Inside Job ....the Movie

Oh boy, oh boy, oh boy! Matt damonMatt Damon wants to interview me. ME! He'll autograph one of his pictures, and (blush) he'll probably want one of my own. After all, he's reached the top of his field and I've reached the top of mine.
 
 But wait! Matt Damon is interviewer for a movie called Inside Job. Inside Job
About root causes of the 2008 financial collapse! [the one replaying in Europe at this writing] Aren't you worried he may ask embarrassing questions?
 
Nah! He's just a dumb actor. What does he know? I'll razzle-dazzle him. He may be good at pretending to be a successful person, but I'm the real thing! He'll be thrilled to meet me. Not a problem. I'll generously grant him a few minutes of my time.
 
But it turns out that Mr. Damon's not so dumb after all. Plus he's a quick study. Plus he's been coached by the best. It's just my guess, but I think the filmmaker used him as bait, to lure in unsuspecting hotshots. You never see his face, just like in the old days when you never saw a newspersons's face....before they immodestly decided that they themselves were also news and so had to have their mugs on screen. But with Mr. Damon, it's back to the old ways...you never see him, you only hear his voice.
 
And if Glenn Hubbard [chief economic adviser to the Bush administration, and Dean of Columbia Business School] fell for the Damon bait, I've no doubt he's lived to regret it! “This is not a deposition, sir,” the cornered Hubbard huffs, getting hot under Damon's unrelenting questions. “I was polite enough to give you time, foolishly, I now see. But you have three more minutes. Give it your best shot!”
 
I knew he was toast the moment he said it! If only I could have warned him! Words like that don't work. I know, because years ago I used those exact same words on Mrs. Sheepandgoats when she was ragging on about some shortcomings she imagined I had. It's amazing what a woman can do in three minutes!
 
But Mr. Hubbard is not the film's villain. Not by any stretch. He has a role, but it's only a tiny one. He's in a cozy “you scratch my back, I'll scratch yours” society, that's all, which nets him a good chunk of change. ($100,000 to testify in defense of a couple hedge fund managers, who were nonetheless convicted of fraud) But that's very small potatoes compared to the massive misdoings that Inside Job lays bare. All the really big fish were smart enough to lay low...they weren't taken in by any 'oh boy!....lets talk to Matt Damon!' ploy. They have enough dough to buy and sell a hundred Matt Damons.
 
With patient clarity, Inside Job lays out what led up to financial disaster in 2008. “This crisis was not an accident,” the film asserts. “It was caused by an out-of-control industry. Since the 1980s, the rise of the U.S. financial sector has led to a series of increasingly severe financial crises. Each crisis has caused more damage, while the industry has made more and more money.”
 
Back in the day, the film explains, if you wanted to buy a house, you approached a bank for a loan. That's what I did. And then for the next 'what seemed a lifetime' you'd pay off your mortgage. The bank was careful loaning you money, because it was their money. They wouldn't loan it if they thought you might not pay it back. Isn't that simple? It had been that way forever.
 
But starting in the 1980's investment banks went public, raising millions from the stock market, and came up with new ideas to make money. Since Americans had never defaulted on their mortgages....I mean, who wants to lose their home?...even in times of crisis, it was the absolute last expense one would renege on......why not buy those mortgages from whoever wrote them, then sell them to investors in the stock market, reaping a fat commission on the way? Of course, no investor's going to buy a single mortgage, but if you bundled them up several thousand at a time, then it became something people would invest in! Brilliant! Profitable! A win-win! Well.....maybe not that last adjective. Does anyone see the flaw?
 
See, the mortgage writer held that mortgage for only a short time. He sold it to an investment bank straight away, who also held it only a short time. The bank put it on the stock market for individual investors to purchase. So, in time, it occurred to these two middlemen that they needn't worry too much about whether the mortgage could be repaid, so long as they could stick it to some investor further down the line, who was removed from the original translation and might just assume it was sound investment! Especially if outside authorities....call them rating agencies....like Moody's, Fitch, and S&P....assured them that those investments were absolute rock-solid. Rating agencies did just that! After all, they drew their fees from those very same investment banks bundling the mortgages, and money blinds people. If they ever came to have misgivings as the mortgage quality deteriorated, they chose to look the other way. Such investments enjoyed the highest ratings right up until they crashed.
 
And crash they did. Enticed by fat commissions, and over the span of two decades, it became easier and easier to get a mortgage. People could do it with limited income, sometimes even with no income, since it got so that oftentimes nobody bothered to check if the applicant was creditworthy or not. Home prices began rising so quickly that people would buy one, even if they couldn't quite afford it, with the notion that they could flip it for a big profit in just a few months!
 
