Quote of the Day

"Pundits talk about 'populist rage' as a way to trivialize the anger and fear coursing through the middle class. But they have it wrong. Families understand with crystalline clarity that the rules they have played by are not the same rules that govern Wall Street."

-- Elizabeth Warren, the Leo Gottlieb Professor of Law at Harvard and the Chair of the Congressional Oversight Panel.

The quote is from an article she wrote, America Without a Middle Class, in the Huffington Post, December 3, 2009.

Who Wins?

A chain-email proclaiming that Obama has created a program to give welfare recipients free cell phones and up to 70 free minutes per month hit my inbox this evening. Whenever something which arrives by email seems unbelievable, it's best to check it out at snopes.com [http://www.snopes.com/politics/taxes/cellphone.asp].

Whereas there is some truth to the free phone claim, the email deliberately paints a distorted and incomplete picture of the program for the sole purpose of fomenting vitriol and riling up partisan, knee-jerk reactions. The legislation which established the decried phone assistance was passed long before Obama took office, and it's not specifically for welfare recipients. For example, Medicaid recipients also qualify.

Government largess and profligacy, whether at the hands of the liberals or conservatives (yes, each side tries to reward their constituency), fails the sniff test on its own and doesn't need half-truths and embellishments to reveal it as half-baked pork. It proclaims itself as such quite well without any help.

Distortions only play into the hands of the political opponents, as they can rightly point out the game-playing by the other side in an attempt to garner political capital. Those ploys never work - for either side. They only cause polarization and an unwillingness to have candid discussions or pursue bi-partisan solutions. Such shenanigans as seen in this disingenuous email guarantee that political dialog will degenerate into name-calling and he-said-she-said bickering.

When you can answer the question, "Who benefits by polarizing the right and the left so that they will never come together to work out real solutions?" then you will know who really is behind such ploys as this email. It wasn't written on behalf of conservatives or republicans. Nor was it written by a liberal or a democrat. The public is being manipulated to ensure that those in power behind the scenes stay in power, and that those with mega-wealth will always control the politics (and the wealth) of the republic. There is only one way to beat them at their game, and that is, don't play the game.

"The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics." -Thomas Sowell

If We Knew the Truth, The Economy Would Collapse!

There is an interesting battle taking place between the Federal Reserve Board of Governors (The Fed), and a New York District Court judge. Bloomberg LP (which owns the Bloomberg Financial News Service) has filed a lawsuit against The Fed under provisions of the Freedom of Information Act. This lawsuit, if successful, would require The Fed to release documents that contain the names of the banks which have received financial aid from The Fed during the current economic crisis, as well as the amount of aid they have received.

A simple, straight-forward request

It would seem to be a straight-forward request and it is hard to imagine a compelling reason why The Fed should not comply with this request. The Fed, however, is adamant that they will not release such documents. This is, perhaps, not surprising. But what is surprising is their most recent argument presented to the judge. As reported at Bloomberg.com today:

The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”

The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well.

It's that last sentence which is incredible! The Fed is basically saying that if the public knew the truth about what they have been doing with taxpayer money behind the scenes, "significant harm could befall the economy!"

If that statement doesn't cause immediate panic, then the American public is sleepwalking! Their argument as to why they shouldn't release the documents presents a very compelling reason why they should!

Methinks they doth protest too much!

After that declaration, there is little reason why the documents should remain secret. The damage they are trying to prevent (to the economy, to their reputation, etc.) may have already been ordained by their demands of secrecy.

Our economy has already been put in jeopardy by the mere fact that they have admitted that their actions, if made known to the public, would do "significant harm!" Now the public imagination is left to run wild with the possibilities. Could the truth be any more damging than the implications of their argument?

I harken back to my post of April 24, 2009 (Spin, a Double-Edged Sword) which now seems astutely prophetic. In it I wrote:

"It now appears that the stress test was merely a ploy to properly spin the financial condition of the 19 largest banks, so that the public won't panic, the economy won't crater further, and the government sycophants and their programs remain credible."

"Everyone will experience the consequences of his own acts. If his acts are right, he'll get good consequences; if they're not, he'll suffer for it." --Harry Browne

This Would Be Funny Except That...

It Hurts So Much!

It is becoming painfully obvious that, as I suggested in a previous post, there is a double standard in place which forces the hard-working citizens of this country to pay their taxes so that the wealthy scofflaws and indiscreet bureaucrats don't have to pay theirs.  Wall street tycoons can continue to get their high salaries and huge bonuses, and live high on the hog, by being carried on the backs of those of us with no connections and no special privileges.  

