Saturday, March 31, 2007

Who Knew?

Those who say illegal immigrants are not taking jobs from Americans need only look at a working class Massachusetts town where hundreds of locals have rushed to apply for jobs at a factory recently raided by immigration officials.

.......Within days of the immigration raid, more than 400 local residents in the depressed factory and fishing town with the state’s highest unemployment rate, applied for the newly vacant jobs. New Bedford’s unemployment rate is nearly double the national rate although its estimated 100,000 residents are more than willing to work. The city’s mayor sees the immigration raid as a positive thing that has created hundreds of new jobs for New Bedford’s qualified and legal residents.

of course the illegal immigrants are doing jobs Americans won't do, at least if you listen to those who fashion themselves as our betters.

Subprime. It isn't just for Homes.

RGE-The Subprime Economy: Subprime Meltdown Spreading from Mortgages to Subprime Credit Cards, Subprime Auto Loans and Harley Davidson’s Hog Loans
Last week this blog argued that the subprime mortgage meltdown would spread to other aspects of the subprime lending: credit cards, auto loans, subprime consumer credit. Today we got news that even Harley Davidson’s motor hogs are being financed with subprime loans: 20% of their hogs loans are subprime and the 30-day delinquency rate on such loans has increased from a 3.6% between Q1 of 2005 and Q2 of 2006 to 5.18% in Q4 of 2006, an almost doubling of delinquency rates in two quarters.....
In conclusion, individuals or households who have subprime mortgages, subprime credit cards, subprime auto loans (and some even Harley’s hogs subprime loans) are likely to experience multiple sources of debt servicing difficulties that, in bad times, tend to pile on each other and worsen such individuals’ credit rating. The fact that such subprime borrowers are also mostly lower income individuals with high income volatility, most at risk of job loss when the unemployment rate rises and more subject to be victim of predatory lending practices by an entire subprime lending industry is the reason why their plight is becoming a leading political issue in Washington.
But, as it was discussed in previous blogs here and will be discussed more in forthcoming ones, the plight of subprime borrowers is only a mirror of an entire “subprime economy” where many near-prime and even prime borrowers have similar high debt ratios, falling wealth given the fall in home prices, resetting ARMs, rising debt servicing difficulties and uncertain income paths. This is why this is not just a niche subprime mortgage. The US is now being dragged into a subprime performance and is at a serious risk of a hard landing this year.

Bill Gross has argued that the most harmful effect of the subprime fiasco is the tightening of credit (lenders become more cautious thus leading to fewer loans thus leading to fewer homes sold thus leading to price drops thus leading to slower consumer spending, etc). It seems like the damage being spread across several different types of credit increases the risk of that happening. If folks figure out that Mortgage Based Securities aren't the only ship taking on water it seems the appetite for Debt of all sorts is bound to decrease on the street. Resulting from that will be the return of the missing risk premium over Treasury rates (which incidentally will finally solve Greenspan's Conundrum once and for all).

Credit card lenders have been preying upon low income borrowers even before Congress let them rewrite the bankruptcy laws. The Domestic automakers have been using lots of subprime lending to move the metal (in spite of that the auto manufacturing sector is in recession now). Payday lenders have been shrugging off all attempts to regulate them. There are all manner of shoes yet to drop in the subprime credit unraveling.

One thing that seems to be flying under the radar is that a lot of these foreclosures and delinquencies are happening in the rust belt where home prices have been stagnant or declining for some time now. Subprime lenders have been aggressive in these areas as well as the "bubble zones" on the coasts. As long as the public face of the subprime mess is speculators in high price areas policy solutions are going to turn the wrong way.

The motivation behind the hostage crisis?

According to U.S. officials, the Iranian forces that seized the British sailors earlier today were Revolutionary Guards, also known as Pasdaran. This is a significant distinction. The Pasdaran is a military force that is independent of Iran’s regular military. The regular military is charged with defending the Iranian state, the Pasdaran defend the Islamic revolution. In this role, domestically they have crushed opposition riots and internationally they are linked to efforts to export the revolution. The Pasdaran collaborate with Hezbollah and the Palestinian terrorist groups and are central to other covert Iranian international activities (including, allegedly, in Iraq.)

........In this case, targeting British servicemen could part of a growing strategy to push the U.K. away from the U.S. The strategy parallels the al-Qaeda strategy of targeting U.S. allies in Iraq (exemplified by the 3/11 Madrid attack which effectively knocked Spain out of Iraq.) With Tony Blair almost a lame duck and the Iraq war tremendously unpopular in the U.K., the next Prime Minister will probably distance himself from the U.S. While the U.S. and U.K. are certain to maintain a close alliance on many issues, there won’t be much British enthusiasm of high-risk American endeavors.....

