesterday morning, I called in to a local radio program to express similar Palin-related thoughts (Joy Cardin takes my call @ approximately 9 minutes and 42 seconds into the 8 AM program on this tape if you care to listen).

I deplore the torrent of abuse leveled at Ms. Palin and her family by the Left, but we can't trot out unqualified national candidates and expect cheap shot artists to remain mute. We need more knowledgeable, more bullet-proof candidates that can do more than just say the`right' things on cue. We need depth and agility.

I admire Ms. Palin, but she was hopelessly in over her head last year. The aforementioned Noonan piece is not a tired rant to criticize Ms. Palin's work. It's more of a description as to what is needed to rebuild the GOP. So let's end on a hopeful note - shall we? Yes we can!

Think of the Gopher State with it's schizophrenic voting populous that can elect Comic Al Franken but also install what may be our best chance for a 2012 run at the White House - Tim Pawlenty. There is hope.

Milwaukee County furloughs and remembering Reagan

The Milwaukee Journal Sentinel reports today that a judge has allowed the furloughs (days off without pay) of some public union workers to commence in accordance with Milwaukee County Executive Scott Walker's order -- starting Monday.

It's unfortunate, that instead of supporting his fiscal responsibility, the County Board continues to jawbone the County Executive and the unions, of course, continue to file lawsuits. All of this for five hours off a week.

I never understood why organized labor behaves as though pay (and benefits most of us dream of) ought to be guaranteed. I cannot fathom any responsible authority agreeing on behalf of county taxpayers to anything more than the rest of us live with AKA an "at will" employment arrangement. The concept is quite simple. Either party (employer or employee) can sever their relationship with the other, for any reason, at any time.

This morning I recalled former President Ronald Reagan's decision to fire striking air traffic controllers in 1981. The union organization, known as PATCO, sought to express its grievances with a strike and jeopardize the safety of American travelers. After the President warned PATCO members that if they did not show up for work they would be fired, they tested him and he kept his word.

It was something of a milestone. Organized labor has continued its decline since. Baseless threats, lawsuits and strikes are not part of an effective strategy.

Now flash forward to modern day Milwaukee County and consider its fiscal challenges. We see all the labor vitriol we had on a national level back in 1981. . . over five hours a week.

Somehow I think that if Mr. Walker's furlough order was twice as stringent, the sun would still come up the next day.  I commend Governor Doyle's plan for limited furloughs and wish only that he and the Democrat-controlled legislature, went further to reduce state spending and lower taxes. 

Taxes, polls and pols

Yesterday morning at the beautiful Discovery World facility at Pier Wisconsin, Milwaukee Mayor Tom Barrett participated in a panel discussion on Wisconsin's transportation needs and how to fund them. The event was also attended by Milwaukee County Executive Scott Walker, who had some decidedly different ideas than the Mayor.

Tom Barrett, Wikipedia

At one point, Mr. Barrett cited two separate polls to conclude: few citizens want services cut (one poll), yet few want to pay for them in the form of higher taxes (a second poll). 

Of course, but if you require people to choose between them (think one poll question), perhaps many would choose to hang on to more of their own money, even if the service pool shrinks.  Leadership often requires one to make unpopular choices. 

My dowdy prediction

A week has elapsed since I wrote about Maureen Dowd. I thought by now she would have acknowledged an intentional 43-word copy job, followed by a sorry-I-forgot-to-attribute apology.  I think that's all it would have taken to make this saga go away.

Ms. Dowd points out that she had indeed given proper credit to two other writers and so by her reckoning, she could not have planned to copy from a third. Two out of three isn't bad.

I'd have preferred to hear her say she was working too quickly, or she was distracted when a bird smacked into her office window, or whatever, but that after she used the work of another writer, she simply forgot to credit the author, but had meant to do so. I would have bought that, but it isn't what we are asked to believe.

Maureen Dowd, Wikipedia

The essence of her account is this: After communicating with a friend about another person's work, she plopped some sentences in her column and then discovered she was using the same 43 words after bloggers told her.  Here's what she wrote to explain her actions (repeated from Michael Calderone's space at Politico.com): "i was talking to a friend of mine Friday about what I was writing who suggested I make this point, expressing it in a cogent -- and I assumed spontaneous -- way and I wanted to weave the idea into my column. but, clearly, my friend must have read josh marshall without mentioning that to me. we're fixing it on the web, to give josh credit, and will include a note, as well as a formal correction tomorrow."

My prediction that within a week Ms. Dowd would be finished if still bereft of a plausible explanation, was completely wrong. I misjudged how serious the matter would be taken by the New York Times.  I see reader and writer outrage and some scorn, but little objection from the Times itself. 

