Monday, February 28, 2011

Today’s Photo 2-28-11



It’s the last day of February and I’m standing out by the lake at dawn -- the coldest part of the day -- in a t-shirt. Just sayin’. There’s not a leaf on a tree yet, and it’s warm enough for me to stand outside a couple of hours in a t-shirt. That can only mean one thing. Thunderstorms.




(Image from Intellicast)



On days like this, I’m glad I’m retired. It was a nice sunrise, by the way.




© Don Brown 2011 (Click on the picture to enlarge)

Don Brown
February 28, 2011

Sunday, February 27, 2011

Here We Go



Wish me luck. This week, I (along with several others) will be blogging in James Fallows’ spot over at the Atlantic. No promises as to what I’ll put here during the week. But air traffic control stuff will definitely go over there. I have no idea about scheduling. It will be there when it gets there. Check in often.

Don Brown
February 27, 2011

Saturday, February 26, 2011

Put Them In Jail



And I want my money back too. I am, of course, talking about the banksters. I have now finished reading The Big Short, in addition to All the Devils Are Here. I am angry. And I believe, once they understand what happened, the rest of America will be too.

One thing you need to understand, right up front, is that -- no matter what you hear -- poor people didn’t cause this. It’s a ludicrous thought but one that Wall Street would love to sell you (just like they did sub-prime mortgages.) Poor people don’t understand money. That’s why they’re poor. Rich people do understand money. That’s why they’re rich. Rich people get to be rich by taking money from poor people. And that is exactly what happened in this case. Wall Street just took the rest of us along for the ride too.

Sub-prime mortgages were designed for people that could not afford to buy a house under the rules we used at the time. Let me belabor my point -- they were designed for (relatively) poor people by rich people. Once Wall Street figured out how to “securitize” these mortgages, they couldn’t get enough of them. That’s when the entire industry started bending and breaking the rules. The mortgages were no longer the focus. The focus became how much money you could make on turning the mortgages into bonds. Wall Street needed more mortgages to turn into bonds and they didn’t care where they came from or how risky they were.

Nobody cared about the risk. That’s the point. They were all making too much money to care.

It takes a book to explain how the industry got from point A (sub-prime mortgages) to point Z (synthetic CDOs.) If you want to understand the process (and I hope you do) either one of these books would be a great place to start. Just don’t make the mistake of thinking you will understand the products Wall Street was selling. That was the point of the product (CDOs), they were so complex that nobody really understood them. But as long as the rating agencies would rate them “triple A” (and Wall Street was paying the agencies to rate them triple A), your pension/401k fund manager would buy them. After all, the rating agencies had to understand them to rate them “triple A”, right? Well, as it turns out, no. But the rating agencies did understand that Wall Street was making them rich as long as they kept rating the CDOs “triple A”.

I’ve already provided you with plenty of quotes from All the Devils Are Here. Here are a few quotes from The Big Short.

”How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.”

””They were making loans to lower-income people at a teaser rate when they knew they couldn’t afford to pay the go-to rate, said Eisman. “They were doing it so that when the borrowers get to the end of the teaser rate period, they’d have to refinance, so the lenders can make more money off them.””

”One of Bear Stearns CDO guys, after Charlie asked him what was likely to happen to these CDOs in seven years, said, “Seven years? I don’t care about seven years. I just need it to last for another two.””

”The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their corporations into bankruptcy or were saved from bankruptcy by the United States government. They all got rich too.”

Not only did they gamble your money away, they were paid off with your tax money. Think on that for just a second. You might not think they got any of your money but they did. If nothing else, they cost the pension funds of the world billions (if not trillions) of dollars. That shoe hasn’t really dropped yet. The money you pay your State (in taxes) that gets put into a pension fund for State workers was invested with these crooks. Ditto for German auto workers. Or Japanese farmers. They robbed the world. And then, when the whole scheme collapsed, the CEOs collected their salaries. But their companies were bankrupt. There was no money left. The only money they could have been paid with was with your tax money.

Put all this is the context of today’s events. They took your pension money. They destroyed the value of your house (if you still own one.) They may have cost you your job (if you got laid off.) And then they took your tax money too. It has cost us trillions to keep the financial system afloat. And now -- now that tax revenues have fallen with the economy they ruined -- they’re trying to tell you that a teacher’s pension plan is the reason your State is broke. The reason the pension plan is a problem is that Wall Street stole the money out of it.

