Obscured By Clouds

If there is one thing we have learned during CA's budget crisis, it's this: when given the choice between raising taxes and cutting spending, most Californians will choose cutting spending. The only people who seem to disagree with this are: the political class, the public employees unions, and the members of the media who provide them with political cover through sympathetic press coverage. But, that's typically been enough in the past to keep the money machine going.

For the state-media's part, the template of a news story about "CA gov't in crisis" is simple: stoopid Republicans want to reduce state spending to zero while noble Dems are trying to keep firehouses and kindergartens open. This story in the Chronicle is typical of the genre: State's Most Conservative County Uses Much Cash

Modoc has the highest Republican registration of any county in California, it unfailingly elects anti-tax Republicans to office, and the vote here against last month's ballot measure that would have raised a variety of taxes was one of the most lopsided in the state. And yet, per capita, Modoc County gets more state taxpayer dollars than all but one of California's 58 counties.

The prevailing attitude among the right-wing ranchers and modern hippies who define Modoc County is of fierce self-reliance - but more people here than just about anywhere else depend on welfare checks of some kind to get by.

So with state Republicans blocking new taxes and insisting on deep cuts in taxpayer-funded services, does that make this most solid of GOP bases politically conflicted? Or, worse, just plain ignorant?

Duh, ya mean these rednecks up there in Modoc are anti-spending, but "get" more state money than CA's other counties? Oh, the hypocrisy! (always the subtext of stories abou the CA GOP) And, just in case you don't get the idea, the reporter also suggests all those dopey conservatives are jest gettin' by on welfare. The story even dares to say Modoc has more welfare recipeints than "just about anywhere" - a numeric impossibility. More than in LA? More than in SF? More than in Fresno? Also, never mind that the conservatives that the reporter talked to are ranchers and contractors with jobs. Also, never mind that Modoc has a population of a couple thousand registered Democrats, who maybe - just maybe! - are the ones on the welfare rolls.

There is so much wrong with this story, it's hard to know where to start. First, when the reporter talks about Modoc getting the "most" money, what he really means is the most per capita, not the most in terms of dollars and cents. Second, and worse, he oddly leaves out this fact: the amount of money per capita that Modoc receives! I thought this was important information!

Modoc is the size of Connecticutt and has a population of less than 10,000. As one guy points out in the linked article, Modoc has to do a lot of road maintenance that benefits relatively few people. That might account for Modoc's large "per capita" state spending. Is the Chronicle saying that rural counties shouldn't be getting money to maintain their roads? Given the above, it just might be that Modoc is not what you would call a representative sample, but that never seems to matter when there are Republicans to be bashed.

The story also manages to obscure the question of how much health services - another big budget line item - Modoc consumes. The story simply states that roads and health services consume 70% of the state's general fund, but doesn't state how much Modoc consumes. Must be 70%, as that's the only number we have! But, with less than 10,000 in population, how much could Modoc possibly spend? Without looking, I am willing to bet that SF and LA counties each provide health services to more than 10,000 people per day. But, whereas in Modoc, the consumers of state services are locals, the consumers of state services in larger counties are just as likely to be mooches busing in from out of state as they are local residents. But, somehow, these questions are ignored to make the odd point that Modo is consuming health services even though they are Republicans. Note to the media: I know you think the GOP is a secret cabal, but that does not mean we get a Cloak of Invinsibility when we register our party affiliation.

Really, what this story represents is a fundamental misstatement of the GOP position regarding government spending. Liberals always seem to believe that the GOP wants to cut gov't spending to zero. While you can always find some old coot in the mountains who might say this, the vast majority of Republicans simply want gov't spending to be reduced, not eliminated entirely. No one really objects to road maintenance, for heaven's sake. That's something the gov't should be doing. Instead, CA's gov't distracts itself with regulating the environment, building high speed rail, and paying pension and health benefits to state employees that would make the UAW blush. The GOP is a party of limited gov't, at least in theory. It is not a party of NO gov't. Those are Anarchists. Go bug them about consuming gov't services while railing against the State.

CA's buget crisis is not just about money. It's also a crisis of a political philosophy which wants to expand the size of gov't, but never wants to talk about how big the gov't should be, and how the gov't should pay for its expenditures. That's not the GOP's problem. But, for some reason, it's easier to blame a few thousand ranchers in Modoc, rather than the unproductive souls on the state dole and in the halls of the State Legislature.

Don't Trust Anyone Over 30

San Francisco likes to revel in its self-proclaimed rep as a hotbed of cutting edge, avant-garde art. So, it's funny how many of SF's leading lights are decades-old institutions, with the Sixties the decade to which many trace their origins. Now, the SF Mime Troop - an agit-prop satirical theater group with an undeserved reputation for humor and political insight is celebrating its 50th - yes, 50th - anniversary. That's 50 years of cursing, giant puppet heads, and screeching diatribes about NixonReaganLimbaughGingrichBushPalin. SF Mime Troupe Turns 50

Few American performance companies can boast such longevity, let alone small troupes with no endowment. Who would've thought that an avant-garde arts experiment would become one of the nation's best-known companies within its first decade? That it would launch careers as diverse as those of Peter Coyote, Shabaka and Bill Graham? That a gritty anti-establishment troupe would win a Tony award? Or that mimes could be this vocal?

Actually, the Mime Troupe has hardly ever been silent. From the first performance in 1959 of what was then the R.G. Davis Mime Studio and Troupe - "Mime and Words" - founder Davis tried to signal a distinction between his work and silent mimes like Marcel Marceau. Davis, who studied with Marceau's teacher Étienne Decroux, worked with physically based, or mimetic, acting. Through decades of performing commedia dell'arte and original musicals in the parks, the Mime Troupe has made lots of noise.

It's also changed considerably over the years. Davis' Mime Troupe embodied the progressive turbulence of the '60s, spreading its cultural and political influence on tour. Davis left in 1970 and the company became a collective, as it still is. The troupe of the next three decades, though it continued to tour and mount indoor shows until funding dried up, is best known for its rousing park shows by Holden, director Dan Chumley and composer Bruce Barthol. The 21st century Troupe, exemplified by actor-playwright Michael Gene Sullivan and actors Ed Holmes and Velina Brown, keeps up the struggle to sharpen the collective's message through its summer shows.

"I think the Mime Troupe's job has always been to challenge the accepted stories of American-style capitalism," Sullivan says, taking a break from rehearsals for the customary Fourth of July opening in Dolores Park. The new musical, "Too Big to Fail," focuses on the national addiction to credit, using fables told by a traditional African storyteller to explore "an economy that needs us to be indebted consumers

No one goes to see the Mime Troupe to be enlightened. They just want to see their progressive politics affirmed. Another 50 years should be no problem.

What We Talk About When We Talk About...

The least surprising column this Sunday had to have been Maureen Dowd's examination of the Mark Sanford affair. A quick summary: "Republican politician is having sex. Hyuck. Hyuck." And, it's - wait for it - a symbol of everything wrong with the GOP. A symbol, you say! Where did you get that idea? Genius In A Bottle

Sanford should give his piety a rest. He told his cabinet that the Psalms taught him humility. (There’s a chance that a younger Argentine boyfriend of Maria’s also taught him humility, by jealously hacking into her e-mail account and leaking the governor’s missives.)

Sanford can be truly humble only if he stops dictating to others, who also have desires and weaknesses, how to behave in their private lives.

The Republican Party will never revive itself until its sanctimonious pantheon — Sanford, Gingrich, Limbaugh, Palin, Ensign, Vitter and hypocrites yet to be exposed — stop being two-faced.

That's a confusing list. I get Sanford, Gingrich, Ensign, and Vitter (although Gingrich's adultery is 10 years old. Maureen, you need to freshen your material). What have Rush Limbaugh or Sarah Palin done? Is MoDo sitting on a Sarah Palin sex scandal that I am not aware of? I am confused.

Speaking of "hypocrisy," what about noisily tolerant liberals who demand respect and tolerance for sexual diversity out of one side of their mouths while chortling over ordinary heterosexual peccadillo's out of the other? We've been told Americans should be more sophisticated and nuanced about sex "like Europeans." Honestly, the more I hear about these sorts of middle-age affairs, the more I am overcome with a rueful sense of melancholy over the fleeting transience of human folly. Is that European enough?

More to the point, does Dowd honestly believe that the GOP is unique in not living up to its ideals? I know she went to Catholic school, but she wasn't literally raised in a convent. Dowd undoubtedly knows about the grubby "cash in envelopes" corruption that greases many of the wheels in the Democratic Party; but, if she had to acknowledge that, her world view (not to mention her status as "most emailed" columnist at the Times) would collapse. And, examples of "two faced" "sanctimonious" Dems abound. Why, just today, we have the following:

1.) Detroit Councilwoman Pleads Guilty to Accepting Bribes for votes
Monica Conyers, a City Council member and the wife of Representative John Conyers Jr., pleaded guilty on Friday to a felony charge of conspiracy to commit bribery and accepting cash-filled envelopes in exchange for her tie-breaking vote on a city contract
Huh, a Detroit councilwoman. Hasn't Detroit been in the news lately? Is this what Detroit's politicians have been doing with their time while their city dies? And, it says here that she's married to John Conyers, a senior member of the House of Representatives. That seems to escaped a lot of the eager "culture of corruption" monitors out there like MoDo.