The sad fact is terrorism works. As long as the State and Non-State actors get their way with this sort of behavior the longer it will continue. Concomitant with this is the slow progression of Iran toward Nuclear weapons. SInce we are so tied down with Iraq (and face a tight oil supply market) we are held back from acting against the Ayatollahs. There may be a point where the pain that would result from acting would be less than the present and potential pain that would result from not acting.

Just Sayin'

The Chevy Trax doesn't look bad, but there sure is a lot of Dodge Dart in the headlights (at least to my eyes)

Wednesday, March 28, 2007

The Journey Determines the Destination

Taki's Top Drawer:Don’t Look Left

But with every occasion on which the Christian Right squanders its moral capital, every unjust war it supports, every foolish statement designed to provoke a war between Israel and her neighbors, every ham-handed attempt to keep Christians from taking the environment (and the survival of God’s Creation) seriously, that bulwark erodes just a little. Intelligent young people look at the movement which can sanction such irresponsibility, which touts the likes of Sean Hannity, Ann Coulter, Newt Gingrich, and George W. Bush, and turn away in disgust. Like the Catholics of Spain who associate the Church with Franco’s secret police, they shudder and look for something else—a worldview which is not so manifestly juvenile and irrational.

.......The only hope of resisting the partisans of secular intolerance is to clean up the Christian Right (Catholic and Protestant), to purge it of jingoism, anti-intellectualism, and end-of-the world nihilism, then to break up its shotgun wedding to the hacks who run the conservative movement. The Christian Right must become less “Right” and much more Christian, reassert its intellectual and moral independence of partisan politics, and insist on applying its principles consistently. Pastors must stop endorsing torture, public Catholics must choose their pope above their president, and all of us must remember that the real war is not between the Democratic and Republican parties, but between the Church and the World.....

To the Republicans, Evangelicals are one of many constituencies who will be appeased only as much as necessary to advance the real agenda. It would be nice if Evangelicals had a similarly hard-nosed stance toward the party. Neither party is fully consistent with Christian teaching. Hanging a partisan banner on the cross will end badly.

Is it January 09 yet?

Washington Post: Aide to Gonzales Won't Testify

Attorney General Alberto R. Gonzales's senior counselor yesterday refused to testify in the Senate about her involvement in the firings of eight U.S. attorneys, invoking her Fifth Amendment right against self-incrimination.

Monica M. Goodling, who has taken an indefinite leave of absence, said in a sworn affidavit to the Senate Judiciary Committee that she will "decline to answer any and all questions" about the firings because she faces "a perilous environment in which to testify."

Goodling, who was also Justice's liaison to the White House, and her lawyers alleged that Democratic lawmakers have already concluded that improper motives were at play in Justice's dismissal of eight U.S. attorneys last year. Goodling also pointed to indications that Deputy Attorney General Paul J. McNulty blames her and others for not fully briefing him, leading to inaccurate testimony to Congress.

Ms. Goodling has every right to exercise her fifth amendment right not to implicate herself and if she is charged her refusal to testify should not be held against her. But the reasoning she and her attorneys has put forth to justify this decision stinks. The Fifth Amendment protects witnesses from being forced to incriminate themselves. . It does not say you get a free pass if the people asking the questions believe a crime was committed or if someone else blames you for causing them to commit a possible crime.

Ms. Goodling is saving her own skin, nothing more. That is her right. Legally, we can, will, and should not hold that against her. Politically, it can, will, and should be used as a sign that someone in the Justice department believes their actions in this affair are at least potentially criminal.

It is also the right of the Senate and House committees to haul her in under the bright lights so she can plead the fifth on national television.

Her boss still hasn't got his story straight either. Maybe her last act as Counselor should be to tell Alberto to plead the Fifth.

Monday, March 19, 2007

No Child Left Behind vs. My Child Gets Ahead

Washington Post: Dozens in GOP Turn Against Bush's Prized 'No Child' Act
More than 50 GOP members of the House and Senate -- including the House's second-ranking Republican -- will introduce legislation today that could severely undercut President Bush's signature domestic achievement, the No Child Left Behind Act, by allowing states to opt out of its testing mandates.

.....Some Republicans said yesterday that a backlash against the law was inevitable. Many voters in affluent suburban and exurban districts -- GOP strongholds -- think their schools have been adversely affected by the law. Once-innovative public schools have increasingly become captive to federal testing mandates, jettisoning education programs not covered by those tests, siphoning funds from programs for the talented and gifted, and discouraging creativity, critics say.