I say put them all in jail -- where they belong. I want my money back too. And I know just how to get it. (I say make it 91% again, Professor.)

What do you think the chances are that any of them will go to jail? (Be sure to note that the article is by Joe Nocerna -- one of the co-authors of All the Devils Are Here.)

You need to read one or both of these books. Then you need to start demanding justice from your government.

Don Brown
February 26, 2011

Friday, February 25, 2011

New Zealand’s Earthquake



Tuesday’s earthquake in New Zealand claimed the life of one air traffic controller while she was out shopping. Here’s the news story and below, you’ll find a forwarded letter on how you can help her family if you’d like.

My sincere condolences to Ms. Murphy’s family.

For anyone that would like to contribute to the general relief of New Zealand, the here’s the link for the New Zealand Red Cross.

Many thanks to long-time reader and friend Paul Willett for steering me towards all the information.

------------

(Begin forwarded letter)

Jill Murphy Family Donation Fund

Following the tragic news of the death of Christchurch Tower Controller
Jillian Murphy in the Christchurch earthquake, NZALPA has undertaken to
set up a bank account for donations to the children and other family
members left behind.

The account details are as follows: NZALPA - Jill Murphy Donation Fund,
Bank of New Zealand, 02-0264-0365089-005

Many messages of sympathy and support have already been received from
around New Zealand and across the globe. Several close friends and
relatives have now begun the long journey back to New Zealand to be with
their loved ones.

NZALPA is providing close support to Richard, Sam, Taylor & Bond, who
were visited this morning by members of the ATC Council at their home in
Christchurch.

Anyone wishing to pass on messages to the family can do so using the
following email address - atc.adminhead@nzalpa.org.nz.

Please consider a donation to the fund to assist the family through this
difficult and traumatic period.

Kind Regards,
Jim Dunn
ATC Director
NZALPA

--------------------------

Don Brown
February 25, 2011

And You Thought Privatization Was Dead



Run on over to The New York Times and read Paul Krugman’s latest while I finish putting my outrage over Wall Street into words. (Remember? The Wall Street that -- with the Republican’s help -- crashed the world economy and caused the shortfall in State’s budgets because so many people are out of work and aren’t paying taxes?)

Shock Doctrine, U.S.A.

”What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.”

”What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.””

I’ll be back shortly. I sure am busy for a retired guy.

Don Brown
February 25, 2011

Thursday, February 24, 2011

Tuesday, February 22, 2011

The FAA Must Breed Whistleblowers



Some may remember the issues. Some may not.

Some may remember Scott J. Bloch from the Office of Special Counsel. Some may not.

But you’ll all be interested to see just how many signatures on this open letter to the Attorney General of the United States belong to people that used to work for the “Department of Transportation/Federal Aviation Administration”. Unbelievable.

An Open Letter from the Community of Whistleblowers to Attorney General Eric Holder

”Dear Attorney General Holder:

We, the undersigned, wish to bring to your attention an important issue: the effective and ethical prosecution by the Department of Justice of Scott J. Bloch, a man who has gravely damaged the federal civil service.”


...

”In addition, given the significant harm the defendant has caused to countless whistleblowers, the U.S. government, and the American people, the public interest requires that a credible, impartial, non-partisan prosecutor be tasked to lead this prosecution.”
...

”Attorney General Holder, we have long waited for Mr. Bloch to be held accountable in a court of law.  For too many of us, the erosion of the rule of law and ethical conduct in government came with a heavy price.  With our whistleblowing activities, we sought, and continue to seek, a government of laws, not of men.  Please help us restore this noble and long-standing principle by appointing a special prosecutor to lead United States v. Scott J. Bloch.”

Take a look. Not only is the FAA over-represented, the entire aviation industry has a few too many names on it for my comfort. And in case Coleen Rowley’s name rings a bell, clicking on the link will save you the trouble of looking it up. It made her Time’s Person of the Year in 2002.

Don Brown
February 22, 2011

Monday, February 21, 2011

The Koch Brothers Again



I don’t really need to say anything much about this piece. Just ITYS. I do hope you’ll notice -- and ponder -- that it is from Forbes. That’s as in Steve Forbes. Rich guy. Conservative. The Capitalist’s Tool. Will wonders never cease?