2.) Then there's the John Edwards sex scandal, which is the gift that keeps giving: Aide's Tale of John Edwards Sex Tape

Former Edwards aide Andrew Young says the ex-senator and his former mistress, Rielle Hunter, once made a sex tape, according to someone who has seen Young’s book proposal.

St. Martin’s Press just inked a deal with Young, who also says in his proposal that, contrary to his public statement last year, he is not the father of Hunter’s infant daughter — Edwards is. Edwards has denied that.

John Edwards? Wasn't he, like, the Dems' candidate for VP way back in 2004? And a strong candidate for President in 2008? In fact, wasn't he espousing the sort of populist lunch bucket politics that Dems always say is there raison d'etre? And - unlike Vitter, Ensign, and Sanford,who were all fairly obscrure pre-scandal - wasn't Edwards one of the Dems leading lights for several years? Sounds like he could symbolize a culture of corruption, if you are looking out for that sort of thing.

3.) And, in Illinois, there is a scandal involving the children of politically connected local Dems obtaining admittance to the University of Illinois Law School. University of Illinois College of Law Scandal: Now With Emails
This morning, we mentioned that the University of Illinois College of Law admission's scandal. It appears that former Illinois Governor Rod Blagojevich pressured University of Illinois Chancellor, Richard Herman, and Heidi Hurd -- former dean of the University of Illinois College of Law -- to admit under qualified students who were politically connected. In exchange for admitting those students, university officials attempted to obtain jobs for graduates of the College of Law.

The Chicago Tribune reports the results from its investigation of Illinois law school:

The documents show for the first time efforts to seek favors -- in this case, jobs -- for admissions, the most troubling evidence yet of how Illinois' entrenched system of patronage crept into the state's most prestigious public university.

They also detail the law school's system for handling "Special Admits," students backed by the politically connected, expanding the scope of a scandal prompted by a Chicago Tribune investigation.

Gee, aren't universities and law schools practically arms of the Democratic Party and progressive politics? And, isn't there perpetual controversy over affirmative action admissions which limits opportunities to normally qualified students? And, you say well connected Dems in Illinois (a Dem-dominated state) were allowed hundreds of "special admits" at the public university? It almost makes the whole system seem corrupt!

Heidi Hurd, the law school Dean who was at the center of all this, sent one email complaining about the demands of the special admits' proponents in which she complained, "Sheesh! It's enough to make one want to be a Republican!" Ho! Ho!

That is as pure an example of the sanctimonious false consciousness that lies at the heart of all good liberals. Hurd is undoubtedly all good things: progressive, feminist, pro-gay marriage, anti-Iraq War, etc. And, of course, "Republicans are evil." She, and the other sophisticates might want to look in the mirror before they bust a gut laughing.

Decline and Fall

In the rise and fall of Great Powers, there is the inevitable descent into decadence and decay, as corrupt sons and grandsons squander the wealth and opportunities into which they are born. Such is the case with GM.

We are intimately familiar with the lifestyles of GM's useless executives, whose lavish salaries and opulent perks were inversely proportional to the actual work they did managing their company. But GM's unionized work force did just as much to slowly destroy their employer. GM's financial problems are management's fault, of course. But, GM's more basic troubles - bad build quality, reliability problems - can be traced straight to the factory floor. In a largely sympathetic article about the decline of the black middle class in Detroit, the NY Times inadvertently gives us a glimpse of what has been going on at GM's factories: GM, Detroit and the Decline of the Black Middle Class

A practicing Christian, Powell was taken aback by what he saw taking place around him. The plant was a world of temptations unto itself, with drugs, alcohol, numbers runners, bookies and even “parking-lot girls” who would come to the plant during lunch breaks to service male workers. “Anything you can find outside the plant, you can find inside the plant,” Powell says. “You either get caught up in it, or stay apart from it.”

Powell gradually settled in at Pontiac Assembly and was soon piling on as much overtime as he could. In a good week, he worked four 12-hour days and a 16-hour day. Overtime was especially abundant between the beginning of November and Christmas, when hunting season caused rampant absenteeism at the plant.

Charming. There's nothing like a "Last Days of Pompeii" atmosphere to add to the portrait of American manufacturing gone deeply wrong.

The problems that arise from the UAW's monopoly on labor are not just limited to excessive pay, unsustainable pensions, and the use of union dues to buy political protection from the Democrats. On a more basic level, unions ruin the work ethic of its employees, who can't be fired, and who spend their days whiningly adhering to the letter of their work rules, rather than simply putting in an honest days' work. Read the above again and ask yourself if the same is going on at a typical Toyota plant. The answer is "No," at least with regard to Toyota's Japanese factories. I will make no great claims for the quality Toyota's American workers.

Good luck learning that either in the media or popular culture, by the way. In the newspaper, the bad guys are always management. In songs and movies, the guys "on the line" are always noble and "gettin' the shaft," while management conducts their business in sinister undertones. The unions get Bruce Springsteen and John Sayles, while management gets unreadable 1000-page Ayn Rand novels. The last movie I can remember that took a critical look at unions was "F.I.S.T." That was 30 years ago. Since then, it's been "My Hometown," "The Boss Man giving you Hell," etc.

Unions - like many favored progressive institutions - benefit from favorable media portraits that let them wear a cheap chrome halo, while the grubby truth goes unreported and largely unremarked.

The Tao of Cars

Will the ways of the East always remain a mystery to the West? Check out Toyota's plan to revive its fortunes and then imagine the fat, ossified execs at GM coming up with something similar. And, even if they did, imagine their fat, work-rule obsessed manufacturing employees going along without pouting: Toyota Boss Vows To Change Priorities

The new president of Toyota Motor Corp. on Thursday acknowledged the company erred in the last decade with an all-out push to become the world's largest car maker and vowed to change priorities.

"I do not think we were wrong to expand our business to meet the needs of customers around the world but we may have stretched more than we should have," said Akio Toyoda, grandson of the company's founder.

Mr. Toyoda told reporters that his primary goal is to change the company's priorities, putting products first, not sales and profits.

"Rather than asking, 'How many cars will we sell?' or, 'How much money will we make by selling these cars?' we need to ask ourselves, 'What kind of cars will make people happy?' as well as, 'What pricing will attract them in each region?' Then, we must make those cars," he said (emphasis added-Psota).


Mysterious! Inscrutable! Zen-like! Consensus driven!

Obviously, that could never work in America, where the goal of American car companies is to make pension payments, and provide permanent employment to dues-paying union employees who happen to live in Michigan. Good luck with that.

The Kid Is Not My Son

Well, I started this week by snootily declaring that I don't like to write about tawdry gossip, but now I see I have been covering Chris Brown/Rhianna, Mark Sanford, and now the death of Michael Jackson: Michael Jackson Suffers Massive Heart Attack

Michael suffered a cardiac arrest earlier this afternoon and paramedics were unable to revive him. We’re told when paramedics arrived Jackson had no pulse and they never got a pulse back.

Michael is survived by three children: Michael Joseph Jackson, Jr., Paris Michael Katherine Jackson and Prince “Blanket” Michael Jackson II.

Jetting around the 'net, I see that the Youtube video almost everyone is linking to is "I Want You Back," whose title and bouncy spirit seem doubly poignant today. Jackson wasn't just consumed by fame. His life charts one of the basic changes in American pop culture from breezy low-budget fun to an over exposed, drug addled "spectacle" dependant on $$, rather than inspiration to survive.

Still, Jackson's legacy is a strong one. I could listen to the rhythm guitars on "Thriller" and never hear better chicken-scratching. And tell me you can walk into a mall, hear the opening beats of "Billie Jean," and not want to reach for your red fedora! Jackson is gone (mercifully for him, I think), but his best music will reasonate for a long time.

Graham Greene in the Palmetto State

When reports surfaced last week that South Carolina governor Mark Sanford had been out of touch for the last week, only two reasons crossed my mind that could have explained such behavior: he was suicidal or he was having an affair. Well, now we know: he isn't suicidal. Whew! I mean, whoops! South Carolina Governor Mark Sanford Admits Affair

South Carolina GOP Gov. Mark Sanford admitted Wednesday to an affair, and resigned his position as chair of the Republican Governor's Association following a strange week in which the governor dropped off the grid and could not be located.

Later in the day, Sanford's wife Jenny released a statement saying the couple had begun a trial separation two weeks ago.

“I have been unfaithful to my wife. I developed a relationship with what started out as a dear, dear friend from Argentina,” Mark Sanford said in a rambling and often emotional news conference at the state capital in Columbia.

“I’m a bottom line kind of guy I’m just gonna lay it out. It’s gonna hurt and I’m going to let the chips fall where they may,” said Sanford, often touted as a potential 2012 presidential hopeful.

Not anymore, champ. The affair may have been retarded in the extreme. But, Sanford's decision to disappear and then have his staff lie about it was the sort of recklessness that we normally associate with Democratic presidential candidates. I saw some libertarian types saying things along the lines of "so what if the governor disappears? We can get along without one for a few days!" Wrong. The governor's job is not to stand around giving orders. His job is to hold the damn office, meaning he is available on a moment's notice to carry out his official duties. Usually, this is little more than ribbon cutting and intern diddling, but you can never plan for a crisis, and Sanford took a huge risk in simply disappearing.