I think Ms. Dowd made a mistake, got rattled during the firestorm and then made more mistakes by blaming her quotable friend.  My reasoning is that she didn't need to take risks deliberately, so it probably wasn't theft. She's already a famous, award-winning columnist in little danger of losing her space, so she doesn't need to lift other people's work including the unremarkable 43 words at issue.

I rarely agree with her (save for the attention she aptly paid to Bill Clinton's peccadilloes in the 90s).  So I admit that my antennae went up easily when I learned about her ordeal.  However, I'd like to think that if a columnist I normally agree with like Noonan, Krauthammer, or Goldberg, had inserted 43 words written by another writer and then proffered such a lame excuse, that I'd have been equally critical.  When and if something like that happens, we'll see if I rise to the task.

Is Maureen Dowd in trouble?

The answer is yes.

Forty-three words without attribution, a poor excuse and by now, I suspect, a truth audit of her work is well underway.

Had Ann Coulter done this, the New York Times (and perhaps Ms. Dowd herself) would have hung her from the highest limb. My prediction is that Ms. Dowd will either come out and declare she knew what she was doing after all and apologize profusely within the next week, or she's finished as a nationally-syndicated columnist.

French lessons

We are fortunate to have a young student from France living with us these days. It is her first visit to the US and we are learning as much (or more) from her, as she is learning from us.

Here's an example. After attending high school classes with my younger daughter for a week or so, we prompted our guest to share her honest impressions of class here in America. She told us that students here strike her as more disrespectful to their teachers than what she is accustomed to in her native France.

Where are our children learning how to behave this way?  Oh, that's right -- it's us.

Saved or created? That is the question.

It hit me while driving someplace and listening to the radio, maybe a month ago.  The President was talking about the outcome of his stimulus package while using the now oft-repeated phrase about three and half million jobs being, "saved or created."

(Freepik image)

I'm hearing it again as I watch one of President Obama's acolytes on "Meet The Press" and so I'll ask you dear reader...

How does one measure a job saved?  How can one record a job loss that didn't occur, but might have occurred under the circumstances?

Data on new jobs created are obviously available and broadly examined -- but jobs saved?  It seems like a clever mechanism to avoid any rigorous assessment of the relative success or failure of the stimulus plan.

What's actually been created, is a new rhetorical device called "jobs saved".  That phrase is designed to portray an anemic employment picture as something more robust, even if the jobs created metric can't be measured. 

_________________________________________________________

Submitted to US Senator Herb Kohl moments ago...

"Dear Senator Kohl,

I am writing as a private citizen to voice my strong opposition to the bill misleadingly labeled as the `Employee Free Choice Act' also known as Card Check.

The coercive leadership of organized labor does not need additional tools to intimidate ordinary men and women who prefer to remain outside the union. I would urge you to speak out against this legislation and expose it for what it is -- a catalyst for union demagoguery.

I am not against organized labor per se, but I am against bullies and thugs gaining ground with sanction from Congress.

Respectfully,


John J. Maddente"

The individual and our economic crisis

If you had never met Milwaukee County Executive Scott Walker, you'd be hard pressed to spot him in a crowded room.  Mr. Walker is an average-looking man, with plain features and an unassuming demeanor. Even his name is common. He looks like millions of other guys. I made his acquaintance last year after he introduced himself to me moments before a debate with his election opponent, Ms. Lena Taylor.


Scott Walker
Wikipedia image

Yes, a common guy he is, but don't be fooled -- Mr. Walker packs a wallop and his piece in this morning's Wall Street Journal, "Why I'm Not Lining Up for Stimulus Handouts" defines his fiscal moorings and shows why he has drawn acclaim among conservatives and scorn from progressives.

Mr. Walker mentioned what other politicians know but often fail to highlight -- which is that our current fiscal calamities, were abetted by individuals -- not just banks, not just regulators, not just mortgage brokers, not just government. Those were all culpable parties to be sure, but what Walker reminds us today, is that our current turmoil began,

"...when millions of people were allowed (or encouraged) to spend borrowed money on homes they couldn't afford and were later forced into foreclosure." 

Amen. I've been dismayed by the lack of discussion about individual responsibility and reckless borrowing.  In due course, we'll see more acrimony coming from the public, or at least the part of it that still believes in living within one's means.

There are two arguments currently offered to defend bailouts for homeowners who bought too much house, or who should have remained renters until their income and assets warranted otherwise, or who foolishly sucked all the equity out of their homes to buy stuff they couldn't afford. Here are those arguments:

Argument #1) "This is no time to teach people a lesson."