We simple folk, however, are not entirely left out.  We have been granted the privilege of paying exorbitant taxes to support the folly of banks and bankers so that they can receive a get-out-of-jail free card.  Doesn't that awareness just give you goosebumps?

Those miscreants are responsible for burying the world's economy through unethical and downright illegal practices, and are rewarded by bailouts and winks from their cohorts in Washington.  They know that the poor, powerless proletariat have no choice but to ante up.

Need Proof?

Kathleen Sebelius, Obama's pick for Secretary of Health is the latest example of this inequity.  She joins three other Obama nominees in a hall of shame for failure to pay income taxes.  This is becoming de rigeur and almost seems to be a prerequisite for entry into the federal government (a.k.a. The Washington Country Club).  

I thought that this type of thing was only found in street gangs.  Just as a young gang prospect has to  perform flagrant and incorrigible acts of violence to prove he is worthy of gang membership, perhaps there is a similar rite of passage for Washington insiders.  Only after having proven arrogant contempt for the laws of the land is one allowed to join the gang and enter the club.

For years I suspected that the game of Life, Liberty, and the Pursuit of Happiness was rigged in favor of the wealthy so that they could remain wealthy, and the middle class could remain faithfully committed to supporting their wealth.  That proposition is no longer just a suspicion.  It is quickly becoming a published protocol.

Out of Hardship is Born Opportunity!

All of this leads me to the idea that there might be an opportunity lurking here.  A couple of opportunities, actually.

First I would like to propose a simple way to eliminate the Federal budget deficit.  I believe that if the IRS were to audit all of the members of federal, state, and local governments, as well as all of the officers and board members of banks and Wall Street firms, they would uncover a windfall!  This would surely provide a sum of hidden monies substantial enough to pay off the deficit.

Save Your Applause, There's More!

Secondly, I see the opportunity for we simple folk to join the game.  If we all start cheating on our taxes, the magnitude of this peaceful demonstration would overwhelm the ability of the IRS to keep score.  That would surely help to establish a de facto egalitarian society.  We are, in fact, obligated to do this.  It is our patriotic duty to demonstrate our support for Washington and Wall Street by emulating their recommended best practices!  Rather than vote the bums out, we should all become bums!  Group hug anyone?

But Wait!  There's More!

It has been rumored that Timothy Geithner, who cheated on his taxes to the tune of $50,000.00, also was granted immunity from penalties and interest on those back-taxes.  This, if true, is a great precedent!  For those of you who try my second opportunity above, if you get caught, you, too, will have to be granted immunity from penalties and interest!  All you have to do is claim the Geithner Defense (a.k.a. the "What's good for the goose" defense).

Ok, now you can applaud!

Thank you, thank you.

The entire essence of America is the hope to first make money -- then make money with money -- then make lots of money with lots of money. -- Paul Erdman

Quote of the Day

“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again. But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America . . . [This] led to a bailout that was designed to try to get a lot of money to Wall Street, to share the largesse with other market participants, but that had deeply obvious flaws in that it put at risk the American taxpayer unnecessarily.” -Joseph E. Stiglitz, Nobel-winning economist at Columbia

Comment by Barry Ritholtz:

The assumption referenced by the Columbia Prof and Nobel winner, is that the unusually close relationship between Geithner when he was NY Fed President and the C-level execs of Wall Street’s giant financial institutions has put him in the mindset of Wall Street, and not the taxpayers. That was my very same argument about Larry Summers earlier this month.

Quote of the Day

"Capitalism without bankruptcy is like Christianity without hell." -- Elizabeth Warren, chair of the TARP Congressional Oversight Panel.

Watch Part 1 and Part 2 of an incredibly revealing, interesting, and entertaining interview of Elizabeth Warren on The Daily Show.

"Spin" - A Double-Edged Sword (that only cuts one way)

In the past twelve months, there have been many attempts by government officials and agencies to put just the right interpretation on events and actions such that we ignorant members of the populace will be properly influenced to hold "correct" opinions. From Paulson to Geithner to Bernanke, a common set of "rules of engagement" have been utilized to obfuscate by omission, and obscure by subterfuge (remember Bear Stearns? Lehman Brothers? Merrill Lynch? TARP?).