Of course, we are being treated once again to snotty commentary about the power of the male libido. Maybe it's time for dads across the country to turn to their sons and say, "Kid, no woman - none - is worth what he is going through right now." The problem is not the male libido; it's the nitwit male brain that comes up with lines of reasoning like this, "I am the governor of South Carolina. No one will notice if I disappear for a week to spend a summer holiday in Buenos Aires!"

This is, of course, a bad day for the GOP. Sanford was one of the few Republicans out there arguing boldly against Obama's stimulus. But, let's get real. He was not going to be the GOP nominee for president in 2012 or any year, any more than George Allen would have been the nominee in 2008. OK he made some appearances and wrote some op-eds, and lost a good fight with the State Legislature. But, he never gave any sign of having some great intellect (now confirmed!), nor does he have any sort of natural charisma that makes you sit up and think "wow!"

The presidency was never Sanford's to lose, but his governorship? Pooof.

Instant Legacy Mix

Donald Fehr's announcement that he is retiring as head of the Major League Baseball Players Association has brought forth a lot of commentary about his "mixed legacy." On the one hand, baseball players are making a lot more $$ than they were 25 years ago. On the other, Fehr was one of the major voices impeding any sort of steroid testing in baseball and effectively helped cover up the true extent of steroid use in the major leagues.

Truth be told, Fehr's legacy isn't mixed at all: the sizable increase in players' salaries was intimately linked to increased steroid use. As salaries headed for the stratosphere, the incentives to boost your athletic and financial fortunes through juicing grew exponentially, especially when everybody "knew" that some of the top performers are openly using steroids. Not only that, the temptation to use steroids to recover from injuries, as apparently happened with Andy Pettite and Rick Ankiel, is even more overwhelming. A little juice and you can maybe stay in the big leagues just a little longer, living the good life and putting a little more $$ in the bank.

I won't begrudge baseball players their salaries, or Fehr's efforts to secure said salaries. However, the MLBPA's willingness to look the other way on steroids didn't do anyone any good. Ultimately, it has left all of the players in the post-strike era under a cloud of suspicion. That is Fehr's true legacy.

Torn Curtains

I try to avoid getting into tawdry gossip around here, but I thought the Chris Brown "sentence" in his domestic violence case for beating up Rhianna was inexplicably weak: no jail time, a few years' probation and 180 hours of community service. Not only that, Rhianna (the victim!) had no idea that a deal was in place, and showed up in court ready to testify against him. We've all heard how hard it is to get DV victims to testify against their abusers. Now, in the most high profile DV case in years, where the victim stands ready to testify, she's kept in the dark and then sent home. How's supposed to encourage more victims to come forward?

I'm sorry, but if Brown had simply walked up to a woman on the street and started whaling on her, he would have gone to jail, simple as that (and faced a civil claim for battery). Instead, he beats up his girlfriend and it's probation + community service. Yeah Yeah, I get it. "He had no prior criminal record." Uh, so what? If there was ever a time to make an example of somebody, it was here. Instead, the system blinked and looked the othe way.

Right Wing Book Club

By Henry Hazlitt

Hazlitt is (or was, he's long dead) a unique figure in American economics: a popularizer of the Austrians ideas about political economy, monetary policy, and the Austrian critique of the socialist and Keynesian ideas that dominated policy making in the West for much of the 20th century. Hazlitt is half-forgotten today, although Thomas Sowell has, intentionally or not, picked up his mantle; but at one time he was a big deal - the NY Times, among other elite media outlets, always gave him space to opine on the evils of inflation, deficit spending, and the false promises of progressive economics.

This is undoubtedly Hazlitt's most popular work, a quick but thorough critique of the New Deal, Keynsian thought, socialism, and government interference in the economy. He first published this book in 1946, but updated it in 1978 (that's the edition that's in print now). You don't have to fear whether anything in it is old-fashioned or out of date; the persistence of progressive economic ideas is such that many of Hazlitt's targets - rent control, deficit spending, inflation, job creation through unionism, economic growth through government "stimulous"- are depressingly au courant.

The book is divided into three parts. The first part is very short and contains the "lesson," to wit: economics is useful only when it studies both the short term and long-term effects of a particular policy. The second, much longer part of the book, applies the lesson to the many cherished war horses of progressive economic thought. For Hazlitt, the problem with Keynes, and the politicians who applied his theories, was that they were only concerned with the immediate, targeted effects of their policies. For example, if the government built a bridge to stimulate employment, the Keynsians would look at the busy bridge builders, and the completed bridge, and declare their policy a success. They did not see, or refused to see, the extra taxes paid, the resources diverted, or whether the objects of government spending were actually neccessary.

Having stated the Lesson, Hazlitt applies it across the spectrum of progressive economic initiatives: rent control, minimum wage laws, unions, deficit spending, inflationary monetary policy, and corporate welfare. All are critiqued in a manner that should be familiar to anyone who ever claimed to be a fiscal conservative. And yet, while reading this is certainly intellectually bracing, it gives one pause to realize how persistent these ideas are despite decades of criticism by the likes of Hazlitt, as well as the accumulated evidence of the damage such policies, when taken together in aggregate, can have across the economy. I mean, Paul Krugman was in diapers when this book was first published, but the ideology he expounds upon is apparently evergreen.

It's not hard to see why this might be. Big Government isn't just about control. It's also about delivering goodies to favored industries and voting blocs. Hazlitt has one chapter called "Saving the X Corporation" that could have just as easily been written about GM and Chrysler. He has another chapter on the absurdities of a farm policy based on pricing parity, so that prices for farm products are brought on par with prices farmers were able to command between 1909 - 1914 (hey! we've got a centenary coming up!). Most important, he debunks the Left's assault on saving, a cry that arose like the Eternal Return when Americans stopped spending in the face of the Great Recession. None of this really matters because the essence of progressive economics is to provide the intellectual rationale for heavy interference in the economy whenever a favored group arrives in DC carting barrels of money and/or grievances.

"Economics In One Lesson" is a rigteous attack on progressive economics, including a lengthy section on the Left's enthusiasm for inflation. While published decades ago, the information and arguments in here are fresh because the ideas that Hazlitt was combatting are still the default policy prescriptions of the Democratic Party. It's a quick easy read, but one that is thought provoking and educational. Yet it is also distressing to realize that the ideas critiqued here have changed so little that this book can retain its currency.

The Lion That Roared

In the chaos of last fall's panic in the financial markets, a fascinating tale went nearly unremarked in this country: the attempt by Porsche to acquire Volkswagon through an immense short squeeze. The attempt itself was audacious (Porsche is much smaller than Volkswagon), and for a time it looked like it might have succeeded. Porsche, however, has come crashing back to earth and now the mouse that roared has found itself trapped in the cat's paw. Tables Turn in Transaction of Two Auto Giants

When Wolfgang Porsche learned that his family’s sports car company would need an emergency cash infusion from its giant rival Volkswagen, he “went absolutely white.”

It was as though he’d heard someone died,” said one person briefed on the secret meeting between executives of the two companies.

The meeting, at the offices of the governor of Lower Saxony state, where Volkswagen is based, effectively ended the company’s audacious bid for Europe’s largest automaker. It also was the beginning of the end of Porsche’s cherished independence.

A day after the meeting, on March 23, fax machines around Germany spit out papers for Volkswagen’s board members to sign: an emergency loan of 700 million euros from Volkswagen, about $950 million at the time.

“This is becoming a reverse takeover on a financial level,” said Arndt Ellinghorst, head of automotive research at Credit Suisse in London. “Porsche has debt and VW has the luxury of cash.”

OK so the rich alpha German male (the name "Wolfgang Porsche" is probably enough to ensure a steady supply of nubile women) has had his comeuppance, as has Porche, which didn't acquit itself well during the short squeeze last fall. Porsche essentially kept mum about the size of its holding of Volkswagon stock, thus luring a number of short sellers to go short on VW. When Porsche strategically revealed the true extent of its holdings, all hell broke loose, and for a time VW was the most valuable company in the world while Porsche's owners became overnight billionaires. Sounds fun, but in many countries (like the supposedly "deregulated" US), such behavior is illegal. I guess they do things differently in Germany where, for all its noisy "social democracy," there is still a rich industrial elite that treats companies like BMW and Porsche as their personal duchies.

At heart, though, the role reversal — where Porsche turned from Volkswagen’s predator to its prey — is the latest scene in a family saga.

“In the end, this is about clans,” said Stefan Bratzel, head of the automotive research center at the University of Applied Sciences and Economics in Bergisch-Gladbach, near Cologne. “It is the Porsche clan versus the Piëch clan who belong to a single familial line, but maybe that makes the conflict that much harder.”

Both families descended from Ferdinand Porsche, who created the Volkswagen Beetle in the 1930s.

After World War II, Ferdinand’s son Ferry set up his own company, which became Porsche.

Meanwhile, Ferdinand’s daughter Louise married Anton Piëch, a Viennese lawyer; their son, Ferdinand Piëch, is now chairman of Volkswagen and has a seat on Porsche’s board.

In the early 1980s, the Porsche and Piëch clans beat back an effort by an errant cousin, Ernst Piëch, to sell his shares to a Kuwaiti investor. Instead, the Porsches bought him out, which allowed Wolfgang Porsche’s eventual appointment as chairman years later.