......"We've made a lot of progress in the past five years in serving the children who have traditionally been underserved in our education system," McLane said. "Now is not the time to roll back the clock on those children."

But so far, the administration's efforts have borne little fruit, Republican critics said.

"Republicans voted for No Child Left Behind holding their noses," said Michael J. Petrilli, an Education Department official during Bush's first term who is now a critic of the law. "But now with the president so politically weak, conservatives can vote their conscience."

God forbid we might have to take away from the few in gifted programs to make sure everyone can read when they graduate. By all means lets shift the system back to "lucky sperm lotto" to give gold plated educations to the few at the expense of the many. That whole "equal opportunity" thing is a hollow promise with this crowd. Of course the louts who push for this are the same ones grousing about how poorly educated the workforce is.

Sunday, March 18, 2007


Via autoblog Green comes news of a new heavy hybrid powertrain from Eaton and being showcased in a new Pete 386, here's some details from the press release
During third-party testing, the Eaton Hybrid Power System has routinely achieved a 5-7 percent fuel savings versus comparable, non-hybrid models. It may result in a savings of one gallon of fuel per hour when idling.

At the current average diesel price of almost $2.50 per gallon, those savings equate to about $9,000 to $10,000 a truck per year in operation.

The heavy-duty hybrid electric power system features an automated manual transmission with a parallel-type “direct” hybrid system, incorporating an electric motor/generator located between the output of an automated clutch and the input to Eaton’s Fuller® UltraShift® transmission. The system captures energy generated by the diesel engine and recovers energy normally lost during braking and stores the energy in batteries. That electric torque is then sent through the motor/generator and blended with engine torque to improve vehicle performance, operate the engine in a more fuel-efficient range for a given speed and/or operate only with electric power in certain situations.

In this heavy-duty application of Eaton’s hybrid power technology, fuel efficiency and emissions reductions are best achieved both while the truck is rolling or standing still. The system’s batteries power the heating, air conditioning and vehicle electrical systems while the engine is off. When the idle reduction mode is active, engine operation is limited to battery charging, an automatically controlled process that takes approximately five minutes per hour to fully charge the system. In the proposed system design, a proprietary feature minimizes engine vibration during start-up and shutdown during the recharge periods, allowing the driver to rest without interruption.

What is clever about this system (which seems otherwise fairly similar to one being developed by Arvin Meritor) is the integration of the battery pack with the climate control systems to provide for driver comfort ("hotel" loads in industry parlance) while parked, thus limiting idling.

One thing seems strange though, according to the release this system only has enough battery capacity to manage hotel loads for an hour, whereas there the "Comfort Class"battery setup being offered by Peterbilt that only does hotel power, but does it for up to 10 hours (paired with a small diesel fired heater). So are they cheaping out on batteries to compensate for the weight and/or cost of the Eaton generator/motor? Fleets are pretty sensitive on both counts. Hopefully we will see an improvement in battery capacity that would make the system more capable.

What did He say?

Just watched iRobot and the movie was fine enough, but shared a shortcoming that a lot of current movies have (especially in the action genre). The music and sound effects are so loud relative the voices of the actors that you have to have the TV blasting in order to pick out the dialog. I suspect this is a feature, not a bug. The loud music ramps up the tension, etc. It serves the same function as the now ubiquitous laugh track in comedy, letting us know what we are to feel about the events on the screen. Maybe I'm old fashioned but I'd rather the storyteller work on telling a story and letting me sort out my own feelings about what is happening. Anytime someone is trying to bypass my reason to get a reaction I get a little nervous.

Monday, March 12, 2007

The Elephant in the Room

The American Spectator: Are Pro-Lifers ready for Rudy?
Like Colin Powell thirteen years ago, Giuliani is a popular figure and compelling prospective nominee. But pro-lifers should think long and hard before they work to nominate and elect a Republican with an abortion record virtually indistinguishable from Hillary Clinton's. There are many establishment Republicans -- and even some conservatives -- who would like nothing better than to ignore abortion and social issues. President Giuliani would strengthen their hand considerably.

How could pro-lifers ever object to any pro-choice candidate again -- Republican or Democrat -- if they overlook Giuliani's current positions and past pronouncements?

There are counterarguments, of course. If Giuliani is the strongest GOP presidential candidate, he would help elect Republicans -- many of them pro-life -- in down-ballot races. Pro-lifers would get jobs in his administration; the fact that Giuliani has reversed himself on partial-birth abortion and promised to appoint originalist judges (which is necessary for any pro-life progress) shows he respects their influence. And all the viable alternatives to Giuliani come with their own problems.