Here's Alan Sloan, senior editor of Fortune Magazine, interviewed by Inside Job:
 
“A friend of mine, who, who's involved in a company that has a big financial presence, said: Well, it's about time you learned about subprime mortgages. So he set up a session with his trading desk and me; and, and a techie, who, who did all this – gets very excited; runs to his computer; pulls up, in about three seconds, this Goldman Sachs issue of securities. It was a complete disaster. Borrowers had borrowed, on average, 99.3 percent of the price of the house. Which means they have no money in the house. If anything goes wrong, they're gonna walk away from the mortgage. This is not a loan you'd really make, right? You've gotta be crazy. But somehow, you took 8,000 of these loans; and by the time the guys were done at Goldman Sachs and the rating agencies, two-thirds of the loans were rated AAA, which meant they were rated as safe as government securities. It's, it's utterly mad.”
 
They were called CDOs, “collateralized debt obligations.”
 
Didn't I write here back in 2008 about a couple of “douchebags” (not my word) who made a fortune writing “toxic” mortgages like this? Eventually, word got out that, contrary to the theorists, that people were defaulting in droves, and the entire market crashed.
 
But there's more. By 2006, the big investment banks realized the CDOs they sold were risky and might fail, so they began buying insurance, called credit default swaps, (CDS) from AIG Insurance, so that they would reap a profit if the CDO's really did go bust. Obviously, they stopped selling those toxic CDOs, right? Nope. All the while they continued to market CDOs as a high-quality investment! Meanwhile, they continued to buy CDSs till it dawned on them that AIG itself might go bust (which did happen). So they insured against even that! Is it any wonder I launched my ill-fated service presentation about “big-time bankers?”
 
But wait! Could all this possibly happen under the watchful eye of regulators? Again and again, Inside Job reveals how regulators saw all this developing....and did nothing. One such regulator, a former Fed banker, is convulsed with the worse case of the stammers I've ever seen trying to explain his role to Matt Damon:
 
“So, uh, again, I, I don't know the details, in terms of, of, uh, of, um – uh, in fact, I, I just don't – I, I – eh, eh, whatever information he provide, I'm not sure exactly, I, eh, uh – it's, it's actually, to be honest with you, I can't remember the, the, this kind of discussion. But certainly, uh, there, there were issues that were, uh, uh, coming up.”
 
 
 
There's not just bad guys in the film. There's good guys too. And one of the good guys is someone we've long thought was a bad guy, after initially thinking him a good one! Elliot Spitzer! SpitzerI have a whole blog category about him, which I was about to phase out, until this movie hit the screens. He was New York's governor for a short time, the state's potential saviour (and does it ever need one). Almost single-handedly, as New York's attorney general, he took on these defrauders himself. He had to do it almost single-handedly, because nobody else would co-operate. Says he in the film: “The regulators didn't do their job. They, they had the power to do every case that I made when I was state attorney general. They just didn't want to.” It arguably was not even Spitzer's business, or at least not his mainline business, for Wall Street dealings came first under the scrutiny of the Securities and Exchange commission. (SEC) But they so glaringly neglected the job, that Elliot Spitzer stepped in.
 
“There is a sensibility that you don't use people's – uh, personal vices in the context of Wall Street cases, necessarily, to get them to flip. I think maybe it's, after the cataclysms that we've been through, maybe people will reevaluate that. I'm, I'm not the one to pass judgment on that right now.”
 
There's also Kristin Davis, Kristin daviswho ran a prostitution ring from her high rise apartment. She details the “personal vices” of her thousands of Wall St clients, so that we see Mr. Spitzer's carrying on was by no means unusual for the culture he was operating in. But he was the “good guy,” and I suppose you do expect the good guys to be good. Ms Davis also emerges as a good guy, since she spills the beans on the collasol debauchery of the Street.
 
 
The top investment bank execs all steered clear of Matt Damon, correctly smelling a rat, but they couldn't really avoid Congress. The film provides footage of these big-time bankers being grilled by various legislators. Watch em squirm! It's lots of fun. But don't kid yourself. They only squirm to a point. And a little squirming can be endured if you're nonetheless walking off with a personal profit of millions, even billions of dollars.
 
Another aspect of them film which has a curious effect: Whenever you see a picture of some people and one of them is the United States President, and the camera begins to zoom in, you know it's going to zoom in on the President, until presently the other nobodies fall of the frame. Inside Job zooms in on the other guys, all high-powered banking types who, the inference is clear, are really running the show. Here is footage of Ronald Reagan and his Treasury Secretary, former Morgan Stanley CEO Donald Regan, and it is Regan who is the focus. There is Bill Clinton side by side with his Secretary Treasurer, then Goldman Sachs CEO Robert Rubin, and it is Rubin who takes the spotlight. Ditto for George W Bush and later Goldman Sachs CEO Henry Paulson; the same for Barack Obama and Tim Geithner, former President of the New York Federal Reserve branch. Who isn't reminded of Amschel Rothschild's words almost two centuries ago: "Let me issue and control a nation's money and I care not who makes its laws." Democrats in power? Republicans? Doesn't matter. “It's a Wall Street government,” says Robert Gnaizda, former director of the Greenlining Institute, with no reform in sight.
 