Four years ago, Porsche acquired a 20 percent stake in Volkswagen. Porsche’s chief executive, Wendelin Wiedeking, called the move defensive, and said that it was aimed at protecting one of his company’s most important partners from a hostile takeover.

But as time passed, it became clear that Porsche wanted full control of VW, so that the tiny carmaker could share the costs of developing new technologies with the much larger VW.

While interesting for the boardroom drama involved, this story also gives some insight into a possible future of US auto manufacturing, should the US's involvement in Chrysler and GM continue over the long-term. Porsche was able to make its play for VW because of the peculiar nature of its equity ownership: the German state of Lower Saxony is a 20% shareholder of VW's. It doesn't vote its shares (I think) and it it certainly has no intention of selling them. Thus, 20% of VW's equity is essentially inert leaving a much lower hurdle for a play such as Porsche's. And yet, the government is still intimately involved in VW's business. Note that the penultimate meeting described above took place in the office of the governor of Lower Saxony. VW's union is also intimately involved in its management and ownership, although not as much as the state.

Now, all of this doesn't mean that VW is some sort of moribund Leyland or "Government Motors." Indeed, between VW's ownership of VW, Audi, and now Porsche, I think we can say that it is much better positioned for success than GM has been in for at least 30 years, if not longer. For whatever reason, the combination of state interference, union management, and private ownership has resulted in a car company that still manages to make universally appealing cars for both the luxery market and the middle class. But this ownership structure also seems to encourage the sort of mischief that Porsche and VW engaged in, where rival members of families descended from Ferdinand Porsche could engage in a 21st century version of jousting. Really, with the spector of two rival "clans" fighting for the spoils of a car manufacturing kindom, while their unionized employees toil in their golden shackles of "lifetime employment," one wonders if Germany can truly be said to have moved beyond its feudal past.

The question for the US is: should this be the result we want for our state involvement with US car companies? 20 years from now, do we want to hear about stock shenanigans involving well-connected American investors while the US goverment is still a majority shareholder? Are we preserving a few score thousand union jobs for the sake of the few wealthy persons who can worm their way in as equity owners? I hope not.

1-2 Scrush On You

Charming HMO fraudster Richard Scrushy has finally attained a sort of immortality. A judge hearing the civil suit brought by Scrushy's former company has hit him with a $2.9 Billion (with a "B") judgment. It may be the largest judgment ever entered against a single individual. Richard Scrushy, Ex-Chief of Health South, Loses Civil Suit

Four years ago, Richard M. Scrushy, the former chief executive of HealthSouth, walked out of a federal courthouse in Alabama and thanked God that he had been acquitted of criminal charges that he defrauded the company. But on Thursday, a state judge still found Mr. Scrushy responsible for the fraud and ordered him to pay $2.9 billion to the company’s shareholders.

In his decision, the judge, Allwin E. Horn, declared that Mr. Scrushy knew about and took part in concocting false financial statements that inflated HealthSouth’s earnings to meet Wall Street’s expectations and to buoy the stock.

The fraud ran for seven years, totaled $2.7 billion and was “remarkable and perhaps unique” in its size and scope, the judge wrote.

I'd hate to be Scrushy's attorney right now. No matter how many times you bitch about how "the judge got it wrong!," you would hate to face your client after losing on a $2.9 billion verdict.

This being a NY Times story, they leave out some information even as they provide "just the facts:"

Mr. Scrushy had already been sentenced to nearly seven years in prison for bribing a former governor of Alabama, and he spent much of the civil trial in a holding cell away from the courtroom, lawyers said. He appeared in court only to testify in his own defense.

Yeah, that's right. But, I don't think it would have killed them to mention that the "former Alabama governor" was Don Seligman, a corrupt Democrat who accepted a $500,000 bribe from Scrushy for a seat on Alabama's hospital licensing board. Corruption in government health care?! I don't believe it! Seligman tried to weasel out of trouble by blaming a Rovian plot that was explicated on an absurd 60 Minutes segment, which I wrote about here.

There certainly was a political prosecution in this case, and the objects were Karl Rove and the Bush White House. You may recall a certain 60 Minutes report that breathlessly reported the supposed doings of Rove in orchestrating the Seligman prosecution. The whistleblower was a freakishly disturbed "Republican operative" (is there any other kind?) whose ill-fitting wig should have been a sign of her complete lack of credibility. Instead, she was hailed as a brave warrior of democracy. Where is she now? And, where are the politicians and editorial boards who once hailed her BS bravery? Well, they are now the ones in charge of our suddenly fragile nation. Funny how that worked.

Scrushy was scum, of course. But he was a sort of scum who thrives in the sweet spot where Big Business and Big Government collide. That he made his $$ in a health care related accounting fraud should be a warning to anyone contemplating increased government interference in health care. That it's very difficult to learn the truth about someone like Scrushy and his political enablers shows how determined the proponents of the "single payer" system are to make sure voters can't learn the truth about the sort of corruption that would inevitably arise under such a system.

The Parable of Arable Land, Pt 2

"Fortune" Magazine is running a story on its cover about the next great investment frontier: farmland! You may recall that we already discussed this issue here. But, if "Fortune" is writing about it, you know it's hit the mainsteam. How close are we to hedge funds investing in hard liquor and cigarettes, the ultimate bearish investments? Betting The Farm: The Land Grab For Arable Farmland

Over the past few years hedge fund gurus like George Soros, investment powerhouses like BlackRock, and retirement plan giants like TIAA-CREF have begun to plow (har har! - Psota) money into farmland - everywhere from the Midwest to Ukraine to Brazil. Canadian private equity firm AgCapita, which raised $18 million in 2008 to invest in Saskatchewan cropland, estimates that as of the first quarter of 2009, more than $2 billion of private equity money had been raised for farmland investments globally, and another $500 million was planned.

The growing flow of money into farms has persisted despite a major drop in the commodities markets last fall, prompted in part by the global financial crisis. In the spring of 2008 spiking grain prices caused food shortages and rioting in dozens of countries before falling some 50% by December. In fact, that crash has obscured a broader trend. Even after the correction, grain prices remain above their 20-year average, and food stocks around the world are still near 40-year lows. For many investors, last year's shortages are a preview of what could lie ahead.

Some of this is what you would expect. George Soros buying farmland in Argentina. The Chinese leasing land in Africa. Hedge funds dedicated to farmland opening their doors. But some investors are getting into bed with some shady operators in their pursuit of yield, crop or otherwise:
(Phil Heilberg) is putting his money into Sudan, Africa's largest country and one of its least stable. And he's hardly shy about the many ways his investment could go wrong. "I like to point out that it's a failed state, it's been sanctioned by the U.S., and it has a peace agreement that could unravel at any time and lead to armed conflict," he says. "The good thing is that you know what most of the risks are, and you can get paid for them."

With hundreds of thousands of acres of lush, undeveloped land in the Blue Nile and White Nile valleys, Sudan has the raw potential to develop into an agricultural powerhouse. Investors from Abu Dhabi, Qatar, Saudi Arabia, and Kuwait have already reportedly made deals to lease land in the predominantly Muslim northern part of the country. But in January, Heilberg raised a lot of eyebrows by announcing that he had agreed to lease roughly 1 million acres of undeveloped land - an area the size of Rhode Island - in Mayom County in southern Sudan

Heilberg is protecting his investment in the manner of colonialists the world over: he has hired the local warlord:
(Heilberg) makes no apologies for his associates on the ground, including the aforementioned Gen. Paulino Matip Nhial, 67, a hardened veteran of the long civil war between north and south Sudan who is now the deputy commander of the army in the south. Both Matip and one of his allies, Gen. Peter Gatdet, are on Jarch's advisory board. An Amnesty International report in 2000 recorded accusations that troops under Matip's command committed war atrocities. "One man's warlord is another man's freedom fighter," says Heilberg. "If you want to be in power over there you have to control territory, and listen, that involves tribal battles. You just have to recognize who is a good man and who isn't - who's doing it for power and who's trying to better his people. Matip is a good man."
Color me reassured!

Heilberg is clearly another rich amoral lefty; note his use of the Moorian formulation for a terrorist. Even worse, he worked for AIG! And, he knows where to go to find like-minded connections in DC.
Heilberg has cultivated connections to Washington. His vice chairman is former ambassador Joe Wilson, the husband of onetime CIA agent Valerie Plame and the man who blew the whistle on the Bush administration's obfuscations about Iraq
and yellowcake uranium. Another executive is a former CIA operative.
It's good to see Ol' Joe Wilson has landed on his feet, and is as morally dubious as ever. He might be striking land deals with warlords in a pariah state that once provided a safe-haven to Osama bin Laden, but he does have good intentions!
Wilson characterizes their approach as a version of doing well by doing good. "This is a deal that's certainly fraught with political risk," he says. "But we think that it has enormous potential to open an avenue of economic development for the southern Sudanese and make them shareholders in a positive outcome. That's my theory as I look at this."
"Theory" is one word for this, I guess. Another might be "rationalization," if Joe is capable of such mental gymnastics.

Gilligan's Island

To add insult to injury, Detroit is losing not just its status as the "Motor City," it is also losing some of the basic accoutrements of urban living, like grocery stores: Retailers Head For Exits In Detroit

They call this the Motor City, but you have to leave town to buy a Chrysler or a Jeep.