Yet it is hard to see how that influence can be maintained if pro-life support can be bought with such minor concessions. There are many otherwise conservative judges who would nevertheless uphold Roe on stare decisis grounds; Giuliani has given no indication that he will go out of his way to find judges who favor its reversal. Republicans who want to end the pro-life litmus test generally favor making abortion a lower-priority issue. Why should pro-lifers help them?

Precisely. The 2008 election is most likely a lost cause anyhow. Chasing Electability for your party's candidate usually gets you nowhere except farther from the reasons you want your party in power. Progressives and Union members in the Democratic party have been holding their nose and pulling the lever for some time now and the center of gravity keeps drifting away from them. You get more of what you put up with.

Well, It Made My Wife Laugh

The only difference between a Republican Economist and a Democratic Economist is the Democrat will frown when he tells you you're going to starve.

Undertone Networks is the AntiChrist

I'm sick of Undertone networks and their friggin pop-unders. Purveyors of pop up ads should be treated like Spammers under the law. I have a pop up blocker running on Safari and still I have to go and close 10 flippin Undertone Networks windows every few hours.....
Just had to interrupt the post to answer the door.

Too Clever by Half

GM already has produced clay models of these new Cadillacs. In the near future, it will decide whether to OK development, say GM Vice Chairman Bob Lutz and Cadillac General Manager Jim Taylor.
During interviews at the Geneva auto show, both executives explained their plans to make Cadillac competitive with Lexus, BMW and Mercedes-Benz. They also voiced varying opinions about some Cadillac issues, offering a revealing glimpse of GM's internal give-and-take.
Whether to keep or discontinue the front-wheel-drive DTS sedan, Cadillac's top-selling nameplate. Taylor says he's undecided; Lutz prefers to phase it out and keep the rwd STS.

Front-wheel drive does not match the brand image of global luxury Cadillac is seeking. But the DTS was Cadillac's top seller last year, with U.S. sales of 58,224. The DTS accounted for 25.6 percent - about one-quarter of the brand's U.S. volume.

Taylor said GM could put the DTS on the Zeta rwd platform, which will be used for the coming Pontiac G8; merge it with the STS line; or keep it in its current form.

But in a separate interview, Lutz flatly stated that the DTS replacement should be rwd.

Most upper midwest retirees don't want a RWD car. Granted a FWD car is going to be panned in the car rags, but they don't have to sell cars, GM does. It's good that the domestics are rediscovering RWD cars, but putting all of their eggs in the RWD basket is as short sighted as making the entire line FWD, The key is making what your customer wants. GM is strongest in the midwest. It snows in the midwest. Many folks believe, with some justification, that a FWD car is better in the snow. If Gm doesn't make a FWD luxo-barge I'm sure that one of the Asian makers will be more than happy to sell their customers one. Southern California isn't the only market and BMW isn't the only competitor. Hopefully the execs realize that before they pull the trigger. Perhaps there is a reason that the FWD car is their best selling model.

Sunday, March 11, 2007

Gettin' while the Gettin's Good

AP (via Huffington Post):Halliburton Will Move HQ to Dubai
Oil services giant Halliburton Co. will soon shift its corporate headquarters from Houston to the Mideast financial powerhouse of Dubai, chief executive Dave Lesar announced Sunday.

"Halliburton is opening its corporate headquarters in Dubai while maintaining a corporate office in Houston," spokeswoman Cathy Mann said in an e-mail to The Associated Press. "The chairman, president and CEO will office from and be based in Dubai to run the company from the UAE."

I imagine when the Democrats storm the Bastille heads will roll (hopefully not literally). So I'm sure it makes sense to be out of reach of a subpoena.

Teacher advocates Teacher Full Employment

Tribune-Star:Schools, privatization concern Valley constituents
Skinner also addressed his proposed legislation on homeschool regulations.

“There’s very little regulation in that area, and I’m concerned,” he said. “Here we’re setting standards, increasing standards, making teachers and schools more accountable, what are we doing here? We’re making exceptions for that accountability and I don’t think that’s the direction we want to go.”

Scott Moore, of the Vigo County School Corporation, representing Superintendent Dan Tanoos said he is concerned about senate bill 56.

The bill, introduced by Sen. Teresa Lubbers (R–30, Indianapolis), would allow anyone who has earned a postgraduate degree and has taught any grade level (including college) for at least a year, to be certified to teach in the subject area for which the person holds a degree.

Moore said, “If I have a college education, I can be hired without [traditional teacher] certification.”

Rep. Kersey and Sen. Skinner, both teachers, expressed frustration with the bill, saying it would undermine efforts to improve classroom instruction.