 
 
Does the movie really end with a call to arms?
 
“They [the investment bankers] will tell us that we need them, and that what they do is too complicated for us to understand. They will tell us it won't happen again. They will spend billions fighting reform. It won't be easy. But some things are worth fighting for,” the film concludes.
 
…...............................................
 
Fast forward three years later. The investment firm MF Global has just failed, in exactly the same fashion as Lehman, Bear Sterns, etc, demonstrating no one's learned anything since 2008. The movement Occupy Wall Street spreads from it's Manhattan home base to cities the world over, over a thousand at last count.
 
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The movement began only two months ago.
 
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Where is Eliot Spitzer When You Need Him?

They cheered on the stock exchange floor the day Eliot Spitzer went down. The past year has been dismal for stocks, but prices soared on that day! The Sheriff of Wall Street was dead! In fact, he was better than dead…..he was disgraced.

Regular folk heehawed and ridiculed. Under pressure, I reluctantly agreed to close out my Eliot Spitzer category (but reneged), yet even then  I stated:

“As NYS Attorney General, Eliot Spitzer took a lot of bad people out of circulation, including some high finance types usually thought untouchable. That should not be taken away from him. New Yorkers can be grateful. Advocates for market fairness say he’s done more to clean up Wall Street than anyone else in decades.”

Eliot’s undoing was sexual misconduct, but it now appears that the financial world could have used 1000 more Spitzers, as opposed to dumping the one they had. Even if every one of them cheated on their spouses. Look, he wasn’t put there to teach Sunday school. His mission was to kick butts.

It now is clear that there were many whose butts needed kicking. More butts than even a thousand Spitzers could have managed, even if he knew which ones to kick and which ones to leave alone (an unclear assumption). As this post is being written, Henry PaulsonBlog_pictures, former Goldman Sachs CEO and now Treasury Secretary, is telling Congress that all the financial world’s wheeling and dealing has gone bust and that (without penalizing the ones who ran it aground!) the taxpayer has to bail them out. It’s a massive bailout he wants, to the tune of $10,000 per American household! On top of debt the public has already assumed from Fannie, Freddie and AIG. Congressmen are taking turns to vent, the way they do, but in the end, we all know the deal will pass, or some close modification, because the apparent alternative is another Great Depression. Once again, the Economist nailed it. Their latest issue’s cover is a portrait of Paulson pointing, just like on those Uncle Sam recruitment posters, saying “I Want Your Money.”

Seeing it all play out in Congress, it’s hard not to think of that description from Micah 7:3.

the ruler demands gifts,
the judge accepts bribes,
the powerful dictate what they desire—
they all conspire together.
         RVS

Or, as the English Standard Version puts it….

the prince and the judge ask for a bribe
and the great man utters the evil desires of his soul
thus they weave it together.
   

The great men, through their greed, have broken the system and look to the public purse to get them funded again. Up to the final months executives were distributing billions in bonuses among themselves, exorbitant rewards for failure! The prince and the judge aren’t happy about it, of course, but they’ve long played ball. They’ve made laws allowing the mess to mushroom. They’ve formed regulatory bodies that have watched it all develop. Some have taken huge lobbyist payments from the great men….can it be said they are they “bought and paid for?“ As Micah says, they all weave it together. (ESV)  Or, as rendered in the Revised Standard Version, they conspire together.

A co-worker of mine spotted two huckster scruffy-type guys on the internet (did he really call them “douchebags?”) who would buy up mortgages and immediately flip them to large institutions. Anything they bought they could sell….no questions asked. So much money was to be made through commissions and inventive accounting that underwriting standards sank lower and lower, and in the end vanished completely. Like a bartender pushing drinks on drunk patrons, the industry pushed mortgages on people who clearly couldn‘t afford them, people who counted solely on the prayer that their property would increase in value. Meanwhile, these two guys blew every dime they made….sometimes $100K in a week!….on penthouses, women, cars and so forth.

Mortgages they, and thousands like them, traded were massed into huge collateralized debt obligations and peddled to financial institutions the world over. The promised cash flows showed up as assets, masking the shaky debts they really were, on accounting books. Sounder debts were steadily watered down with junk until, in time, nobody knew what they were buying, but the commissions and paper profits were so lucrative that they kept buying anyway. Leveraging made it all the more dicey.