Koch Brothers Behind Wisconsin Effort To Kill Public Unions

”As the nation focuses on the efforts of Governor Scott Walker to take away collective bargaining rights from public employees in Wisconsin, new information is coming to light that reveals what is truly going on here.
Mother Jones is reporting that much of the funding behind the Walker for Governor campaign came from none other than uber-conservatives, the infamous Koch Brothers.”


Be sure to follow all the links in that story. You might even want to read the author’s previous post.

The Final Battle In The War Against Unions Is Underway

”Without the collective bargaining powers that unions bring as the only real offset to corporate greed and without the organizing strength unions bring to political action, there will be no counter-balance to corporate power. I promise that you will not like the result if our unions should disappear – even if you are not a union member.”

I’ll second that opinion.

Don Brown
February 21, 2011

Krugman Weighs In



I don’t know about you but I always fell better when somebody smarter than me weighs in on the same side I’m on.

Wisconsin Power Play

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.

And now Mr. Walker and his backers are trying to get rid of public-sector unions, too.


I hope my controller friends realize how the PATCO strike in 1981 looms larger and larger in history as time passes. To paraphrase Vice President Biden, it really was a big f!@$%&g deal.

I’ll say this again but in a slightly different way in the hope that I can get your attention and inspire you to think. If the air traffic control profession was important enough to hold such a pivotal place in history -- in the demise of labor unions -- air traffic controllers have the potential to be the pivot point for the future. Your actions could mark the turning point, where labor took on the power of the oligarchs and brought some balance of power to this country.

In other words, NATCA has the capability to lead labor into the future. To lead us into a time when working-American’s wages were rising instead of declining. Into a time where American’s retirement savings were held in safe investments instead of in a glorified casino. Into a time where American’s could raise a family on a single income instead of having to put mom to work.

NATCA can’t do it by itself. But it can lead. It has that kind of talent. It has that kind of intelligence within its ranks. It has that kind of power. All it needs is the will to use it wisely.

Don Brown
February 21, 2011

Saturday, February 19, 2011

To Be an American



In a fit of stupidity, I’ve gone straight from reading All the Devils Are Here to reading The Big Short. In other words, I’m still reading about a bunch of greedy lowlifes that ruined the world’s economy. Some of them are powerful enough that they get to shake the President’s hand. Hell, some of them have advised the President of the United States on economic policy. They make you embarrassed to be an American.

Instead of listening to me whine, I want you to set aside 25 minutes, jump over to Just an Earth-bound Misfit, I and watch the video at the link.

Medevac in the Sandbox

Sergeant Tyrone will make you proud to be an American. In a just world, he and his comrades would come back home to a life of luxury and we’d ship the banksters over there to bleed in the dust. But this isn’t a just world. And increasingly, America isn’t a just nation. Until we learn to value men like Sergeant Tyrone a whole lot more -- and banksters a whole lot less -- we won’t be a just nation. Nor a great one.

Don Brown
February 19, 2011

Friday, February 18, 2011

Be a Democrat



My conservative controller friends need to pay attention to Wisconsin.

Obama joins Wisconsin's budget battle, opposing Republican anti-union bill


”Obama accused Scott Walker, the state's new Republican governor, of unleashing an "assault" on unions in pushing emergency legislation that would nullify collective-bargaining agreements that affect most public employees, including teachers.”

When the Republicans come after Federal workers (and they will) remember who is on your side. It’s the Democrats. Specifically, it’s this President. The Republicans won’t be your friends. They never have been and they never will be. Even when you’re dumb enough to endorse them.

Listen to what Wisconsin’s Republican Governor says at the end of the article and think about the implications.

”"Many of the companies I went by, like so many others across the state, don't have pensions, and the 401(k)s they have over the last year or two, they've had to suspend the employer contribution,"...”

Republicans want you to be on par with private industry’s workers (until private workers get ahead. Then they want private workers on par with you.) The very private industries that have shipped American’s jobs overseas, paid their CEOs record amounts while paying their workers declining wages and replaced worker’s pensions with 401ks. That would be the very same 401ks that they allowed the banksters to plunder. And now they don’t even want to contribute to those.