So Skinner is against people having the right to educate their own children as they see fit and opposes efforts to increase the pool of teachers (with people who might have learned more about what they're trying to teach as opposed to the latest fads in "education"). He must have learned in his Department of Education certified teacher's program about supply and demand! I wonder if there might be a conflict of interest?

Monday, March 05, 2007

Scooter Potatoes

The Wall Street Journal: Make Way for
The Sidewalk SUV

On a recent afternoon at Walt Disney World, Dennis Robles was cruising around on an electric "mobility scooter" that the park usually rents out to people with disabilities. Mr. Robles doesn't have a problem walking -- he says he was simply saving up energy for late-night dancing.

"I'm pretty healthy," says the 37-year-old truck driver from Brooklyn, N.Y. "Just lazy, I guess."

The power scooter is an increasingly ubiquitous sight, with an estimated 1.2 million in use nationwide. But while the $1,000-plus vehicles have been hailed as a boon for the infirm and the elderly, they are now finding a new constituency: able-bodied people who simply don't feel like walking. In addition to theme parks like Dollywood and Minnesota's giant Mall of America, the scooters are popping up everywhere from Las Vegas casinos to grocery stores. When scooter demand outstrips supply at Wal-Mart, greeters "evaluate the situation" and make sure that people using the scooters can demonstrate a legitimate need, according to a company spokesman.

Some entrepreneurs are starting to push the vehicles as bicycles without the pedaling. City Scooter Tours, an outfit that operates in Washington and plans to extend into Chicago, offers scooters as an easy way to see the sights.

Folks aren't just lazy, they also have no shame about it.

News from the Department of Unintended Consequences

Econbrowser: CAFE standards
There is an interesting new study of this by Mark Jacobsen, an economics Ph.D. student at Stanford whom we're trying to persuade to join our faculty at UCSD. Jacobsen notes that auto producers generally fall into one of three groups, as exemplified by Toyota, Ford, and BMW in the diagram below. The fleet of a Japanese producer like Toyota usually has an average fuel economy that is higher than the existing CAFE standard, meaning that a modest increase in the standard would not affect them directly. European producers like BMW fail to meet existing CAFE standards, and choose to just pay the fine that is required for any company that fails to comply. The third group is the U.S. producers like Ford, who feel that violating the CAFE standards would expose them to unwanted publicity, litigation, or further undesirable legislation, and therefore stay just inside the standard. It is thus the U.S. auto producers who do the adjusting when CAFE standards are tightened.

Jacobsen builds a detailed model of the American new and used car market based on the choices consumers make between different kinds of cars. His simulations suggest that one consequence of tightening CAFE standards is an increase in the number of imported cars and a decrease in the fuel efficiency of those cars. Essentially the European producers have an advantage over the American producers in being more willing to flaunt their violation of the CAFE standards, and the Japanese producers have the advantage of selling enough compact vehicles to be allowed to expand less-efficient models such as the Acura. Thus, people who like bigger cars end up buying more of them from the importers when the standards are tightened.

......Although it is hard to motivate CAFE from sound economic principles, somehow it has political staying power. The public evidently sees the costs associated with CAFE as borne by "somebody else" whereas they know they pay the gasoline taxes themselves. But here's another possible proposal that might be suggested by Jacobsen's research. Why not start decrying the fact that some of those foreign companies are failing to comply with our existing CAFE standards, and claim that what we need to do is get more serious about enforcing these, and raise the payment required per vehicle of any company that fails to meet the standards? In practice, this would amount to either raising the tax on BMWs, or forcing the European importers to sell some more fuel-efficient vehicles. Ford and GM would be spared, as long as they continue to stay within the existing standards. [emphasis added]

Of course a gas tax is politically unpopular (never mind we can't seem to come up with the cash to maintain infrastructure much less expand it to meet our growing needs). Americans have gotten used to the "free lunch" of the tax revolt mentality that took hold in the 70's (which has generally meant in practical terms eating a lunch on the tab of your descendants).

Given the blind acceptance of free trade as a panacea by both parties and the desire to be seen to be "doing something" about climate change and oil dependence, the best we can hope for is some government largesse to soften the blow to the workers of the big 2.5 who will suffer when the goalposts move. There will be a double whammy of reduced market share for the big 2.5 and within that smaller share more of the product will be made overseas. The big 2.5 have a lot of old, old plants and whenever you do a major revamp of product a certain number of them are not going to be cost effective to upgrade and will be replaced. This is speeding up a secular trend, not creating a new one but such subtleties will be lost on those affected.