It all worked until it didn’t. Word flashed about that folks were defaulting, property values were falling…..and….who could have foreseen?…those debt obligations might not be worth a fraction of what they were sold for. It’s not as though the free market had ever determined their value…..they’d all been priced rather arbitrarily. Suddenly nobody wanted these CDOs anymore. The hucksters were stuck with a million in mortgages they could neither sell nor service. They panicked and bolted their doors.

No doubt, that’s just a small (and oversimplified) chunk of a mountain of mayhem.

So the huge bankers (HB&B….Huge Bank and Broker, Bill Cara calls them) fell over the precipice and look to the general public to pull them out. World finances go down the tubes if the answer is “no.” As I write this, it’s by no means clear how this will all play out. There’s hope the bailout will stem the blood flow, but is it perhaps the first of many? And the long-range implications for the taxpayer and generations to come are not pleasant to contemplate.

Where is Eliot Spitzer when you need him? It would have been good to have him around, if only for the sake of the fireworks. But in the end, would even 10,000 Spitzers have turned the tide? In this system “that which is crooked cannot be made straight.“ Greed almost always wins out, spoiling humankind’s better accomplishments. Not too long ago I was speaking with one of those optimistic atheists, the youthful type who imagine human science and wisdom will solve all problems. He gushed “things have, by nearly every measure, gotten better as time progresses.” I replied that I could think of some measures by which they have not.

Watching televised hearings these past few days, I’ve just thought of another. This week has not been kind to those who put their trust in human efforts.

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Tom Irregardless and Me             No Fake News but Plenty of Hogwash


On Day 439 Everything Changes: From Spitzer to Peterson

Taunters are taunting me. “What’re you going to do with your Eliot Spitzer category, Sheepandgoats, hmmm? It’s right there on your front page. What you going to do, now that he’s gone down in flames?….sigh….Oh, very well. I guess we can close out the category. He’s been such a colorful character, and local, that I just had to post a few times about him, here, hereand here.

“On Day One, Everything Changes!” That was the promise following his crushing (69%) victory to become New York State Governor. We all waited for day one to arrive - he was almost a messianic figure. He’d nailed several Wall Street firms with billions of dollars in fines and sent some fat cats to jail. The Sheriff of Wall Street, he’d been nicknamed. Some pictured him a future President. What he did with corrupt financiers surely he could do with the obstructionist politicians that plague New York! But on Day 439 everything changed in a way he hadn’t foreseen, or anyone else. He was caught with prostitutes and  resigned in disgrace. Cheers broke out on the NYSE trading floor [!], and  prices soared*, temporarily snapping a dismal down trend.

*perhaps not for that reason, though there are pundits who maintain it was exactly for that reason.

These were no ordinary prostitutes. The one that triggered his downfall cost him $4300. For a single stand! Who would have thought they could cost so much? Had he economized with cheaper ones he might have escaped detection, for he had to transfer large sums of money to various shell corporations to pay the bill… allegedly $80,000 through the years! Now, in the United States, if you transfer $10K or more from a bank, that bank must notify the feds. And you can’t bust up the transfers into lesser amounts to avoid the $10K trigger…that’s a crime here, and that’s what they say Spitzer did. They dreamed up that law to thwart terrorists. But it’s netted many unintended victims, like philandering politicians. Crossing state lines to promote prostitution is also a crime here (the Mann Act).

Spitzer resigned on TV, wife at his side. “I cannot allow for my private failings to disrupt the people's work. Over the course of my public life, I have insisted — I believe correctly — that people take responsibility for their conduct. I can and will ask no less of myself. For this reason, I am resigning from the office of governor." The couple has three teenaged children. The wife’s plight provided silent ammunition for those feminists who say that a woman should never, ever, put her career on hold  (which Mrs Spitzer had done, sort of) for the sake of raising children - you just can’t trust husbands and when they go bad you’re behind the 8-ball.

Learned psychological types, the sort who buy into evolutionary psychology, quickly weighed in. At last we know the real reason for Spitzer’s zeal in crushing wrongdoers, they lectured knowingly. It was all a sham! He’s just an alpha male, with all the vulnerabilities of the species. And what about the prostitution rings he’d broken up? Even more Freudian: he was just exorcizing inner demons, purging his own soul through nailing others! But I’m not so sure how valid that argument is, or how relevant. After all, he was elected to knock heads together, not to teach Sunday School. Still, once exposed, he hadn’t a chance. Americans want their politicians squeaky clean, a reflection of what they imagine themselves to be.

Besides, his “knocking heads together” style hadn’t worked well of late. Opposing politicians aren’t like corporate shysters whom who can throw in jail. They get mad, and they fight back. Though Spitzer scored some impressive early wins, he later bogged down amidst a style so abrasive that there was nobody to stick up for him when he got in trouble.