It seems, therefore, that these charlatans must be incredibly dull-witted or obstinately incorrigible to keep repeating the same mistakes. Spin rarely succeeds - it is almost always revealed for what it is - a dishonest attempt to divert attention away from the truth. To continue with the parade of spin, the charade of spin, when any astute sixth-grader can tell the difference between facts and wishful thinking, seems unbelievably absurd.

The problem with spin is that, though it often has a brief life span of credibility, it's viability is soon exhausted. When the embers of indisputable truths ignite the veil of deception, the spin and the spinner are left standing naked before their intended victims. Like the emperor's new clothes, the spin reveals far more than was intended.

When spin is discovered, it invariably produces precisely the opposite effect to that which spin-doctors desired. It always begs the question, "If they went to this much effort to cast this bad situation in a positive light, how much worse is it than we realized?" At this point the imagination goes wild with speculation of how incredibly horrible things must be.

The Federal Reserve's Banking Stress Test seems to be the latest well-spun deception. The methodology of the stress test was released in a white paper this afternoon. Already several bloggers have tried to find rigor and meaningful testing described in this document (which might actually help determine the viability of the banks) but have come up empty. It appears at first glance that the so-called "stress test" had very little stress and not much in the way of meaningful tests.

Based on this admittedly cursory analysis, it now appears that the stress test was merely a ploy to properly spin the financial condition of the 19 largest banks, so that the public won't panic, the economy won't crater further, and the government sycophants and their programs remain credible.

The actual results of the stress test will be released on May 4th. If the majority of the banks which underwent the testing are shown to be quite healthy, based on tests that an illiterate child could pass, I'm afraid that we are in for some very rough times ahead. The public knows when the court jesters are in control.

Thank God for the solitary voice of reason crying in the government's wilderness - Elizabeth Warren!

It is inaccurate to say that I hate everything. I am strongly in favor of common sense, common honesty, and common decency. This makes me forever ineligible for public office. -H. L. Mencken

Wall Street Bankers: Domestic Terrorists?

Ever since 911 our sense of safety and security have been forever altered. Since then, like a cat in a roomful of rocking chairs, we have been looking for all of the ways that al Qaeda could wreak havoc on our cities, our citizens, and our lifestyle. Little did we expect our economy and perhaps even our way of life would face a far greater threat from sources within our own borders, within our established institutions and sanctioned business practices.

Far more damage has been done to our economic infrastructure by CDS (credit default swaps) and MBS (mortgage-backed securities) than al Qaeda and the Taliban could have ever hoped to do with their terrorist tactics.

Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs. --Herbert Hoover

An Extraordinary Notice

We live in Internet time and are inundated with information which comes at us from many sources at all hours of the day. So perhaps we can be excused for developing a "news bite" focus on the world.

Yesterday's news is so passe. Our attention span is relegated to the current day, the current hour, the current minute. How can we be expected to maintain an awareness of something that happened months ago, touched our lives for a few days, and then seemingly went away.

Unfortunately for some, it didn't go away. A news brief that crossed my desk this afternoon poignantly reminded me of that.

As reported by News 8 Austin, March 2, 2009:

"A boil water advisory in effect since shortly after Hurricane Ike hit Bolivar Peninsula has been lifted as supply lines return service to normal.

A statement from the Bolivar Peninsula Special Utility District said customers are no longer required to boil water prior to consumption."

Yes, Hurricane Ike touched our minds and hearts last September, and for a few days we sent donations, we kept the victims in our prayers, and we gasped in amazement at the images which came from the Texas coast. And then we got back in our groove and moved on. We assumed that all that could be done was done, and that Galveston and the Bolivar Peninsula would soon be back to normal.

We were sadly wrong.

"Choice of attention - to pay attention to this and ignore that - is to the inner life what choice of action is to the outer. In both cases, a man is responsible for his choice and must accept the consequences, whatever they may be." --W. H. Auden

Is it as bad as all this?

"The idea of letting AIG (AIG) go, or Citi go -- I mean, come on. Does anyone know what happens if we do that? We will simply shut down as an economy. There will be lockdowns and lockouts and mass closings and mass unemployment and no credit for cars or for schools or for homes. There will simply be an economy run by the state. That's what it is. That's all. Nothing else. Is that what we want? It is hurtling toward what we are going to get." -- Jim Cramer, The Street, March 2, 2009

Two More Bank Failures This Week

The FDIC reports that two more banks failed this week - Security Savings Bank, Henderson, NV, and Heritage Community Bank, Glenwood, IL. That brings the total failures this year to 16. There were 25 bank failures in 2008. Looks like we are well on are way to surpassing that.