Thoma's proposal would certainly be more progressive by and large, passing the tab to those most able to pay, but politically that is hardly a point in its favor even among Democrats (who tend to treat progressives a bit like Republicans treat libertarians That's interesting, dear. Now run along and play, Daddy is working.).

If we are going to increase CAFE let's do it right, run one standard all the way to 10,000lbs GVWR. Allow a 5 year window before the new rules take effect to allow the automakers time to shift plans and develop new product. Lower the threshold for the 12% Federal Excise tax on heavy trucks to 10,001 lbs (presently at 33,000 lbs) so that we don't push passenger vehicles up the weight ladder. Change the gas guzzler tax from the current mpg graduated system to a simple 12% excise tax (so the tax rate for guzzlers is GVWR neutral). Automakers (whatever their ownership) get massive tax credits for upgrading stateside facilities. Big money is put into subsidizing R&D for the big 2.5 (perhaps under the fig leaf of a University of Michigan research program). Last but not least unemployment and retraining benefits are expanded for people who lose their job within a certain period of time.. How to pay for it? The added FET revenues should help and maybe a gas tax (wink)

Sunday, March 04, 2007

Bringing Integrity to the White House...Not!

Slate: The CEO candidate
For Republican presidential candidate Mitt Romney, the transition from moderate, gay-friendly, abortion-tolerating Massachusetts governor to a certified social conservative isn't going smoothly. YouTube and Google have exposed Romney's shifting policy positions and relatively recent history of liberal behavior. In 1992, he voted for Democrat Paul Tsongas in the presidential primary. In a 1994 debate, he promised to be better on gay rights than Ted Kennedy and spoke movingly about why abortion should be safe and legal. Today? He's hyperpartisan, pro-life, and hostile to gay marriage. Last year, he worked with Democrats to enact universal health care in Massachusetts. Today, his campaign Web site's health-care page doesn't even mention it.

Romney's flip-flops have been aggravated by his clumsy responses. Disavowing his remarks in the 1994 Kennedy debate, he said: "Of course, I was wrong on some issues back then. I think most of us learn with experience." Yes, as an unformed man of 47, this CEO, father, and multimillionaire was in the thrall of foolish, immature ideas.

It's easy to conclude that Romney lacks core principles and will say or do anything to get elected. But I think there's something deeper at work. Romney's behavior—and the fact that he doesn't think his obvious flip-flopping should arouse suspicions—suggests that he may be the first real CEO/MBA candidate. Sure, President George W. Bush is the first president to have an MBA, and he made noises about running the country like a company. (Insert Enron joke here.) But in contrast to Bush, Romney was a real businessman before getting into politics......

So, how are Romney's flip-flops and business success connected? People suspect, perhaps correctly, that Romney really doesn't believe all the things he's saying. His wife, Anne, has multiple sclerosis, yet he's opposed to embryonic stem-cell research. If an MS treatment derived from embryonic stem cells were to be developed overseas, it's a pretty sure bet that Romney would use his influence and funds to get that treatment for his spouse.

But such hypocrisy, which turns off voters, is something like a job requirement for CEOs. In the executive suite, abandoning deeply held attitudes and reversing positions are job requirements.....

Just what we need in the oval office, someone who'd sell his own mother to get ahead. Competent but mendacious is only a 50% improvement in the status quo The article made me think of the delicious moment in 1632 (an incredibly fun book) when a CEO gets smacked down in his attempt to take power in the accidental nation:

Mike gave Simpson a glance, lingering on it long enough to make the gesture public. "We haven't even got started, and already this guy is talking about downsizing."

The gymnasium was rocked with a sudden, explosive burst of laughter. Humor at Mike's jest was underlain by anger. The crowd was made up, in its big majority, of working class people who had their own opinion of "downsizing." An opinion which, unlike the term itself, was rarely spoken in euphemisms.

.......He heard Darryl's voice, somewhere in the crowd. "Tell 'em, Mike!" Then, next to him, Harry Lefferts: "Shoot the CEO!"

Another laugh rippled through the gym. Harsher, less humorous. The title Chief Executive Officer, for most of that blue-collar crowd, vied in popularity and esteem with Prince of Darkness. The Four Horseman of the Apocalypse, rolled into one, wearing a Brooks Brothers suit and holding a pink slip in his hand.

Sorry. No room in the Ark for you. Nothing personal. You're just useless in today's wonderful global economy.

Though I have to admit it'd be delicious to pull the lever to give a CEO a pink slip.

Sneaky, Sneaky

Houston Chronicle: Kennedy, McCain keep immigration bill closeted
The Senate's march to overhaul the nation's immigration laws is starting in somewhat rocky fashion, with Sen. John Cornyn of Texas and other leading Republicans complaining they've been shut out of the bill-writing process.