I’m not so sure the abrasiveness was wrong. At any rate, what had proceeded it sure hadn’t worked. New York is well known among states for its dysfunctional government. Years ago then-Governor Pataki appeared on TV with leaders of the two opposing parties. He hoped to project the image of firm and steady moderator, guiding these powerful but noble opponents to a consensus for the lasting good of New Yorkers. Instead, the two foes squabbled like children, and Pataki looked like an ineffectual ass, the other parties themselves being immune to embarrassment. The governor steered clear of TV after that.

With Spitzer’s resignation, state leadership defaulted to David Peterson, the Lieutenant Governor. Unexpected, the politically correct media had something to swoon about, for not only is Peterson black, he is also blind. A new category! He’s black and he’s blind, they gushed, as if one quality somehow augmented the other. Plus, he’s amiable. He gets along with everybody, they gushed again, forgetting that a year ago they had praised Spitzer for his being the exact opposite.

No sooner had Peterson been sworn in than he, too, confessed to some extramarital affairs. He wasn’t going to be blindsided the way Spitzer was! But all was cool with the media….he’s black and he’d blind, after all, and he enters with lots of good will. We’ve never had a black and blind governor! Besides, his marital woes were more garden variety. He hadn’t broken any laws, and he hadn’t hired any prostitutes.

A week later he admitted that in his younger days he had used marijuana and cocaine.

Alright, Mr. Peterson, don’t push it! Sure, Bill Clinton smoked (but didn’t inhale) pot and George Bush drank (but didn’t swallow) booze, but you’re only a governor. He’s probably okay for now, but one more Oprah confession, like shoplifting at K-Mart, and he’s outta here.

As NYS Attorney General, Eliot Spitzer took a lot of bad people out of circulation, including some high finance types usually thought untouchable. That should not be taken away from him. New Yorkers can be grateful. Advocates for market fairness say he’s done more to clean up Wall Street than anyone else in decades. For that, anyone who invests can be grateful. Still, I confess I wondered a bit when I read about the Theodore Sihpol casein the Wall Street Journal.

Mr. Sihpol wasn’t a Big Guy, at least not in the financial world. He was mid-level. He had allowed a hedge fund to secure some closing prices after hours. There was no price favoritism. The fund got the closing prices, but it was after hours. Spitzer’s office threw everything they had at this fellow. He might even had settled, but the plea bargain they offered included jail time. So he fought back. At trial, his attorneys called no witnesses. They simply read the law. And it was clear he’d not broken any! Case dismissed.

Now, what are we to make of this apparent abuse of power? You can’t make omelets without cracking a few eggs? But as George Orwell said, any time someone uses that line on you, you should immediately ask to see the omelet.

All in all, it’s rather a sad story. Isn’t there some scripture somewhere about humans not being able to rule themselves?

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Tom Irregardless and Me          No Fake News but Plenty of Hogwash


We Love Our Kids and are Crying

There were nine of them. They were best of friends. They were all girls. They were all graduates - class of 2007, Fairport.

Before going their separate ways for the summer, and then off to this or that college, they'd planned this one last outing. One of the girls' parents had a cottage on Keuka Lake. A great place to lounge and relax and swim and sunbathe for a day or two. They traveled in two cars; five in the first and four in the second.

Was it the vehicle? Was it speed? Was it inexperience? Was it distraction? The lead car swung into the oncoming traffic lane to pass a slower vehicle. That done, it swung back to its own lane. Then - for whatever reason - it swerved again into the oncoming lane, and smashed head on into an oncoming tractor-trailer. Both vehicles exploded and the flames reached 50 feet, burning through cable and telephone lines. The second car stopped at once, but no one could get near for the heat. They could only watch.

As word of the 10 PM crash spread, nearly 100 classmates and family gathered at Fairport High School. David Paddock, the school principal said they watched the sun rise together. "The sun came up," he said. "I'm not sure we all thought it would." The next night several hundred people gathered for a candlelight vigil. "It's a community nightmare....I'm personally devastated," Paddock said. "Our hearts are broken. We love our kids and are crying." Several thousand attended weekend calling hours at the school gym (four of the five had been cheerleaders).

By chance, Governor Eliot Spitzer was in town to chew out state senators for skipping out of Albany for the summer, leaving important work undone. But the local senator, Senator Alesi, would not be chewed out. He cited the tragedy: "I think it would be insensitive to get embroiled in petty partisan politics at this point." Spitzer had beat him to it, however, condolence-wise: "We are suffering with the emotional agony of the tragedy of the students. It just does make your blood run cold. It makes you appreciate every day you have with your children. Our condolences go out to families and those who are touched by this — our hearts go out to all who are touched by this."

Stories and follow-up stories ran for days and days and aren't done yet. The local paper questioned why the vehicles should have erupted in flames; maybe they should have been designed better. Had they been, and had passengers been belted, maybe some would have survived. This, at a combined head-on crash speed of 120 MPH!