Borders Inc. was founded 40 miles away, but the only one of the chain's bookstores here closed this month. And Starbucks Corp., famous for saturating U.S. cities with its storefronts, has only four left in this city of 900,000 after closures last summer.

There was a time early in the decade when downtown Detroit was sprouting new cafes and shops, and residents began to nurture hopes of a rebound. But lately, they are finding it increasingly tough to buy groceries or get a cup of fresh-roast coffee as the 11th largest U.S. city struggles with the recession and the auto-industry crisis.

No national grocery chain operates a store here. A lack of outlets that sell fresh produce and meat has led the United Food and Commercial Workers union and a community group to think about building a grocery store of its own.

Frankly, a union based solution is hardly what Detroit needs. Unions have dominated Detroit's politics and economy since the Thirties. While there might have been short term benefits for a couple lucky generations of workers, the host has been sucked dry, leaving a dry husk.

Detroit's woes are largely rooted in the collapse of the auto industry. General Motors Corp., one of downtown's largest employers and the last of the Big Three auto makers with its headquarters here, has drastically cut white-collar workers and been offered incentives to move to the suburbs. Other local businesses that serviced the auto maker, from ad agencies and accounting firms to newsstands and shoe-shine outlets, also have been hurt.

The city's 22.8% unemployment rate is among the highest in the U.S.; 30% of residents are on food stamps

Those are not what you would call Demographics of Destiny

While all of southeast Michigan is hurting because of the auto-industry's troubles, Detroit's problems are compounded by decades of flight to the suburbs.

Hundreds of buildings were left vacant by the nearly one million residents who have left. Thousands of businesses have closed since the city's population peaked six decades ago.

Navigating zoning rules and other red tape to develop land for big-box stores that might cater to a low-income clientele is daunting.

I have it on good authority that journalistic trade craft requires that any reporter writing about Detroit must mention "decades of flight to the suburbs" - the dreaded "White Flight" - as if people left for the suburbs in a dastardly plot to destroy Detroit. It is apparently journalistically incorrect to mention decades of inner-city dysfunction, which reached its apogee with the corrupt "hip-hop mayor" Kwame Kilpatrick, in searching for the source of Detroit's ills.

In fact, there is very little effort to look at what really killed Detroit and other formerly prosperous cities in the Rust Belt. These were Democratic strongholds, dominated by corrupt Machine politics, overweening unions, and tax-happy politicians. They are beset with welfare dependents, drugs, slums, and crime. This did not happen overnight. But, slowly but surely, the economically productive portions of the economy funded all of government inertia that ruined the manufacturing heartland of the US until the money-makers were finally bled dry.

If the stock market falls, then there is a rush to the podium to declare the failure of the free market and an end to "illusory GOP growth." But when government policy fails, it seems there is never anyone wlling to demand less government, rather than more, as a solution to the destruction of a once-vibrant economic region. That last bit about retailers having difficulty navigating red tape might be the most ridiculous symbol of uselessly destructive government. What is the point of zoning laws and red tape when the city has been economically decimated? Where is the condemnation when a political philosophy ruins a region like this? Who is left to lift the shackles off of Detroit and its brethren?

I Threw a BRIC In The Window

The four BRIC countries - Brazil, Russia, India, and China - are trying to move from a random acronym first decribed by an economist at Goldman Sachs (boooo!) to an actual trading bloc. Emerging Economies Meet In Russia

Leaders of the four largest emerging market economies discussed ways to reduce their reliance on the United States at their first formal summit meeting on Tuesday. But they concluded with only a cautious statement suggesting a move away from the dollar’s role in global commerce and a call for greater representation of developing countries in global financial institutions.
That's nice. Is it rude to point out that three of these four (India being the exception) have repeatedly expressed semi-hostile views about the United States, including Brazil's Lula blaming the financial crisis on "blue-eyed devils?"

Along with its good relations with the US, India is in many ways the odd man out in this group:

Russia’s president, Dmitri A. Medvedev, said the main point of the meeting was to show that “the BRIC should create conditions for a more just world order.”

The four countries produce about 15 percent of the world’s gross domestic product and hold about 40 percent of the gold and hard currency reserves, but they are not a unified bloc and do not do enough business among themselves to justify a trade alliance.

Russia and Brazil export natural resources, China exports manufactured goods and India bases its growth primarily on domestic demand. As such, India is not as concerned with the status of the dollar and is by no means as intent on scoring ideological points against the United States as is Russia.

Actually, the fact that these countries have been roped together in the BRIC is the least of their areas of common interest. In addition to being the most successful among the world's emerging economies, the BRIC are also among the world's most populous; China, India, and Brazil rank 1st, 2nd, and 5th, I believe. All are the dominant powers in their regions. All but India are at least quasi-socialist in their governance, with India having only recently moved away from the sway of socialism. And for all the talk of emerging middle classes in each country, the reality is that each of the BRIC countries has teeming masses of very poor people, with a small population of wealthy folks on top.

Still, it's not as if this is some ideologically cohesive group. Mostly what they are interested in is business, not politics.

Mr. Medvedev encouraged China, the world’s largest holder of dollar reserves, and other nations to put their money in some other currency or financial mechanism. He also urged members of the Shanghai Cooperation Organization to use their national currencies in conducting bilateral trade.

“There can be no successful currency system, and particularly a global system, if the financial instruments that are used are denominated in only one currency,” Mr. Medvedev said. “Today, this is the case and the currency is the dollar.”

The question of what sort of currency should be used in global trade is an interesting one, and is very much up in the air at this point. Short of a war or catostrophic economic collapse, it's hard to imagine that this will be the vehicle for a change in global finance.

No Matter What the Crisis Is

You may recall, back in the dimly recalled days of yesteryear - May 2009, to be exact - when Californians voted down 5 propositions designed to balance the state budget by raising taxes. Ever since that long-ago vote, the state has been in "crisis" with the governator and state reps trying, once again to reach a compromise that would allow the state to avoid default. State Democrats, who dominate the Legislature and who are admittedly the default political party for a majority of voters have come up with a brilliant idea: raise taxes and don't cut spending! Um, didn't we already reject this? Califiornia Lawmakers Ready To Battle Over Taxes

Democratic lawmakers proposed raising taxes on tobacco and oil companies and refused to cut state worker pay as a key budget committee finished its plan Tuesday to solve the state's $24.3 billion deficit.

The new taxes would include:

-- A 9.9 percent tax on companies that extract oil from California, something the governor proposed last December, though he has now taken a hard line against any taxes.

-- An increase from 87 cents to $2.37 on a pack of cigarettes. Other tobacco products would also see an increase.

-- Reversing two corporate tax breaks included in the deal last September that ended the stalemate over the 2008-09 budget.

The taxes are in addition to a $15 increase in the vehicle license fee that lawmakers proposed Monday to keep open 219 state parks that would close under the governor's plan, which the committee revised.

Unreal. The state unemployment rate is in double digits. There are record foreclosures throughout the state (esp. in the south). CA citizens are downsizing their lives to cope with their new economic realities. Yet, the dominant party in the state government cannot bring itself to cut state spending. Strike that. They are always willing to cut spending for public services, first responders, and prisons. But, God forbid state employees experience a cut in their pay (I am assuming a well-deserved downsizing in state employment rolls is simply not worthy of discussion).

CA will lurch from crisis to crisis until the tax-and-spenders are driven from office. But, it's hard to believe that would happen anytime soon. The sad truth is the state's default position is left-liberal. This is partly due to a sympathetic media environment that always trumpets the "Intransigent GOP = Cuts for Kindergartners" story-line. But it is mostly due to the voters themselves, who never fail to support feel-good measures, regardless of their cost, and allow themselves to be rolled by fear stories about empty firehouses, when the real money is going to gold-plated pensions and salaries for state employees.

Until this dynamic is ended. it won't matter what the crisis is: the solution will always be the same.

Car 54

SF's Board of Supervisors are responding to the Mayor's "draconian" health services cuts by proposing deep cuts to the police and fire departments. Makes sense!

The board is threatening to slash fire and police budgets to make up for deep cuts to health and human services, and today it will debate a resolution calling for charges to be dropped against seven men accused of killing a police officer nearly 40 years go.


Last week, board budget committee members expressed anger at Newsom for slashing support from the city's general spending account to the Recreation and Park Department and the Department of Public Health by more than 20 percent, while proposing 5 to 6 percent increases to the fire, police and sheriff's departments. So the committee voted to move $82 million from the public safety agencies' budgets to health, recreation and human services departments in the interim budget.

Proponents of this move claim that cutting police and fire budgets will actually improve public health:
(John) Avalos and other liberal supervisors argue that protecting public safety also means saving health services, violence prevention programs and recreation options.

You bet, John! Midnight basketball will keep us safe!

No progressive would ever admit to being anti-cop or anti-public safety. Yet, they are consistent in attacking the police and fire departments (and, on the federal level, the military), whether through budget cuts, "watchdogs," harassing lawsuits, and civil rights for criminals. And then, when public safety inevitably suffers, these same progressives are first in line to blame the police for their shortcomings.

Not only that, they literally don't understand the relationship between a strong police force and the safety of everyone in the City. Often the police do their jobs simply by standing around, "showing the flag," if you will. Progressives hate paying for that. They would much rather fund a dozen "health services." Never mind whether such services are actually being used. No matter whether they are duplicative of other services provided by the state or the feds. Who cares whether the services are actually doing any good.The point is to create dependence on the government, so the dependants will be in thrall to the dispensors of "services." The police and fire department don't stand a chance in the face of those sorts of incentives.