Mistakes, scandals, and failures no longer signal catastrophe. The crucial thing is that they be made credible, and that the public be made aware of the efforts being expended in that direction. The ''marketing'' immunity of governments is similar to that of the major brands of washing powder. --Jean Baudrillard

Are You Feeling Disenfranchised?

The economy continues to get worse. The headlines give little cause for optimism, let alone hope. Didn't President Obama get elected because his platform was one of reform and hope? Why, then, am I not able to conjure up any enthusiasm for his pledges and programs?

There is a rumbling in grass-root America and it is growing ever louder. Many American are feeling disenchanted, dispirited, and disenfranchised. In the early days of this economic crisis, there were a predictable few malcontents who blogged about an approaching Armageddon. but in the last couple of weeks, this has been echoed in the main-stream media. Reputable TV journalists have recently started talking about class warfare and insurrection with no hint of hyperbole and no wink of irony.

I did not vote for President Obama, but neither did I despair when he was elected. In fact, in the first few days of his presidency, I started to feel hopeful and optimistic. These feelings, however, are now starting to fade and appear to have been misplaced. Instead of bold new programs we are getting bigger doses of the same old ones. Instead of an inspired bi-partisan stimulus package which would turn the economy around and engender a new optimism, we have been treated to ill-conceived programs and uni-partisan pork.

Obama has squandered his hard-won mandate and surrendered his political capital to an out-of-control democratic congress and the Queen of Pork, Nancy Pelosi. It's very clear who really has the power in Washington, and it is not Obama!

A financial analyst whom I greatly respect and admire, Mitch "Mish" Shedlock, had a wonderful post on his blog this morning which perfectly captured the betrayal I have been feeling. He says everything that I could hope to say on the subject. Read, Dear Mr. President, With All Due Respect... for some critical insights.

"Oft expectation fails, and most oft there

Where most it promises; and oft it hits

Where hope is coldest, and despair most fits."

--William Shakespeare

Quote of the Day

"This too-big-to-fail problem has now become an even-bigger-to-fail problem as the current approach has lead weak banks to take over even weaker banks. Merging two zombie banks is like hav[ing] two drunks trying to help each other to stand up. " -- Nouriel Roubini in an article, It Is Time to Nationalize Insolvent Banking Systems

Where Are We Headed?

See if you can piece together the near-term future of the US economy based on the following recent headlines:

Plastic Is Fantastic - Visa and Mastercard benefit from consumers' lack of liquid funds during the recession.

Late Payments on Credit Cards Reach Record Levels - Growing signs of trouble in the credit card debt sector are documented in Fitch ratings’ latest monthly Credit Card Movers & Shakers report.

Prediction: Great Depression Ahead - Harry S. Dent Jr., author of the best-selling book The Great Depression Ahead, says gold and oil prices will rise as the economy and the stock market crash in the second half of 2009.

Jobs Contract 13th Straight Month; Unemployment Rate Soars to 7.6% - This morning, the Bureau of Labor Statistics (BLS) released the January Employment Report. Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent...

‘Real’ unemployment rate hits a record 13.9% in January - The Big Picture (blog).

This Is Not Your Garden-Variety Downturn - If the recession now underway was a "normal" contraction, the near-term investment outlook might look quite a bit better.

Cumulative Job Losses: Getting Worse with Time - While they say things get better with time, the jobs picture is at least one exception.

Peter Schiff: Stimulus Bill Will Lead to "Unmitigated Disaster" - The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.

States Can't Afford To Pay Jobless Benefits - States are running out of cash to pay unemployment benefits.

Unemployed Workers Flood Calif. Job Centers - California furloughed more than 20,000 workers Friday in an effort to save the state money.

Three more bank closings brings this year's total to nine. - These three will cost FDIC $452M.

A White House official confirms talks are underway for more auto industry aid - A White House official confirms talks are underway for more auto industry aid...

He (Geithner) did say that some institutions are so frail that they would not survive - The Treasury Secretary told House Democrats the U.S. financial system is 'badly damaged,' adding, "It's clearly going to get worse..."

A growing number of states are running out of funds to pay unemployment benefits. - Seven are already borrowing money from Washington. Another 11 states could deplete their reserves by the end of the year.