Bloggers blogged for days, just like I'm doing now. "Why did God have to take our girls?" one person asked. "We needed these angels here on earth!" And somewhere, without a doubt, some dopey preacher was offering exactly the same obscene "comfort": God was "picking flowers,"and He needed the best.

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Tom Irregardless and Me               No Fake News but Plenty of Hogwash


Pool Alarms and Parkinson's Law

The legislators of New York, eager to safeguard us all, have decreedthat, from now on, any new swimming pool deeper than 2 feet must come equipped with an alarm that will raise all hell inside & outside the house should someone (or something) fall in. Thus, Rochesterians who live in the poverty zone (trust me, there are many) who have no air conditioning but several broiling kids, who used to cool them off on a hot day with one of those cheap, inflatable pools, are now protected from that relief, since the price of an alarm exceeds the price of the pool. We just snapped a short spell of 90+ degree weather, with obscene humidity, the first of many this summer. In the air conditioned Albany State Legislature, some legislator is hero of the day. "If it saves one life, it's worth it!" he says. 

Trouble is, there's not many things that won't save at least one life. What of the imposition for everyone else? Mind you, I have nothing against pool alarms. They seem a good idea. It's the mandating of pool alarms!

Folks who remember when you could ride a bicycle without a helmet, indeed, even drive a car without a seatbelt, may need help to know what to make of this. That's why this post is written. In Europe, by the way, where they bicycle far more than we do, nobody wears a helmet. "It would muss up my hair," explained one Frenchman to the Wall St Journal.

This new pool alarm requirement must be looked at in the light of Parkinson's Law, (the 2nd one) which suggests that, having utterly failed to acheive anything of real value, officials nevertheless must justify their existance. Therefore, they redouble their efforts to accomplish nonsense.

Parkinson's Law, derived in the 1950s by C. Northcote Parkinson, is actually a body of business and organizational laws which are usually stated in economic terms, but can be amended to fit swimming pools. The law which specifically applies, the 2nd law, states that the time and money spent on any item in any organizational agenda is inversely proportional to its importance. In his definative book "Parkinson's Law," Dr Parkinson illustrates his second law with a business board meeting:

The lead item on the agenda is a nuclear reactor for the company plant. It is approved immediately, not because it is a good idea, indeed, it is suspect, but because few people on the board know what a nuclear reactor is, and those who do have no idea what one should cost. The two people who do know something have no idea where to begin with explanations. They would have to refer to the blueprints. No one present can read blueprints, yet no one present would ever admit they could not!  Easier just to say "yes." The reactor is approved.  Time spent: about 2 minutes. However, several members have inward misgivings. They wonder if they've really been pulling their weight. They resolve to make up for it with the next item.

The next item is a bicycle tool shed for the employees. Here is something most can get their heads around. They bicker over its design, its materials, its location, indeed, even its necessity, since the ungrateful employees only take whatever you give them and demand more! Time spent: about 1 hour.

The next items concerns the coffee that is served at board meetings: its brand, supplier, and cost. No one is present who doesn't know all there is to know about coffee, and the ensuing discussion lasts the rest of the day!

Now, if we postulate that Parkinson's 2nd law applies, and that requiring pool alarms is an accomplishment relatively trivial, then there has to be some "big fishes" that got away. Are there?

The day before the local paper reported on pool alarms, it reportedon a new "academic excellence" surcharge for nearby SUNY Geneseo State college. The surcharge, which kicks in a year from September, adds $1000 to the annual tuition of $4350, a 23% increase! Where one SUNY college goes, soon the rest can be expected to follow. Lawmakers are clearly not interested in saving that "one life" of a poor child so that he may attend college!

Besides the bruising economic threats people face, there are the ever-growing threats to education quality, public morality and decency, even threats to spirituality. All these areas are ignored while legislators piss away their time on physical safety, a comparatively insignificant area which even a Frenchman knows how to keep in proper perspective so as not to muss up his hair!

As if to underscore the point, New York Governor Elliot Spitzer is crisscrossing the state, challenginglocal citizens to play "Where's Waldo" with their state senator. He'll hold up a picture of the empty Senate chambers. "Where is your Senator," he asks. "He's not here. We've looked all over." He's mad because Senators voted themselves a pay raise and then took off for the summer, leaving stuff on the plate. Important stuff. Necessary stuff. Fundamental stuff. (Most importantly) Stuff Eliot vowed to get done.

They did, however, make it tougher for poor kids to cool off. And that's something.