”...and the 401(k)s they have over the last year or two, they've had to suspend the employer contribution...

That is what is in store for you, dear conservative controller. What’s it going to take for you to start voting Democratic?

The facts are out there. All you have to do is ask yourself some intelligent questions and search for the answers. Curious about what a Wisconsin CEO earns? I was. It took less than a minute to find out.

”Average total compensation for a Wisconsin CEO last year: $2.8 million, although the men who led the state's 10 largest public companies fared much better. Their average pay hike was zero, but their average pay package was worth $7.8 million.”

And that was a bad year for CEOs.

”The biggest increase for a CEO who is still on the job went to Wausau Paper Corp.'s Thomas J. Howatt, whose pay package jumped to $4.75 million, an increase of more than 80%. More than $1.3 million of the increase came through stock awards and cash incentives.

Wausau Paper posted its best performance in more than a decade, largely because of a massive restructuring that resulted in the closing of two out-of-state plants and the lowering of employment rolls by about 1,000. The company, which now employs about 2,400 people, also froze wages for salaried employees last year.”


Wake up. Smell the coffee.

Giving the boss a raise while cutting jobs, though, makes some folks cringe, especially in Wisconsin, where nearly 130,000 jobs were lost last year and the average wage dipped slightly, falling to $37,752.

Lay off 130,000 Americans, cut/freeze their wages, pay yourself a multi-million dollar salary -- and then almost double it . That’s 130,000 less people to pay taxes and they now collect unemployment. Lower wage earners pay lower taxes. Stock options are taxed at a lower rate.

But the budget problem -- according to Republicans-- is that public employees make too much money. The average CEO making $7.8 million doesn’t make too much...YOU DO.

Don Brown
February 18, 2011

Thursday, February 17, 2011

Today’s Photo 2-17-11



I’ve been after this shot for years but I could never find the time when the weather and the position of the Sun was right. Have I mentioned how great retirement is?


© Don Brown 2011 (Click on the picture to enlarge)

Don Brown
February 17, 2011

Wednesday, February 16, 2011

Rub-a-dub-dub



Government doesn’t create any jobs.” Everybody knows that.


The Butcher



The Baker



The Candlestick Maker



And how do you think they got there? No, they didn’t jump out of a rotten potato. Government attracted them to Washington. (You probably don’t want to plug “lobbyists” into Google Maps.)

Don Brown
February 16, 2011

I’d Take FDR



Don’t get me wrong. I voted for President Obama and -- barring an unforeseen upheaval -- I’ll vote for him again. But if the truth be known, I’d rather be able to vote for FDR. Watch this video comparison from Rachel Maddow and I think you’ll see what I mean.

Visit msnbc.com for breaking news, world news, and news about the economy



The only differences between the Great Recession and the Great Depression are the safeguards put in place by FDR. Imagine this recession without Social Security and unemployment insurance. Indeed, if we hadn’t repealed Glass-Steagall, we probably wouldn’t even be in the Great Recession at all.

Don Brown
February 16, 2011

Is Your House On Fire?



Ed Shultz. I’m not a fan. He might change my mind.



Visit msnbc.com for breaking news, world news, and news about the economy



Don Brown
February 16, 2011

Tuesday, February 15, 2011

The Deep End



In case you don’t pay much attention to my blog roll, The Earth-bound Misfit doesn’t really fit in with the rest of my choices. (Sorry, no wordplay on “misfit” intended.) EBMisfit isn’t a controller and isn’t a “big name” like Krugman, Fallows or Reich. She’s just a smart person I was fortunate enough to run across on the internet.

She’s further to the left on the political spectrum than I am (about most things anyway) but I love the diversity of topics she covers. And I get tickled by the irreverent way in which she does it. No subject is safe. No punches are pulled. I like that.

All this is just a lead-in to a story I saw on her site about the U.S. Chamber of Commerce. As you might suspect, I don’t have anything nice to say about them but I always thought they were a respectable organization. (Not that I’ve studied them or anything.) I mean, the President of the United States just spoke at their place the other day, for crying out loud. But it appears as if ThinkProgress has the goods on them.