Jobless Claims Soar To 626K, Factory Orders Plunge - It's a double shot of bad news today as jobless claims soar while factory orders sink.

"The government solution to a problem is usually as bad as the problem." -Milton Friedman

Double Standard

If you ever had any doubts about the popular claim that the US is not a democracy - rather more like an aristocracy - you have absolute proof this week. Two of Barack Obama's nominees for high-level administration positions have been caught cheating on their income taxes, and a third has withdrawn her name from consideration because she failed to pay employment taxes on household help.

The two tax cheats, Timothy Gethner, who has already been installed as Treasury Secretary, and Tom Daschle, who has been nominated for Secretary of Health and Human Services, did not just fudge a little bit on their tax returns. Geithner owed almost $50,000 and Daschle owed over $125,000! And both men apparently knew about their overdue tax obligations for many years!

Now what do you suppose would happen to you or me if we were caught doing the same thing? Our assets would be frozen, our wages would be attached, and there would be a good chance that we would end up in jail.

These two men, however, are not only not going to jail, they are being given a slap on the hand as their punishment, then being rewarded with appointments to help govern our country in high-paying positions! Apparently, if you are a member of the aristocracy, legal transgressions are acknowledged with a wink and rewarded with a promise of highly paid employment in a position of power and authority.

Obama and our sick congress just don't get it!

There has never been a better time for a taxpayer revolution, and they are practically inviting it! In light of the double standard, are you motivated to pay your taxes in full and on time? Or are you so infuriated that you are going to try to cheat any and every way you can on your own income taxes?

If the government becomes a law breaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. - Supreme Court Justice Louis Brandeis

A Sign of the Times

Headlines seen since the first of the year:

• 1/5/2009 Cigna to Cut 1,100 Jobs
• 1/6/2009 Alcoa to Cut 13,500 Jobs
• 1/6/2009 Logitech International will cut 500 of its non-manufacturing jobs and may reduce factory jobs as well
• 1/9/2009 Union Pacific to Lay Off 230
• 1/9/2009 Bloomberg: Employers in U.S. Cut 524,000 jobs in December
• 1/9/2009 Boeing to Cut 4,500 Jobs
• 1/9/2009 Schlumberger to cut 5,000 Houston jobs
• 1/10/2009 Salary.com has reduced its staff by 100 employees
• 1/12/2009 Cessna to Cut 2,000 More Jobs
• 1/14/2009 Random House Confirms Additional Layoffs
• 1/14/2009 Motorola to Cut 4,000 Jobs. These job cuts are in addition to the 3,000 announced last year
• 1/14/2009 Report: Oracle cuts 500 jobs
• 1/14/2009 General Electric will eliminate 1,000 jobs this year in the GE Aviation division
• 1/15/2009 Google will reduce its full-time recruiting staff by 100
• 1/15/2009 Upscale clothier Saks will reduce its workforce by about 9 percent (1,100 jobs)
• 1/16/2009 AMD to cut 900 more jobs; reduce pay
• 1/16/2009 According to Bloomberg, GE (GE) may layoff as many as 11,000 people at its financial unit.
• 1/18/2009 Circuit City is liquidating, which could put 30,000 people out of work
• 1/18/2009 Hertz (HTZ) is firing 4,000 people and Wellpoint (WLP) laying off 1,500
• 1/21/2009 BHP Billiton to Shed 6,000 Jobs
• 1/21/2009 Bose Corp. to Cut 1,000 Jobs, 10% of Staff
• 1/21/2009 Rohm & Haas Cuts 900 Jobs
• 1/21/2009 Bank of America could cut another 4,000 jobs
• 1/21/2009 Clear Channel cuts 1,850 jobs in radio, outdoor units
• 1/21/2009 Eaton Reportedly Cutting 5,200 More Jobs
• 1/21/2009 Ericsson to Cut 5,000 Jobs as Profit Falls
• 1/21/2009 Intel to Cut Up to 6,000 Jobs
• 1/22/2009 United Airlines parent posts $1.3B loss, will cut 1,000 jobs
• 1/22/2009 Huntsman Cuts 1,175 Jobs, Closes Plant
• 1/22/2009 Sun eliminates 1,300 jobs as part of larger layoff plan
• 1/22/2009 Rumor: Yahoo! (YHOO) Will Cut 3,000 Jobs
• 1/23/2009 The Wall Street Journal reports that Microsoft (MSFT) will cut 5,000 jobs
• 1/25/2009 Another big round of layoffs is expected at Starbucks, possibly 1,000 people
• 1/26/2009 Pfizer lays off 19,000 (10% reduction)
• 1/26/2009 Caterpillar Plans to Cut 20,000 Jobs
• 1/26/2009 Sprint Nextel Cutting 8,000 Jobs, 14% of Workforce, as Recession Deepens
• 1/26/2009 Barclays Says It Won't Need More Capital as ING Cuts Jobs, Replaces Chief
• 1/26/2009 Home Depot will cut 7,000 jobs and close its Expo design business.
• 1/26/2009 Texas Instruments cuts 3,400 jobs
• 1/26/2009 Philips cuts 6,000 jobs
• 1/26/2009 In the U.S., the firings brought the number of job eliminations this month to at least 150,500, according to Chicago-based executive search firm Challenger Gray & Christmas
• 1/27/2009 Baker Hughes cutting 1,500 jobs, or about 4% of its workforce.
• 1/27/2009 Target to Cut 1,100 Jobs
• 1/27/2009 Panasonic to Cut Jobs, Close Plants in Asia
• 1/28/2009 Starbucks to close another 300 stores, Cut 7,000 Jobs
• 1/28/2009 Boeing to Cut 10,000 Jobs
• 1/28/2009 Reader's Digest Cutting 280 Jobs
• 1/29/2009 First National Bank To Cut 350 Jobs
• 1/29/2009 Kodak to Cut Up to 4500 Jobs
• 1/29/2009 Ford Motor Credit announced Wednesday it will cut 1,200 jobs, or 20% of its workforce
• 1/29/2009 Allstate Corp. said it would be cutting 1,000 jobs over the next two years
• 1/29/2009 AOL intends to cut 700 jobs, according to an internal memo
• 1/29/2009 Abbott Laboratories said it would be cutting 200 positions
• 1/29/2009 Jabil Circuit announced plans to eliminate 3,000 jobs on a global basis
• 1/29/2009 Japanese automaker Nissan said it would be cutting 110 U.S. jobs
• 1/29/2009 Computer maker Dell Inc. said it would be reducing the size of its workforce, but did not specify by how much
• 1/29/2009 AstraZeneca said it would cut an additional 6,000 jobs worldwide
• 1/29/2009 Oshkosh announced 1,050 new job cuts, in addition to reductions announced last year.
• 1/29/2009 IBM last week cut some 2,800 workers from its software, sales and distribution units
• 1/29/2009 Tuesday (Jan. 25), IBM slashed 1,200 more jobs within its Systems and Technology Group worldwide
• 1/29/2009 Anslogic cutting 128 jobs in Massachusetts
• 1/29/2009 New Jersey hospital system cutting 180 jobs
• 1/29/2009 Black & Decker cuts 1200 jobs
• 1/29/2009 Drugmaker Sepracor cuts 530 jobs to lower costs
• 1/29/2009 Cabot announced it would slash 500 jobs, or 12 percent of its work force
• 1/29/2009 New York City schools could slash as many as 15,000 jobs - mostly teachers - in the next year due to budget cuts
• 1/29/2009 Corning to Cut 3500 Jobs After Profit, Sales Plunge
• 1/29/2009 NC governor proposes cutting 1300 state jobs
• 1/30/2009 Caterpillar Will Fire Additional 2,110 Workers on Top of 20,000 Job Cuts

Economics and politics are the governing powers of life today, and that's why everything is so screwy. -Joseph Campbell

America's Stealth Profession

The United States of America, this very minute, has a large stable of professionals whose only job is to make America's dreams of a better future a reality. They have been entrusted with the future of national security, the protection of American liberties, the growth of America's lead in science and technology, the foundations of our heritage and our culture, and charged with restoring the American dream!

President Bush knew about these professionals, and President Obama knows about them as well. Yet, neither have truly recognized the importance of funding an infrastructure and an environment in which they can thrive. By most standards, especially in light of the fundamental importance of the job, they are grossly underpaid. They hold the potential and have the fortitude to make our nation, once again, the preeminent world leader it once was. Still, they have been throttled in their efforts by a lack of national will and a lack of serious commitment by any administration, past or present, to make sure that they are successful.