"It's not a good way to try to build consensus and to solve problems by withholding information," Cornyn said Wednesday as the Senate Judiciary Committee began debate.

Even the committee's top Republican, Pennsylvania Sen. Arlen Specter, complained he'd been frozen out of the talks on a bill co-sponsored by one of his GOP colleagues, Arizona Sen. John McCain.

Sen. Ted Kennedy, D-Mass., and McCain will unveil the bill as early as next week. Senate leaders hope the Judiciary Committee will approve the bill this month, paving the way for a vote by the full Senate in April.

The bill reprises much of what the Senate approved in May: A path to citizenship for most of the estimated 12 million illegal immigrants, a guest worker program for future foreign workers and heightened immigration enforcement.

McCain is woking as hard as anyone, but I just don't think he's going to get the Democratic nomination.


Fat Doctor: Soldier's Son
Today, Soldier Mama, who drops her five year old son at preschool around the same time every day as I do, sat at the table talking quietly to her son as he wept. She looked at me and said, "I'm going back to Iraq next week." I watched as she temporarily patched him up for a school day and then left. Her son watched her drive away from the window.

When we first started the school, I noticed that this woman wore fatigues every day. We have exchanged pleasantries over the months, and I knew she was in the active duty full-time Army.

The teacher, who I call Russian Nazi, came over to where we stood, sat down on a little kindergarten chair and scooped the boy into her arms. He rested his head on her shoulder. She spoke quietly while stroking his back.

"She's a Major and is responsible for training the soldiers there," Russian Nazi said. "She spent a year and a half there and just came back in early August. She earned a purple heart last time she was was in Iraq. She's a hero."

Feeling helpless, I said to the boy, "You must be so proud of your Mama. This has to make you sad, too."

He just stared out the window over the teacher's shoulder while she comforted him.....

But how deep is the commitment?

RealClearPolitics: The New Politics of Global Warming
A political issue has reached critical mass when its natural adversaries throw in the towel.

That is what is happening in the United States on global warming, with President Bush and much of corporate America signaling they are through disputing whether temperatures are rising enough to portend future woes.

Of course, even if the disputes about the existence or potential ills of climate change are abating, that doesn't mean the global warming believers will now get the laws they want, or even find that candidates espousing their views win more elections.

In fact, the developing consensus that it is time to deal with the global warming problem rather than argue about its existence is likely to make it less, not more, of a salient domestic political issue.

The reality of Climate change has become conventional wisdom. Americans are all for "someone" doing something about it. Of course that doesn't mean they want to turn down the thermostat or trade the Land Cruiser for a Prius. The Pro-Life Community has spent years working to convince society at large that the unborn child is a human being. That has gained some traction, but the follow on belief, that Abortion should be prohibited by law has gone nowhere fast. Americans still " believe in abortion under only three circumstances: rape, incest, and "my situation."". Substitute "burning fossil fuels" for "abortion" and you aren't too far away from the reality. The oil companies and the auto companies are evil (after all look how high gas is and that Tahoe I bought for $10K under invoice only gets 13 MPG!). Hey, everyone agrees that we should use less gas, but not too many are volunteering. As long as Al Gore is a heroic figure sticking it to assorted faceless corporations he is going to be warmly regarded as a maverick hero. President Gore announces a new carbon tax (which means taxes on gas, electric, and heat) and he's just committed political hari-kari.

The ATA is "thinking" again

Heavy Duty Trucking: Truckers Face Hot Issues In '07
On another safety matter, Dave Osiecki, an ATA [American Trucking Association] vice president, said the association is drafting a new policy on entry-level driver training in anticipation of an FMCSA rule on that subject this year. ATA intends to develop a core training curriculum, he said.
The driver turnover problem is a constant challenge for ATA, and part of the answer may come from immigration reform.
"Unfortunately, last year's immigration bill was not one of the more shining moments of the 109th Congress," Lynch said. That bill mandated erection of a fence along the U.S.-Mexico border, but did not address other concerns such as a guest worker program or changing the permitting quotas.

Perhaps if driver pay was not below 1980 levels and conditions were improved there would not be a "shortage" of drivers. It's amazing how folks on the bottom are told all the time that supply and demand is the rule and we better deal with it, but when it doesn't work for the megacorporations they want to change the rule.