Whether they intend to or not, the ceaseless attempts to cut public safety funds reveal one of the unspoken political divides not just in SF, but also in the US. The progressive wishes to maintain power by creating a class of voters dependent on "services." The conservative tries to govern to provide services that are useful to all, and let individuals take care of those things (like health care) that are better left to the individual than to the government.

How Will the Wolf Survive?

The FBI has looked at the recent spate of domestic terrorism and concluded that they need to do a better job tracking the dreaded "lone wolf:" FBI to Target Lone Extremists

The recent killings of a U.S. Holocaust Memorial Museum guard and a Kansas abortion doctor came a few months after the Federal Bureau of Investigation stepped up efforts to pre-empt violence committed by just such political extremists working alone.

"Lone-wolf offenders continue to be of great concern to law enforcement," the agency said in a February memo reviewed by The Wall Street Journal. The FBI is "trying to identify a potential lone wolf before he or she would act out violently," Michael Ward, the bureau's deputy assistant director for counterterrorism, said in an interview earlier this year.

The lone-wolf initiative is one element of a broader strategy to fight domestic terrorism, dubbed "Operation Vigilant Eagle," launched late last year in response to what the memo identified as "an increase in recruitment, threatening communications, and weapons procurement by white supremacy extremist and militia/sovereign citizen extremist groups."

It's Eagles versus Wolves in a bloody war of tooth and claw for the fate of a nation!

Of course, in the past, law enforcement has not displayed any sense of what to do with information about dangerous people, whether lone wolves or part of a larger group. From the 9/11 hijackers to John Muhammed to the Columbine killers to Lee Harvey Oswald himself, law enforcement has often been aware of psycopaths, but that knowledge proved useless in predicting when the wolf would strike. In fact, the FBI seemed to have the Holocost Museum killer on their radar.

The memo, and the recent killings, also show the limits of the lone-wolf effort. Both James von Brunn, who is charged with the Holocaust Museum shooting, and Scott Roeder, the man arrested in the murder of George Tiller in Kansas, had openly expressed to associates and on Web sites their extremist views, on anti-Semitism in Mr. von Brunn's case and on abortion in the case of Mr. Roeder. The FBI, in fact, was aware of Mr. von Brunn because of the postings but wasn't tracking him.

Really, if the FBI wants to find lone wolves, they should look in singles bars. It is my understanding that women are attracted to Bad Boys who Play by Their Own Rules and emit the musky charisma of the Lone Wolf.

On a slightly more serious note, I imagine "Operation Vigilent Eagle" will turn into yet another FBI distraction as G-men visit the flophouses and basements where real extremists - the losers writing screeds on the internet, but who would never actually shoot anyone - live. Meanwhile, the real dangers will be hiding in plain sight, waiting to strike.

St. Andrew Lays Down the New Rules

I wasn't going to write about the Sarah Palin - David Letterman war, but this post by Andrew Sullivan that just popped up on my "Sarah Palin" Google Alert was so stupid, dumb, and retarded - "Stumbtarded," if you will - that I had to comment:

It's getting worse. This is a classic:

"The Palins have no intention of providing a ratings boost for David Letterman by appearing on his show. Plus, it would be wise to keep Willow away from David Letterman," PalinPAC spokeswoman Meghan Stapleton said Wednesday.

So Letterman is a child abuser for making a tasteless joke? But the surrealism and narcissism of the Wasilla nutcase is what stands out:

"First, remember in the campaign, Barack Obama said, 'Family's off limits. You don't talk about my family.' "And the candidate who must be obeyed, everybody adhered to that and they did leave his family alone. They haven't done that on the other side of the ticket and it has continued to this day so that's a political double standard."

So brandishing a special needs infant as a campaign prop was putting your family off-limits? Pushing your own daughter into the klieglights to divert attention from your own fantastic lies is family-protective? Pushing Bristol Palin into an absurd abstinence campaign to gin up support from the Christianist right is looking after your kids? Palin reaps what she sows. And she clings to any whisp of victimhood like the attention-starved celebreality star she really is

First off, I would like to see Sullivan walk up to Todd Palin at a bar and say that to his face. He won't, of course. He's a whiny ninny who doesn't understand one of the basic rules of manhood: i.e. speak your mind, but don't act surprised when you get your a** kicked. Most progressive "men" are like that. That's why they hide their cowardice under a veneer of hip liberalism. Oh, I forgot, Sullivan is a "conservative." Impossible. True conservatives would never write about Gov. Palin, or any GOP politician in the manner Sullivan does (and, as long as we're being hostile and judgmental, Sullivan shows himself to be an almost comically stereotypical prickly, emotional gay man who is irrationally hostile towards women).

More important, nothing Sullivan has written on this matter makes any sense.

1. "It's getting worse." It is?! Palin's coming out of this looking re-energized and righteous, while Letterman and his apologists are acting quite defensive and out of sorts. Their Solomonic attempt to explicate his "joke" so as to make it look like it referred to the 18-year old in Alaska, rather than the 14-year old who was at the freakin' game (!) are worthy of a sleazy defense attorney with mobsters as clients

2. "So Letterman is a child abuser for making a tasteless joke." Um, I read the statement Sullivan quotes more than once and saw no reference to child abuse. Calm down, Andrew. You're projecting again. No one's calling you a child abuser.

3. "So brandishing a special needs infant as a campaign prop was putting your family off-limits?" Uh, Andrew, Gov. Palin had a baby. The baby, as you know, is a member of her family. News flash: all politicians bring their families to campaign events. Does this really need an explanation? I seem to recall Chelsea Clinton showing up on stage with her parents back in the Nineties. I also seem to recall that she was "off-limits" at the time. Indeed, she has been "off limits" even as a young adult. That almost sounds like a double standard. Or maybe it's Gov. Palin's narcisism and surrealism.

4. "Pushing your own daughter into the klieglights to divert attention from your own fantastic lies is family-protective?" What???? Which daughter is being used to distract from Gov. Palin's 'fantastic lies?' What lies? What makes them fantastic? I'm afraid Andrew is heading out into the tall grass on this one.

5. "Pushing Bristol Palin into an absurd abstinence campaign to gin up support from the Christianist right is looking after your kids." At this point, I would imagine Sullivan's voice is rising in pitch. Why Bristol Palin's abstinence advocacy has given rise to these sorts of hysterics is beyond me. As if no ex-gangbanger ever went around trying to keep kids off the streets. As if no former drug addict ever wrote about his experiences to set an example of what not to do. As if no former alcoholic ever founded AA to help his fellow sufferes kick their destructive habits. Jesus, Andrew, haven't you ever heard of the Fall and Redemption? It's a pretty basic human story and one that many people relate to. Nice use of the insulting phrase "Christianist," by the way. All true conservatives talk about the dangers of "Christianists."

6. "Palin reaps what she sows." Oooo. A biblical allusion. Must be a conservative!

7. "And she clings to any whisp of victimhood like the attention-starved celebreality star she really is" Gov. Palin was in NY for three things: to visit little Auburn, NY, which has an Alaska connection (and where she was joined by a crowd of 20,000); to attend an autism fundraiser; and to go to a Yankees game. Oddly, only the Yankees game seems to have attracted any interest. Gov. Palin is also (you might want to sit down, Andrew) the Governor of Alaska. Do you know what governors do? They make public appearances! Really, I'm not joking! As for clinging to her "whisp of victimhood," I'd say what she is doing is pushing back against the media attacks against her and her children in a manner that is sadly uncommon among GOP ranks. Maybe that's what offends you so.

Plutarch's Lives: Aemilius Paulus

Plutarch is effusive in his praise of Aemilius Paulus, comparing him favorably with the great Timoleon. Reading about Aemilius, it is hard to see what Plutarch is so excited about. He did not resolve any great controversies. He made no great speeches. His personality does not shine through as do others in Plutarch's Lives. However, Aemilus' achievements on the battlefield were great. He won wars in Spain and in the Alps. Most important, he led the Roman conquest of Macedonia, which solidified Rome's status as the Great Power of the ancient world (and gave it access to the wealth of Greece). Clearly, this is what excited Plutarch's admiration, but Aemilius did not win this war so much as he successfully exploited the many mistakes of his adversaries. Really, Aemilius' greatness lay not in himself, but what he represented: the Roman Republic (not the Empire!) during its rise to glory, when it was as much a liberator as it was a conqueror. In fact, Plutarch spends as much time describing Roman military tactics, and Roman social customs (especially that of the Triumph) as he does describing Aemilius' life.

Aemilius was born into a family that claimed to be decended from Pythagoras. One of his ancestors was Lucius Paulus, probably the only Roman who emerged from the Battle of Canae with his reputation intact. Aemilius' father was Scipio the Great. With such a family heritage, Aemilius was destined for some sort of leadership role in Roman life. He entered public life as an aedile. Soon after, he also became an augur, a priest expert in the interpretation of migratory birds. As was discussed in the life of Numa, Roman religion was as much a science as it was a matter of faith, and Aemilius took his religious studies very seriously. All the while, he was also rising through the ranks of the Roman army where he took to the discipline and rigor of army life as much as he took to the austerity of the priestly life.