This select group of individuals has all of the tools and resources to dramatically reduce crime and drug use in this country. They are capable of inspiring new virtuous national leaders. They have the ability to change the national discourse and reinvigorate national debate and discussion about health programs, education, and the quality of life. And yet they neither get the funding they need to adequately perform their jobs, nor a national commitment to empower them with the respect, resources, and salaries so that their fiduciary charges are properly nurtured. Their work is vital if we want our nation's extraordinary possibilities to become reality.

Think about it. We have a select group of professionals who collectively hold the key to solving all of our national problems - every last one of them! Yet they languish and have no public mandate to do what they do best. They are treated like lepers and given no esteem or recognition.

What can be done to change this situation so that America can again be revered and respected around the world? What can be done to unleash the potential of these people who hold the secret of solving our economic crisis, energizing our national ideals, and upholding our American way of life?

We can start by demanding a new national commitment to adequate funding of their place of work - their facilities, offices and laboratories. We can next demand that these public servants are given appropriate salaries to compensate them for their commitment, education, and hard work, and to also adequately reflect the importance of their product. A doubling or tripling of their salaries over the next few years would not be out of line, but rather would be commensurate with the importance we all should bestow upon this most vital of US assets.

Who are these amazing people, and why haven't we heard of them? Sadly, we all have heard of them, but we are stuck in an eighteenth-century paradigm about them. Yes, you no doubt have often given lip service to making them successful. Who are they? They are our public school teachers, of course!

Our progress as a nation can be no swifter than our progress in education. Our requirements for world leadership, our hopes for economic growth, and the demands of citizenship itself in an era such as this all require the maximum development of every young American's capacity. The human mind is our fundamental resource. -John Fitzgerald Kennedy

Amusing, Yet Painfully True

From a post by blogger Barry Ritholtz this morning comes this interesting picture (click to enlarge).

Today, as in the Gilded Age, we live in a world where a morality of personal responsibility rubs shoulders with a culture of greed and of flagrant social irresponsibility. Now as then, business has shed its collective responsibility for employees - just as government has for its citizens. -Charles Derber

Sign of the Times (Posted Without Comment)

A blog posting at Seeking Alpha this morning listed the following retail establishments in trouble:

• Circuit City filed Chapter 11.
• Ann Taylor (ANN) 117 stores nationwide closing.
• Lane Bryant, Fashion Bug, and Catherine's to close 150 stores nationwide.
• Eddie Bauer to close stores 27 stores and more after January.
• Cache (CACH) will close all stores.
• Talbots (TLB) closing down specialty stores.
• J. Jill closing all stores (owned by Talbots).
• Pacific Sunwear closing all stores (also owned by Talbots).
• GAP (GPS) closing 85 stores.
• Footlocker (FL) closing 140 stores after January.
• Wickes Furniture closing down.
• Levitz closing down remaining stores.
• Bombay closing remaining stores.
• Zales closing down 82 stores and 105 after January.
• Whitehall closing all stores.
• Piercing Pagoda closing all stores.
• Disney (DIS) closing 98 stores and will close more after January.
• Home Depot (HD) closing 15 stores, 1 in NJ (New Brunswick).
• Macy's (M) to close 9 stores after January.
• Linens and Things closing all stores.
• Movie Galley closing all stores.
• Pep Boys (PBY) closing 33 stores.
• Sprint/Nextel (S) closing 133 stores.
• JC Penney (JCP) closing a number of stores after January.
• Ethan Allen (ETH) closing down 12 stores.
• Wilson Leather closing down all stores.
• Sharper Image closing down all stores.
• K B Toys closing 356 stores.
• Lowe's (LOW) to close down some stores.
• Dillard's (DDS) to close some stores.

The economic miracle that has been the United States was not produced by socialized enterprises, by government-union-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline. -Milton Friedman

Why Detroit is in Trouble

Everyone knows that the Big Three auto makers are in trouble. What is less clear is why.

The common wisdom blames high costs to maintain their dealership networks, exorbitant labor contracts, and being out of touch with what Americans want in their vehicles. But a credible case can be made for ivory tower management which is not used to having to make hard choices in trimming the fat.

Bob Lutz, General Motors' Vice Chairman, in an interview with NPR's Robert Siegel, probably best exemplified Detroit's attitude of aristocratic profligacy when he said,

"I've never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane. I have to stand in line at the Northwest counter," Lutz says. "I've never quite experienced this before."

Don't you just feel sorry for him?

Policies that emanate from ivory towers often have an adverse impact on the people out in the field who are fighting the wars or bringing in the revenues. -Colin Powell