Who said anything about teaching? This isn't about vengeance either. Those who advocate for mortgage bailouts are appropriating money from responsible Americans to pay for the mistakes of others. Bailouts simply perpetuate that pattern.

The only way to help a heroin addict is to take away his opiate (in this case easy money), then encourage him or her to live healthfully. I see no reason why the responsible many should pay the freight of the irresponsible few, simply because the irresponsible few no longer meet their obligations. We're discussing a self-induced foreclosure on a house, not a death sentence visited upon the falsely accused.

Many foreclosure "victims" are personally responsible for their circumstances. There was too much predatory borrowing going on that is now being characterized, as predatory lending.  Yes, I know there were exceptions, people who were truly duped, lost their jobs, became seriously ill, or were improperly foreclosed upon -- but do you think that those cases constitute the majority of borrowers who suffered a foreclosure?  

Argument #2) "If we don't have mortgage bailouts to stem foreclosures, housing prices will continue to fall precipitously, including yours, so you should support this plan."

Markets work if we let them work. If housing prices continue to fall, they'll only be receding to a current level of value. The continuing collapse of our financial system and our way of life, which appears to be careening toward Euro-Socialism, is as disturbing as the trajectory of home values.

However, if we allow the eggs to break, the values of our homes could appreciate again one day. Things get better after the hangover. The reality that too few wish to acknowledge is this: we can't have a painless hangover.

Although the thrust of Mr. Walker's piece today is not about individual responsibility, it's about government's financial stewardship -- he gets it. We cannot, individually, or as a society, continue to kick the debt can down the road. It's immoral and stupid.

Our current state Governor, unfortunately, wants to leverage our future, reward his supporters like public teachers' unions and expand government programs we don't need and can ill-afford.  It's widely speculated that Mr. Walker will run for Governor in the next election. If he does run, I intend to support him. I hope like-minded voters in this state will do the same, unless a stronger candidate emerges.

Right now, I don't see a stronger one.

What sequence of events caused the mess?

Hedge fund executive Oscar Schafer in a Barron's interview (January 12, 2009, "Hang on Tight!") described our current economic condition thus: "The world is experiencing a giant margin call."

Yes, a giant margin call enabled by easy credit extended to millions of people who couldn't afford as much home as they purchased, or as much cashed out equity to finance a lifestyle they couldn't afford, before defaulting on their mortgages. 

These mortgages would be bundled into what equated to securitized time bombs gobbled up by over-leveraged financial institutions. 

How did it all happen?


Policy makers in Washington wanted to guarantee home ownership for anyone with a pulse. Then the Fed left open the spigot of cheap money by keeping rates too low for too long and America became intoxicated by illusory home price appreciation. Money center moguls and central bankers made enormous bets upon this whole sorry misuse of credit, until the system collapsed.  

Millions of people, who either ought to have remained renters until their income and assets could justify their mortgage, or who should have purchased more modest homes and received loans at fixed rates, were enabled by government-coddled institutions like Fannie and Freddie and populist legislation to "invest in our communities". 

The risks they took (policy makers, investment banks...and millions of  Americans), have poisoned the well that the rest of us must drink from -- perhaps for decades. Now we hear that the other shoe to drop will come from commercial credit busts, or the next highest risk level of mortgages above subprime.  

Grandma warned us when we were children.  If you can't afford it -- don't buy it. If you can't afford to lose it -- don't risk it. In short, live within your means.  Greed is the same thing that destroyed Rome. How will we get treatment and beat our addiction to debt before we all go down in flames?

A president's farewell

As Kissinger reminded Nixon, history will treat him better than his contemporaries. His policies precluded another attack since 9/11. To conclude otherwise is to posit that the other side simply stopped trying to harm us after 9/11.  The President deserves credit and at least grudging acknowledgement from his political opponents for his stalwart efforts to fight terrorism and protect Americans.  

I'm reminded of another parallel with Nixon. Richard Nixon asked readers this question in one of his later books: if America does not lead in this world -- who will?

I repeated the question in one of my columns and a rebuttal came from a letter writer who declared that the correct answer to this question is -- the "leaders" of other countries.  Unfortunately, the world has always been replete with national 'leaders' like Stalin, Hitler and Hussein that refuse to back down.  

This President did not have the luxury of presiding over a relatively peaceful world and the safety of American citizens has been his overriding concern.  That fact will endure as a positive part of his legacy, even if the Iraq invasion does not. 

George W. Bush

Finally, his administration failed to stem the profligate federal spending we have seen during the last eight years -- punctuated with a new drug program we can ill afford; but that's a trend the new administration appears destined to continue.