”According to e-mails obtained by ThinkProgress, the Chamber hired the lobbying firm Hunton and Williams. Hunton And Williams’ attorney Richard Wyatt, who once represented Food Lion in its infamous lawsuit against ABC News, was hired by the Chamber in October of last year. To assist the Chamber, Wyatt and his associates, John Woods and Bob Quackenboss, solicited a set of private security firms — HBGary Federal, Palantir, and Berico Technologies (collectively called Team Themis) — to develop tactics for damaging progressive groups and labor unions, in particular ThinkProgress, the labor coalition called Change to Win, the SEIU, US Chamber Watch, and StopTheChamber.com.”

The story gets more tangled from there. Lawyers, hackers, WikiLeaks and Bank of America all get mentioned. It’s all too deep for me. I have to fall back on Jimmy Buffet and be thankful I’m not a lawyer, a thief or a banker.

I did go to the Chamber’s web site to read their side of the story. I found the comment section most entertaining.

Like I said, it’s all too deep for me. And all too nasty. But at the end of the day, I remember that U.S. corporations are sitting on over a trillion in cash and there are at least 14 million unemployed Americans. (I believe that reality is much harsher than the numbers.)

I don’t expect corporations to be charities. Their purpose is to make money. But their larger purpose is to serve mankind. Right at this moment, they don’t seem to be doing a very good job of that. From my perspective, they haven’t been doing a very good job for 30 years.

Yes, that period does correspond to the Pinkerton-in-Chief busting a union.

Don Brown
February 15, 2011

Sunday, February 13, 2011

Today’s Photo 2-13-10



Dawn overlooking Escambia Bay at Pensacola, Florida. Who knew that Florida had bluffs?




© Don Brown 2011 (Click on the picture to enlarge)


By the way, it was 33º (that’s 1 degree above freezing for the Celsius folks) when I took the picture (at 6:14AM on a Sunday morning.) I’m guessing those are just two reasons why I was the only one out there watching the sun come up. Pity. It really was spectacular.

Don Brown
February 13, 2011

Thursday, February 10, 2011

Go Bernie, GO!



Sometimes, someone has to state the simplest of ideas for us to finally catch on.

”The role of banking should be to help facilitate real production -- real jobs -- in the real economy.”

Senator Bernie Sanders (I-VT)

Visit msnbc.com for breaking news, world news, and news about the economy



Keep in mind, Senator Sanders is not a Democrat. He’s not a Republican. He’s an Independent Senator from Vermont. He’s a socialist. Seriously. That’s what he calls himself. A socialist has to explain to America that banks are here to support capitalism -- not the other way around. If that’s socialism, we need more socialists.

Don Brown
February 10, 2011

Today’s Photo 2-10-11



Just in case the photo is not as obvious as it seems to me...

It snowed on my pansies last night.




© Don Brown 2011 (Click on the picture to enlarge)

Don Brown
February 10, 2011

Tuesday, February 08, 2011

Another Miss



I guess this story is going to get too big to ignore. It’s never a good sign when the headline screams;

Jumbo Jets Nearly Collide Outside New York City

”A packed American Airlines jumbo jet and two military C-17 cargo planes avoided catastrophe, after they were mistakenly sent to the same altitude by controllers at New York's Air Traffic Control Center. The planes -- both closing in on 22,000 feet -- came less than a mile from each other horizontally, and 200 feet vertically. A collision alarm in the cockpit of the American Airlines Boeing 777 sounded, warning pilots to descend. They did, averting a possible collision.”

Oy vey. Let’s not jump to any conclusions just yet folks. Oh..I see...we’re already too late.

”"The impact of a breakdown in communication can be very serious," said former air traffic control manager and safety consultant Dick Marakovits. "In this circumstance, technology stepped in within the aircraft and saved the day."”

There’s a reason people shouldn’t speculate about an incident in aviation. There’s a reason safety people in aviation don’t. I won’t speculate that Mr. Marakovits didn’t add in some qualifier or note of caution. He may (or may not) have.

Because this is the first thing that came to my mind...

The “technology” that “stepped in” is TCAS. TCAS only works when both aircraft have functioning transponders -- with the altitude encoding turned on. The problem in this situation is that you have 3 aircraft. (You might want to ask yourself how TCAS works when you’re in a military formation flight while we’re here.)