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Tom Irregardless and Me    No Fake News but Plenty of Hogwash


Eliot Spitzer and Jesse Ventura

Sometimes celebrities run for office and, if elected, they make for the best leaders, or at least they're the most fun to watch. Like that pro wrestler, Jesse Ventura, elected Minnesota governor a few years back....remember him? Voters might have asked: can he really do better than professional politicians? But they didn't. They asked: how can he do worse? Minnesotans, briefly basking in national attention, sported bumper stickers boasting "My Governor can beat up your Governor." When they asked Jesse about it, he agreed. He'd been to a Governor's conference. He'd looked those guys over, he told us, and there wasn't one of them he couldn't whip. But he was not so triumphant with the media, with whom he fought all the time. He spoke his mind, and that's probably why he fought with them all the time.

For example, on religion: "Organized religion is a sham and a crutchfor weak-minded people who need strength in numbers. It tells people to go out and stick their noses in other people's business."

Or on promoting the Pledge of Allegiance in the schools (he opposed it): "I believe patiotism comes from the heart. Patriotism is voluntary. It is a feeling of loyalty and allegiance that is the result of knowledge and belief. A patriot shows their patriotism through their actions, by their choice. No law will make a citizen a patriot."

David Letterman asked him on TV which of the Twin Cities was better: Minneapolis or St. Paul. Now, any politicians knows that you have to play cute and say syrupy drivel about both towns, even if they both stink to high heaven. Jesse answered: "Minneapolis. Those streets in St. Paul must have been designed by drunken Irishmen."

Such blunt remarks....there's others, too.... made him an easy target for the media. They treated him as a big joke, so he called them "media jackals." When they sought access to the governor's press area they had to show their press pass which, per Jesse's decree, identified each one of them as a "media jackal."

He only served one term, but said he would have run again had it not been for family considerations. The media pestered them always, he charged, ignoring policy issues so that they could wallow in cheap gossip.

Frankly, the more I read about this guy, the more I like him. He reminds me of Mickey Spillane.

So that was Jesse. Here in New York we have Eliot....Eliot Spitzer. Is he cut from the same cloth as Jesse? He didn't crack skulls in the ring, of course, but he sure did on Wall Street, fining lots of white collar crooks and sending a few to the Big House. Like Jesse, Eliot doesn't hesitate to speak his mind; decorum-laced politicians and media types are incredulous at his outbursts, to the point of questioning his sanity. "I am a [ahem] f**king steamroller and I'll roll over you or anybody else," said he to an opposing Assemblyman, according to the New York Post.

And..... "I've done more in three weeks than any governor has done in the history of the state." Not real modest, and chiding reporters quickly trotted out lifetime accomplishments of other governors, like DeWitt Clinton, the one who dug the Erie Canal 200 years ago. How's that for lifetime accomplishment, Mr. Spitzer, they nyaah nyaahed, as if imagining Clinton had dug it personally (which he did not).  At a news conference they asked him whether his words were overly boastful. "No," he answered, Next question."

Still, you don't want to mess with Eliot. He has done a lot in a short time, he's hugely popular, just like Jesse who enjoyed a 73% approval rating, and New York State is almost on the embalming table. Everyone knows it, so they don't mind a guv who'll crack the heads of those who put it there.

The really big battles are still shaping up. Mr. Spitzer's 2007 State budget, the one that's due April 1rst, though previous budgets have been as late as six months, sending all State agencies and schools into conniptions, proposes cuts of $1.2 billion in health care, mostly from Medicaid, hospitals and nursing homes, with increased emphasis on preventative care. Now, lest anyone think that Eliot is just a mean spirited miser, it should be noted that New York leads in Medicaid spending and spends more than the next two states combined. Even with the new cuts, the budget is a 9 percent increase over last year, says the new state comptroller Thomas DiNapoli. That's almost two times faster than revenues....and 2 and a half times the rate of inflation. It's unsustainable, says DiNapoli, who as comptroller, may turn out the be a major Spitzer asset, even though the latter opposedhis appointment.

Former Governor Pataki tried to rein in health spending, but it's hard to do. The hospital and health care workers unions saturate TV and radio with tearjerker stories of sick, neglected people, and it's game over. Pataki, in the end, learned to shut up and sign the check.

"Eliot Spitzer says he wants to reform health care, and he's right! But he's going about it the wrong way." This was the health worker union's first TV salvo. Trust me on this: the "and he's right" is only because it was Eliot Spitzer. They never did it for Pataki. But mess with Eliot and you mess with the people who like him, which is nearly everyone.

Spitzer was not in the least appeased by "and he's right." He served up his own TV ad. Set in a hospital nursery full of babies crying.....they were crybabies.... the narrator spelled out facts about New York's bloated system, full of fraud and waste and huge salaries for the top dogs.

The next round of ads was predictable. Televised health aides, almost in tears, sniffling why does the governor wants to hurt them, when they work so hard and save lives!

There's lots more to come. Mr. Spitzer and Joseph Bruno, the Senate Majority leader, a firm ally of the hospital people, got into a screaming matchthe other day in the Senate chambers. Even F-bombs were flying! A scared secretary took cover and fled the room.