Aemilius married twice, in the meantime. With his first wife he had two sons who continued the family's run of greatness: Scipio the Younger and Fabius Maximus. When Aemilius divorced their mother they were both adopted into other noble families (Scipio by Scipio Africanus, of course). Aemilius had more children with his second wife, but none were as accomplished as the sons he gave up for adoption.

Aemilius made his reputation as a military leader during a war in Spain. At that time, the Romans were fighting a larger war in Syria against Antiochus the Great when barbarians (Gauls, I assume) invaded Spain and quickly conquered it. Aemilius fought two battles against the invaders, defeating them both times and killing 30,000. According to Plutarch, the Spanish were so greatful, they willingly swore oaths of peace and fidelity to Rome, thus becoming a province of Rome.

Aemilius next fought and won a war against the Ligurians, an Alpine people who lived in the northermost parts of Italy. The Romans had fought wars against the Ligurians in the past, but had always left their cities and fortifications intact because their location and war-like nature made them a good buffer between the barbarians to the north and the Roman lands to the south. This time, things ended differently. Although outnumbered 5 to 1, Aemilius defeated the Ligurians in battle. Either through this defeat or through Aemilius' skillful diplomacy, the Ligurians seemed to have realized that the days of fighting the Romans as equals were coming to an end. They delivered their navy and fortifications to the Romans for destruction and swore oaths of loyalty to the Romans.

Despite these triumphs, Aemilius' career went into temporary eclipse. Although he stood for consul, he was not successful. He retreated to his religious studies and dedicated himself to the education of his children. Aemilius came back to public life after the Romans had fought a long war against the Macedonian king Perseus. Macedon was, of course, not the same nation it had been under Philip and Alexander. In fact, the Romans had routed Perseus' father in battle and freed much of Greece from Macedon's grip. Still, Macedon remained a wealthy nation with a large military and proud heritage. Perseus was hardly an admirable figure. He was mercurical and craven. While known as a warrior, he was not particularly resolute in battle. Nonetheless he had defeated three Roman armies sent to conquor Macedonia. This threw Rome into temporary disarray, as the generals Perseus had defeated were veterans who had fought and won wars against much tougher oppoenents such as Antiochus. They finally selected Aemilius to lead a final push against Perseus.

Aemilius sailed to Macedon and quickly established a beachhead under Mount Olympus. He found the Macedonian army both well prepared and in disarray. Perseus had spared no expense in equipping his men and horses. He had also made extravagent promises to some of the mercenaries he had hired. As the Romans approached, however, Perseus began looking to his pocketbook, rather than his logistics. He stopped paying some of his more expensive (and best) soldiers, who quickly abandoned him. As Plutarch pointed out, this was an immensely stupid move, as the money Perseus "saved" was a trifle compared to the vastness of his actual wealth. The result was a weak Macedonian army, and a treasury that was preserved, not for Perseus, but for the Romans.

After some preliminary maneuvering, the Romans and Macedonians met at Pydna for their final confrontation. At this point, the Macedonians had already lost a couple of minor battles (one of which was lost when the Romans surprised a sleeping Macedonian divison). These setbacks had rattled Perseus, who virtually lost all hope in victory. Still, he had many advantages. For one thing the battleground he had chosen was perfect for the phalanx, the Macedonians preferred method of fighting. The Macedonians would have the advantage in numbers. They also had the advantage in the lay of the land, which featured two rivers that could be used to trap the Romans. And, the macedonians had the advantage of desperation; they were fighting to protect their homes and families. Plutarch writes that, when Aemilius and his army marched up to meet the Macedonians, they paused to admire and contemplate the Macedonian battle array.

The battle began with the Macedonian phalanx holding the Romans at bay. There was controvesy in the ancient world regarding the question of Perseus' role in the battle. Many stated that he had fled the battlefield before the battle was joined. Others said he was off the field after falling off his horse. Perseus seems to have claimed that he was late to the field because he had paused too long while making an offering to the gods. Regardless, it is clear that - on the day that macedon's fate was decided - its king was nowhere to be found. Aemilius, meanwhile, directed the Roman attack himself. sensing the weaknesses in the phalanx and sending his men in to make pinpoint attacks that eventually broke the Macedonians' line and led to the swift and bloody end of the battle and of the Macedon kingdom that had once conquered the known world.

Perseus fled, naturally, along with his family, his treasury, and a band of Cretan soldiers who were protecting their interest in the treasure more than they were protecting Perseus. Eventually, the Cretans fled with Perseus most valuable possessions, including items that had belonged to Alexander the Great. Desperate, Perseus struck a bargain with a Cretan ship's captain for transport out of Macedon. The Cretan took Perseus' remaining valuables and then sailed without the king. At this point, Perseus gave up and surrendered to Aemilius. He caused such a scene with his begging and lamentation that Aemilius grew annoyed, thinking the display of cowardness would reflect badly on his victory.

Aemilius thus returned to Rome in triumph. Macedon and Greece were now firmly in the Roman orbit, having pledged to obey Roman law and pay Roman taxes. Plutarch writes that the wealth that was realized from this conquest was so great that Roman citizens did not have to pay taxes until the time of the first war between Caesar and Antony. After a lifetime of service to Rome, Aemilius was granted the honor of a Triumph, an event that Plutarch describes in loving detail (actually, his description of Perseus' children, who had to march in the Triumph and who were destined for a life of slavery, is a rare look at the fate of those whom Rome conquered).

Having won his war and had his Triumph, Aemilius had earned his place in Roman history. Plutarch states that Aemilius remained in Roman politics, where he maintained the affection of the common people, even as he always sided with the nobles' positions on the issues of the day. His son Scipio, on the other hand, tended to make populist plays for favor, which caused Aemilius a certain amount of annoyance. While thus engaged, he came down with terminal illness that finally killed him after lingering for several months. He was buried with much pomp, with his funeral bier borne by Spaniards, Ligurians, and Macedonians who had never forgotten his forbearance when he conquered their lands.

Sharks v Jets

John Yoo's biggest mistake was not writing some of the "torture memos," or working for the Bush Administration, or defending himself in print and on TV. No, his biggest mistake was moving to Berkeley to teach at Boalt after he left the Justice Department. Living in the Bay Area has not just made him an easy target of local protesters; it has also made him subject to the jurisdiction in the local federal court, part of the notoriously left-wing 9th Circuit. Lawsuits that would be dismissed anywhere else are given a respectful hearing here. Now, Yoo is being sued by Jose Padilla for writing the memos that led to his alleged ill-treatment behind bars. And, a local federal judge has overruled Yoo's demurrer and will allow the case to go forward: Judge: Ex-Bush Lawyer Can Be Sued Over Torture

A prisoner who says he was tortured while being held for nearly four years as a suspected terrorist can sue former Bush administration lawyer John Yoo for coming up with the legal theories that justified his alleged treatment, a federal judge in San Francisco ruled Friday.

U.S. District Judge Jeffrey White's decision marks the first time a government lawyer has been held potentially responsible for the abuse of detainees.

"Like any other government official, government lawyers are responsible for the foreseeable consequences of their conduct," White said in refusing to dismiss Jose Padilla's lawsuit against Yoo.

If Padilla, now serving a 17-year prison sentence on terrorism charges, can prove his allegations, he can show that Yoo "set in motion a series of events that resulted in the deprivation of Padilla's constitutional rights," White said.

Reading the above article, it is clear that the reporter either hasn't read the complaint, or doesn't want the reader to know what's in it. It's not as if the complaint is hard to find. In fact, here it is.

It's a litany of the usual complaints about the Dark Night of Fascism under Bushitler, and could just as easily been drafted by Seymour Hersh. Padilla was arrested for no reason and subjected to detention and mistreatment, including the dreaded "forced grooming." Wah Wah. Some big names are mentioned here: Ashcroft, Gonzalez, Goldsmith; so are the officers who ran the brig where Padilla was held. But, Yoo is the only defendant, no doubt because his location makes him subject to the jurisdiction of the 9th Circuit, while Ashcroft, et al. live in circuits where the judge's don't carry the reputation of endorsing this sort of harassing litigation. Yoo's role in this parade of horribles? He wrote memos that created the atmosphere that led to Padilla's detention. Ah yes, "atmosphere creation!" Why, he practically held the cattle prod himself! You would think there would be enough causation problems, not to mention sovereign immunity problems, that would be an insurmountable obstacle to this sort of thing, but when the target is a Bush-era attorney, the normal rules do not apply.

Padilla, I should note, is not asking for big $$. He wants his attorney's fees paid, nominal damages of $1, and, oh yeah, a declaration that the acts alleged in the complaint were unlawful and unconstitutional. Padilla, then, is just as much a vehicle for his attorneys' (who run some "human rights institute" at Yale) thirst for glory/revenge as Yoo. But, as long as there's a front-page headline containing the words "Bush" and "torture," it's all good, right?

Barry, You Can Drive My Car

Robert Farago, who blogs over at the excellent Truth About Cars, has hit the bigtime (for a blogger) with an op-ed in the W$J about the prospects of political influence at GM. Farago is a voice worth listening to since, unlike all of the stakeholders at GM and the pros in the business world, he was calling BS on GM's self-reform years ago; and, starting in 2007, declared loudly and lengthily that GM would go bankrupt: Washington Can't Be 'Hands-Off' With GM

Many commentators worry that this new, nationalized GM will answer to politicians rather than profit and loss. They fear that this could lead to a $100 billion quagmire. Their fears are not without reason.