Back in my day as a controller, if I was working a military formation flight of two, I’d only have the lead flight squawking a beacon code. Otherwise the ATC “conflict alert” would go off continuously and annoy me to death. Sometimes, in a large formation, I’d have everybody on a beacon code but I’d have them turn off the altitude reporting portion. TCAS provides “resolution advisories” (in this case, telling the American to descend) based on altitude. If an aircraft isn’t “reporting” its altitude, TCAS can’t give a resolution advisory.

I’ll grant you it sounds as if TCAS saved the day. But it’s possible it made the situation worse. We’ll just have to wait for the NTSB to tell us what really happened.

There’s a reason TCAS is a last-line-of-defense type system. The consensus is that we’re better off with it than without it. But it isn’t perfect. And if it gets “tested” too often, it will fail. Just like the rest of the system. It’s best if we avoid “testing” the system too often.

Don Brown
February 8, 2011

Rational Market Theory

As usual, my previous blog led me to more information which led me to another blog idea. When I tried to come up with a title a little more catchy than “Huh?”, I came up with even more information. Let me get out of this continuous loop and move on.

Exploring the rational market theory

”There was a model that dominated economics for almost 40 years. It's called the rational market theory. And what it said, in a very brief nutshell, is that the market is always right.”

You hear me whine about “The Market” all the time because I’m so tired of hearing conservatives talk about “The Market” being right all the time and “The Market” was so much smarter than us all, blah blah, blah.

I noticed these conflicting tidbits from two previously linked stories.

25 Highest-paid men

”1. Bob Nardelli -- Former Chairman, President, and CEO*
Home Depot (HD) --2006 Total compensation: $133.7 million*”


Portfolio's Worst American CEOs of All Time

”17. Bob Nardelli -- Nardelli was fired from Home Depot after losing market share, alienating executives, downplaying customer service, and refusing to cut his fat pay package. He was then hired by the private equity group Cerberus, which put him in charge of its struggling Chrysler unit. There, he took billions in government aid, only to face an ultimatum: Merge or face certain liquidation. ”

No, he isn’t the only example. You only have to move one space over to #18 of the worst. Stan O’Neal is #10 on the highest paid list with $46.4 million. Stan O’Neal was the the CEO of Merrill Lynch.

Disclosure: I own several hundred shares of Home Depot. I don’t own any shares of Merrill Lynch. Nobody owns Merrill Lynch anymore. Mr. O’Neal drug Merrill Lynch into the CDO and subprime mortgage scheme. When that blew up, the U.S. government arranged a shotgun wedding with Bank of America.

“The Market” isn’t rational. Even the people running it aren’t always rational. That was the reason it was regulated after The Great Depression. That’s the reason it should be regulated again -- after The Great Recession.

Don Brown
February 8, 2011

Monday, February 07, 2011

I Support Public Campaign Financing



You should too. Unless you just like your politicians beholden to the big money.

The Republican Party (the Party of the Rich) doesn’t support it. Isn’t that enough right there to convince you there is something to it?

The Death of Public Campaign Financing

”Of course, public financing isn't dead yet. The next crop of presidential candidates, including a diverse crew of GOP hopefuls in 2012, may yet launch their campaigns with Treasury funds. But even if public financing lives to see another election, the Supreme Court may be poised to finish it off once and for all. The high court has agreed to take up a challenge to a portion of Arizona's public-financing system, which gives extra money to candidates who face wealthy, self-financed opponents. Given this Court's antipathy toward election regulations, that challenge could spell doom for public financing.”

If Republicans vote against it but use it -- and the current Supreme Court is looking for a case with which to kill it -- you know it must be a good idea. Imagine, your Congressman sitting down to a dinner with his family -- instead of yet another big donor. Imagine your Congressman burning the midnight oil working on a Bill -- instead of chasing down more campaign cash.

I’m such a dreamer.

Don Brown
February 7, 2011

Saturday, February 05, 2011

Snow Derivatives



I kid you not -- snow derivatives.

Big storms drive trade in snow derivatives

”Jeff Hodgson of the Chicago Weather Brokerage sells snowfall derivatives. Here's how they work:

JEFF HODGSON: I'm going to pay $10,000, and if it snows over 40 inches in Chicago, that option will be worth over $25,000. If it doesn't snow over that level, then I lose my $10,000.”