I wonder too how well these new immigrants will fare on the road. Once they move here they are operating in the same cost environment native born workers are. Try living on what you can get at truck stops and you'll be broke and in poor health. The trick used to be running a 12v cooler and refilling at a Wal-Mart every week or so, but the "no truck parking" signs are steadily going up at stores around the country. Plus I know I usually was "lending" my employer $50+ a week for tolls and scales when I was running Over the Road. Then there are the conditions: weeks away from home sleeping in a metal box, constant exposure to carcinogens, noise, and vibration, going places you would never go otherwise (You haven't lived till you've drug a 53' box into Queens), irregular hours, little sleep, etc.

If it's not one thing, it's another

Houston Chronicle: GMAC's Subprime Mortgages a Threat to GM

The cratering of the subprime mortgage industry could present more than just a pothole for General Motors Corp.

The world's largest auto maker disclosed Thursday that it will need more time to file its 2006 annual report with the Securities and Exchange Commission, marking the second year in a row the company has postponed the key filing.

Many analysts attribute this year's delay to a substantial hit the Detroit-based automaker might take from the exposure its part-owned finance unit _ GMAC Financial Services _ has to the business of making mortgage loans to people with weak credit or heavy debt burdens.

The entire mortgage industry is feeling the pressure from slowing home sales, intensifying competition and rising past-due loans. Higher delinquencies on subprime mortgages _ in large part due to a sharp deterioration of underwriting standards last year _ have in recent months forced a slew of lenders, big and small, to set aside more capital for potential loan losses.

In many cases, lenders have also been forced to write down the value of their mortgage securities. Many analysts say GMAC's home-lending unit, Residential Capital LLC, known as ResCap, is not immune to the industry stress. The unit is heavily involved in the subprime mortgage business _ making and investing in such loans itself and providing funds to other mortgage originators.

Lehman Brothers analyst Brian Johnson estimated that loan-loss provisions and writedowns of mortgage securities at ResCap could cost GM $900 million to $950 million in cash charges in the first half of this year.

Among the areas of concern to analysts and investors: At the end of the third quarter, ResCap, long viewed as the crown jewel in GMAC's businesses, held $57 billion of subprime mortgages for investment, or 77 percent of its total loans held for investment. Its exposure to "residual interest" in mortgage securities _ the high-yielding slices that suffer some of the first losses if loan defaults are higher than expected _ was $1.4 billion as of Sept. 30. Meanwhile, ResCap is one of the biggest providers of short-term "warehouse" funding to smaller mortgage lenders.
The automaker sold 51 percent of GMAC for $14 billion to Cerberus Capital Management. The deal closed in November, but GM and Cerberus have since been trying to determine whether the value ascribed to GMAC at the time is reliable and if either side needs to pay settlements to adjust the purchase price.

GM continues to own 49 percent of the lending unit and relies on GMAC's health, because the unit backs GM's major incentive programs by offering attractive leasing and financing terms.

GMAC had been one of the bright spots on GM's balance sheets. I wonder how long it will take for Cerebrus to start raving "I was robbed, I was robbed!" in court? GM doesn't need either thing, another cash draining business or a high profile lawsuit. I also wonder how this will affect GMAC's credit rating and access to capital, the improvement of which was the reason for the partial sale.

Saturday, March 03, 2007

Carbon caps, gay marriage, and the dark art of being a Shrewd servant

Some businesses have went on the record being in favor of carbon caps recently. The most convincing explanation I have heard for this sudden "green" push is business groups figure a carbon cap is coming and want a hand in drawing up the rules.

Hearing the news made me think of gay marriage oddly enough. Right now the Socially conservative wing of the Republican party has been able to keep gay marriage on the other side of the 50 yard line. But the line of scrimmage is slowly (but steadily) being pushed back. To break the analogy a bit, the Republicans are probably facing a shrinking team and a growing opponent's team as the consequences of the Bush term play out. At some point the Democrats are going to push it through. It might be in 2 years, it might be in 2 decades but it is coming. Right now the right could strike deal with the sane members of the Democratic party that would allow some form of gay marriage, but build a fence around churches' tax exempt status., I doubt we'll get such an offer from the Eels

Conspiracy Theories

Angry Bear: The Fed, Presidential Elections, and Coincidence

Since data from the Fed became available in 1959, when there is a Presidential election involving an incumbent from the same party as Fed chairman, the year on year Money Supply (as measured by real M2 per capita) increases each and every month by more than when there is no election or when there is no incumbent. By contrast, when there is a Prsidential election involving an incumbent from a party other than that of the Fed chairman, the year on year Money Supply decreases each and every month. I don't see how one can reach any conclusion other than that the Fed is meddling in Presidential Elections in a blatant and partisan way.

It's interesting, but I find it a bit hard to believe that every Fed chairman since 1959 have been in on this (and has never fingered a previous chair for their nefarious deeds). Maybe it's subconscious....