GM's post Chapter 11 decision to continue developing the Chevrolet Volt, its technologically dubious plug-in hybrid, is Exhibit A. The Volt is the same experimental vehicle that the president's automotive task force excoriated in its analysis of GM's federally mandated turnaround plan. The hybrid's survival shows that the company's new political taskmasters are ready, willing and (now) able to put green dreams ahead of commercial reality.

But there's a far greater danger to taxpayer interests than a plethora of unloved, environmentally-friendly cars: GM itself.

GM's management caused its failure. Its corporate culture lacks anything even remotely resembling accountability. Many of the same people who drove the company into the dirt are running the company now on the federal government's dime, continuing their failed death-by-downsizing turnaround plan.

Moving forward, the auto task force will either leave GM's sclerotic corporate culture intact -- as it is currently doing by allowing Mr. Wagoner's hand-picked successor, Fritz Henderson, to run the show -- or it won't.

What is striking about GM is how it is such a fundamentally lazy company. From the guys reading newspapers at the Jobs Bank to the folk wisdom that you should avoid buying GM cars made during hunting season to the executives who did nothing beyond half-measures to remedy GM's many ills until it was too late (and then ran to the gov't, rather than take drastic measures on their own), GM's corporate culture was one in which work-avoidance was many people's daily goal. Oh, I'm sure they kept BUSY. On certain summer days, they may have even broken a sweat. And, even at its lowest point, GM was still generating tremendous amounts of cash (I believe it was #7 in the Fortune 500 last year). It's just that it was burning cash at a much higher rate, and no one seemed willing to put out the fire.

It's not enough to blame the union's unreasonable pay structure, work rules, and retirement benefits. There are plenty of unionized manufacturers in the United States (Boeing being the most obvious) that still manage to remain competitive and innovative despite an equally obstreperous union. GM's management simply lacked the will and the energy to confront the UAW when it counted.

I don't approve of the gov't/UAW takeover of GM. I certainly don't approve of Congressmen raising a stink over the closing of plants in their districts (what are they, military bases?). But, if the gov't really is going to own GM, then let's at least try to cure its dysfunctional corporate culture. Move GM out of Detroit. Change the work rules. Make it easier to fire bad employees. Something! Sadly, I think that it the last thing the gov't is willing to do.

Church & Stupid

Leave it to the Japanese to create a tax-dodge so elaborate it dwarfs anything that America's creative accountants ever came up with. I read through this article twice, and still don't understand exactly what was going on. It doesn't help that the journalists telling this story essentially tell it backwards: Religious Group Hid Love Hotel Income

A religious corporation that operates "love hotels" concealed 1.4 billion yen in income over seven years through February 2008 as tax-exempt donations from amorous couples, sources said.

The Kanto-Shinetsu Regional Taxation Bureau has ordered Uchu Shinri Gakkai (Space truth academic society) to pay 300 million yen in back taxes and penalties.

Uchu Shinri Gakkai, based in Tadotsu, Kagawa Prefecture, has filed an objection to the order.

"We actually send money to needy children in the country. We'll fight the tax authorities," said the 46-year-old president of a company in Chikuma, Nagano Prefecture, that processes and sells mushrooms and vegetables.

The love hotels are apparently run by a 71-year-old former president of the company.

Uchu Shinri Gakkai appears to be a religious organization in name only. The vegetable company apparently used the name of Uchu Shinri Gakkai to win tax breaks offered to religious groups, including tax exemptions on donations.

So what we have here is a vegetable processor set up its own religion (the Space Truth Academic Society) to obtain tax exemptions, and then used their religious status to operate a couple dozen "love hotels." And then hid the income from the hotels. I ask you, are there any "Benedict Arnold CEO's" in the United States who would come up with such a daffily elaborate scam?

The best part: the reporters are focusing on the propriety of the "religious group" hiding donations, rather than the propriety of an agricultural concern concocting a fake religion to operate a sexy side business.

There is a "Right" Way To Go to the Library, and There is a "Wrong" Way

Is it too soon to declare a Democratic War on Knowledge? Probe of Google Book Deal Heats Up

The Justice Department has sent formal demands to Google Inc. and publishers for information about a deal that would allow the search giant to make millions of books available online, publishing company executives and people briefed on the matter said Tuesday.

The civil investigative demands, or CIDs, are the strongest sign yet that the Justice Department may seek to block or force a renegotiation of the settlement, which was struck last year and has not yet been approved in court. It's also an indication of the more intense antitrust scrutiny promised by the Obama administration.

Yeah, why would you want to have the contents of the world's libraries accessible through your computer? If there's one thing I hope the people at Google (and any other tech firm) learn, it's this: once your company becomes a success, you might as well re-register as a Republican. Democrats (1) hate successful businesses (2) don't understand innovation and (3) think they are protecting the "little guy" - or businesses that are losing in the marketplace; it's hard to remember which is which. Either way, a Democratic administration always means expensive and disruptive anti-trust actions.

I've said this before, but, if this was a government initiative, there would be enough self-congratulatory speeches to heat every home in the Northeast this winter. But, since it's a (ugh) publicly traded company doing this, it's suspect.

On the Barbie

News out of SF is usually dominated by the City's silly progressives that it's easy to forget that there is just as much silliness in SF's ethnic neighborhoods. In Chinatown, some are upset that a one-time gangster - the immortal "Shrimp Boy" - is muscling in on the Chinatown farmer's market: Change In Chinatown Market Under City Scrutiny

A notorious former gangster has taken over a Chinatown street market that is financed by San Francisco taxpayers, a development that has set off alarm bells at City Hall.

Raymond "Shrimp Boy" Chow - who was once sentenced to 25 years in prison on gun charges but says he's gone legit - was named manager of the Chinatown Night Market on Friday by the Chinatown Neighborhood Association, a group with close City Hall ties.

The potential embarrassment of Chow's involvement, we're told, prompted a contentious closed-door debate about the city's $35,000 grant to the program - with Board of Supervisors President David Chiu cautioning against the deal, Mayor Gavin Newsom's staff largely noncommittal, and Planning Commissioner Bill Lee arguing to move ahead.

In all the drama over Democrats v GOP, liberal v conservative, etc v et al., it's refreshing to see someone getting involved in politics for some good old fashioned corruption and graft. Shrimp Boy, you will be surprised to know, used intimidation tactics against his rivals. He is also a suspect in the unsolved murder of a Chinatown merchant three years ago. Shrimp Boy denies all.
"Under this kind of monitoring," he said, referring to a tracking ankle bracelet that authorities still require him to wear, "do you think anyone with common sense would do anything stupid?"

Case Closed!

In the Small World file (and just to show that Shrimp Boy knows where the action is in politics): he and Norman Hsu had some dealings years ago: Hsu And The Shrimp Boy. You should read the whole thing.

Teacher, Teacher

Tyler Cowan gives us his 10-point summary of a talk he gave to college administrators: My Talk To University Administrators. All are worth reading, but there are some I'd like to highlight:

3. Community colleges are in many cases turning out to be stronger competitors than are for-profits.

Commuity colleges are serving the perpetually underserved in the higher education world: people with ability, but who lack the $$ or the time to go to "regular" college. They should be encouraged, but instead are often first on the chopping block.

4. The higher education bubble has burst. The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.

Amen. Really the problem is not the bursting of the bubble, but the obvious diminishing returns that a college degree is delivering. Not sure why Cowan is focusing on public sector universities. The private ones are outrageously expensive and, with the exception of the Ivies, deliver undifferentiated results. At this point, I would pay for my kid to go to UC, and no more. No way I would pay $50,000 to send her to, say, Davidson.

7. The way to be fiscally responsible is to refuse luxury projects in good times. If bad times have come it is already too late.

That's advice that works anywhere, but not in the world of higher education, apparently. Baby steps.

Yes, Virginia, There Is a Santa Claus

I used to live in Virginia and, while I still follow the Redskins, I never could take much interest in VA politics. However, I did know enough about the race for the Democractic nomination for governor to know one thing: I wanted Terry McAuliffe to lose. Badly. Well, VA did not let me down: Deeds Wins Democratic Primary for VA Governor

State Sen. R. Creigh Deeds dominated Virginia's three-way Democratic primary for governor Tuesday, defeating a much better financed Clinton White House insider and a former legislative colleague.

Deeds took nearly 50 percent of the vote to 26 percent for Terry R. McAuliffe and nearly 24 percent for Brian J. Moran, unofficial totals showed. Nearly 320,000 people voted in the race, about 6 percent of the state's 5 million registered voters but more than officials predicted. Deeds piled up surprisingly large margins across the state, including in the Washington, D.C. suburbs of northern Virginia that his opponents call home.

50 - 26 is not a loss. That is Pickett's charge, Burnside at Fredricksburg, and Grant at cold Harbor all rolled into one. And it couldn't have happened to a nicer guy. McAuliffe is one of the worst people in American politics; a fast talking (you could almost call it jive) Dollar-crat who loves to lament "inequality" while raking in millions from shady stock transactions from the business world's dregs, such as Global Crossing. It's hard to know what he hoped to accomplish with this quixotic run, but having lost this badly we can only hope he will bow out gracefully (pffff!) from public life

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