Do you get the feeling we didn’t learn a single thing from The Great Recession? Isn’t running a business tough enough? Do you have to learn how to gamble on the weather too? What does this do for the economy? What does it do for the country? What does it do for humanity? I’m coming up with the answer “nothing” over and over again. How about you?

While I’m here, you might want to notice that Paul Krugman mentioned Jamie Dimon in his blog today. (I mentioned him on Tuesday.)

”If he cares about making even more money, it’s purely as a way of keeping score. And once you’re motivated mainly by considerations of prestige, you start to care more about whether the president is saying nice things about you than whether his actual policies are letting you off scot-free from any consequences of your industry’s sins.”

There is a danger in all this -- besides the obvious greed. The pursuit of fantastical profits is one of the things that lead to The Great Recession. Take Madoff for example. Everyone (now) recognizes that he was a crook. But for a long time, honest businesses were trying to compete with him -- and Madoff was winning. He offered larger and more consistent returns to his investors. And investors flocked after what he was offering. That put the pressure on the law-abiding businesses to increase their returns -- or go out of business. That of course, leads to a race to the bottom of the ethics barrel.

John Paulson (our 3.7-billion-dollar man) still isn’t recognized as a crook. At least by the law. He was just willing to be a lot less ethical than others. He was rewarded beyond measure for his lack of ethics. So were his clients. In that his clients weren’t committing any illegal or immoral acts, their consciences were clear. At least they could tell themselves that. And so could other investors that wanted the kind of returns that Paulson was offering. The race was on. If you wanted to compete with Paulson (who had to compete with Madoff), you had to find a way to increase the returns your investors were earning. You can’t do that by being more ethical than your competition. At least most of the time.

Deregulation sounds like such a harmless word. But allow me a little hyperbole to make my point. Thou shalt not steal. Try deregulating that.

Regulations provide a level, ethical playing field for all parties. I understand that regulations are viewed as cumbersome and sometimes wasteful by businessmen. Reasonable businessmen should recognize that good regulations keep everyone honest. Or at least closer to honest. There is a happy median somewhere that we can all live with.

As far as ethics, you might remember I said Jamie Dimon (of JP Morgan Chase) was one of the better-behaved bankers. Notice I didn’t use the word “ethical”. My brother pointed me towards the rash of “xtranormal” videos on YouTube about the “Chase 123 drill”. I haven’t found one “clean” enough that I’d want to embed on my blog. (The cursing is really excessive but I guess that’s the world we live in.) However, the sheer number of videos speaks volumes as to how the employees of JP Morgan Chase feel about the ethics of their company.

It may be a little difficult for a man that makes $40 million a year to understand how a customer with a food stamp debit card feels. Pushing your customers into online banking makes financial sense. The ethics of pushing a computer-illiterate 80-year-old into an online checking account are a little less clear.

Don Brown
February 5, 2011

Friday, February 04, 2011

Wake Turbulence and Jimmy Carter



James Fallows’ absence is still providing interest over at his blog. You’ll have to go there and read “NASA's Iconic Red Vortex Photo: 'The Rest of the Story'” to figure out what Jimmy Carter has to do with wake turbulence.

I thought I’d just point out that other people “get it”.

”Because we see computer images on TV of airplanes the size of counties flying over a map of the U.S., we come to think of the airspace as crowded. In reality, the airspace is not crowded. Instead, the runways and the arrival queue of airplanes lined up to land are crowded. The airplanes are spaced in the queue that keeps each safely following an airplane away from the spinning wake vortex of the previous airplane.”

Even better, the writer -- Bruce J. Holmes -- is involved in NextGen. So, at least someone operating at the higher (than me) levels understands that “It’s the Runways, Stupid”.

Don Brown
February 4, 2011

Wednesday, February 02, 2011

Paulson. Again.



You might remember I’ve mentioned the $3.7-billion-dollar man several times. I’m sure you’re not surprised to know he’s in the book I’m reading -- All the Devils Are Here -- anymore than I am.

Here’s three more must-read paragraphs. Don’t worry about all the fancy names for financial instruments. You’ll understand the truth of it. It’s pretty simple.

I’m trying to find words to describe how despicable a system is that won’t let bankers keep people in their homes because some Wall Street guy is going to get rich if they get kicked out. I’m failing.

I can’t say enough good things about All the Devils Are Here. It will make you mad. It’s all so unbelievable. You’ve got to read it.

By the way, I always miss the Shakespearean references (because I can’t read Shakespeare.)

”Hell is empty. And all the devils are here.”

The Tempest
William Shakespeare
1611


Don Brown
February 2, 2011

Tuesday, February 01, 2011

Increasing Unemployment



Yes I hope the title makes you do a little head scratching. Now put on your thinking cap and think.

Union membership down slightly among federal employees

”The overall drop in federal union membership is tied primarily to the government's wider use of contract and temporary workers, according to J. David Cox, secretary-treasurer of the American Federation of Government Employees.”

We have a Democratic President and (until recently) a Democratic Congress and we’re still contracting out Federal employees? To what end? To increase unemployment?

What’s that? You say we’re not increasing unemployment, we’re just transferring jobs from the public sector to the private sector? First, do you really think that is smart? You know, considering what the private sector did to the world’s economy? Second, whose private sector are we transferring jobs to? Read it and think.

Only 47% Of Working Age Americans Have Full Time Jobs

”43.2 million Americans receive foodstamps. That's 18.1% of all working age Americans. If they all have on average 1.5 dependents, which is probably a reasonable estimate, a full one third of the US population receives at least part of their food through this system.”

Pay attention now, this isn’t going where you think it is going.

”Of course, these are not really stamps anymore, or any sort of paper, they’re now "food stamp debit cards". Michael Snyder at Economic Collapse dug up an ABC News article from April 2009, which deals with the fact that JPMorgan Chase is one of the main servicers of the "food stamp debit cards" (in 26 states). JPMorgan also services child support debit cards (in 15 states) and unemployment insurance cards (7 states).”

I can’t tell you how much money JPMorgan Chase got in the bailout because they bought Bear Stearns and Washington Mutual as part of the bailout. All I know is that is was worth billions and billions -- like $30 billion.

So what does JPMorgan Chase do with all this money and food stamp contract?

”Take Indiana. JP Morgan gets 62 to 64 cents for each food stamp case handled monthly there. With 296,245 cases right now, that means the state is paying JP Morgan $183,672 a month on top of any other fees it collects. Indiana eliminated 100 full-time employees when it hired JP Morgan to make the program cost-neutral [..].”

Well, technically, the State of Indiana “eliminated 100 full-time employees”. JPMorgan just enabled it. How?

”But the greatest statement the article makes, and the reason ABC looked into this in the first place, is that JPMorgan outsourced its call and service centers for the "food stamp debit cards" to India.”

Yes, I checked. Here’s the original ABC News story.

It’s hard to wrap your head around all this. We are “unemploying” people with good-paying, steady government jobs and giving the contracts to government-subsidized, government-bailed-out corporations that just caused the greatest economic calamity since The Great Depression. And they in turn take those jobs -- that entail dispensing government funds -- and ship them to India.

So now, 100 people that use to work for the government are possibly getting food stamps -- food stamp debit cards -- from one of the companies that just helped cost them much of the value of their home and 401k.

Make no mistake about it, JPMorgan Chase was in the thick of the financial crisis. It’s CEO -- Jamie Dimon -- is considered one of the better-behaved bankers. His company was in better shape than most. That’s the reason it survived when other didn’t. Let’s see what he has to say about contracting out work.

From Fortune in 2006

"When you're outsourcing it's almost impossible to do the integration, because people don't care that much," he says. "We want patriots, not mercenaries." And of course, he also hates paying the markup for having outsiders do the work."

From The New York Times in 2010

“Dimon inculcated a culture of risk-control by preaching accountability. His point in firing consultants was that employees, not outsiders, should be responsible for the bank.”

You can’t make this stuff up. Do you want “patriots” in charge of your government instead of “mercenaries”? Do you want “employees” doing the government’s work or “outsiders”? Do you like “paying the markup”?

Do you like increasing unemployment? Then stop listening to these fools that tell you government can’t do anything right and work to make your government better. There are literally millions of people that would love to get a government job right now. Some of them are brilliant. Some of them are unemployed bankers that would make great regulators. Tell your Congressmen to hire Americans to look after your interests. Tell them you want “employees” looking after your welfare -- not “mercenaries”.

Don Brown
February 1, 2011