Yes, there's more to come.

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Tom Irregardless and Me             No Fake News but Plenty of Hogwash


Eliot Spitzer and the Comptroller

Like in Network, Eliot Spitzer is mad as hell and he's not going to take it anymore! The odd thing is that he's not taken it very long. It was just 6 weeks ago that Spitzer was sworn in as governor, wearing his new Hickey-Freeman suit. But it's clear he means to make his mark. Cross him at your peril

The big blowup comes after Spitzer fired the former state comptroller, caught with his hand in the till. He then assembled previous state comptrollers to recommend new candidates. The state assembly said they'd go along, but then they reneged and gave the job to one of their own.

Spitzer was spitting nails. The Assembly's move showed a ‘‘stunning lack of integrity that is deeply troubling ... You have just witnessed the insider game of self-dealing that unfortunately confirms every New Yorker’s worst fear and image of all that goes on in the Legislature of this state,” he fumed. There was some party coming up....some get-to-know-you wing ding with Assembly members. Spitzer cancelled it!

It's an odd place to pick a fight. Yes, he lost the skirmish, but it's a petty skirmish. The Assembly's constitutionally empowered to do just what they did....choose their own guy. Moreover, the guy they chose gets high marks all around, and seemingly fits in well with Spitzer's reform program, except Spitzer didn't think of him himself.

No matter! Spitzer is here to kick some butts. And New Yorkers agree that butts need kicking, even if their not really sure....who actually follows state politics?....exactly which butts need it most. This is the Assembly that has presided over an ever more hopeless basket case mess-of-a-State, and the perception, right or wrong, is that these guys care for little else than protecting their own turf. So New York's indebtedness is second only to one other state, it's taxes are second to none, Medicaid expenditures are twice the national average, businesses can't leave fast enough, and the school graduates behind them. Only once in 16 years has the annual state budget passed on time...it's been up to six months late....these guys stake out territory and refuse to budge. Schools and municipalities can't do their own budgets, not knowing what aid they'll get from the state. Witty New Yorkers say things like (trust me, I know) "Last one out of New York, turn out the lights." The former governor tried to address some of these problems and these guys handed him his head. He learned to shut up and smile.

Rochester's quirky Bob Lonsberry suggests that Spitzer should have been more conciliatory. These guys (the Assembly) aren't going away, he points out, and unlike Eliot's former Wall Street foes, you can't throw them in jail or run them out of business. But it may be that Spitzer thinks nothing will change if he simply plays the game nice. No, Mr. Spitzer was elected in a landslide. He has lots of good will. The assemblymen have none. Many would agree with Ed Rooney .... "I’m all for a tyranical dictator. The beauty of hitting rock bottom is that you have no where to go but up."

Meanwhile, journalists are stocking up on popcorn. It's gonna be an interesting few years.

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Tom Irregardless and Me            No Fake News but Plenty of Hogwash


Elliot Spitzer and the Garbage Plate

Hickey Freeman was not enough! Elliot Spitzer has selected another Rochester icon to usher in his inauguration day this Monday…the Garbage Plate. Seems when he was in Rochester his wife sampled this bit of local cuisine just after or before Mr. Spitzer bought his new suit, and decreed it must be on the Big Day Menu.  If she ate the whole thing, she’s 20 pounds heavier now. A “gut-busting” local favorite, it’s a hot dog or hamburger under home fries, macaroni salad, baked beans and meat sauce. It’s a Rochester legend, as is Nick Tahou’s, the restaurant where it was invented.

When the old man (Nick) was alive there was just one restaurant, open 24 hours, in the rugged part of the city. Sheepandgoats worked in the suburbs during the B shift, and rubbed shoulders with all the suburban wannabe toughs who maintained that they were tough, and as proof, cited that they were not afraid to venture into the city, at night, to grab a Garbage Plate at Tahou’s! Of course, it wasn’t really that big of a deal. Sheepandgoats, who for many years lived in the city and consequently, to a mild degree is "streetwise",  did not consider a nocturnal visit a test of manhood, but such was the reputation.

When our buddy Derrick ran the 5K race, he finished, more or less, last, but we were all proud of him on account of the effort. We went to celebrate at Nick Tahou’s ordering Garbage Plates all around. They needed cranes to get us out of there.

Mr. Spitzer’s new Hickey Freeman suit provides Rochesterians with an early warning of his intentions, but not necessarily his ability. Now the Garbage Plate has come to the rescue! If Mr. Spitzer wears his Hickey Freeman suit, which he said he would do, subject to assorted disclaimers of my previous post, and he eats 3 or 4 Garbage Plates, which he must do to make us happy in Rochester, and he does not slop any of it on his new suit, then he can do anything! Everything will indeed change, as he has promised, the only possible exception being his unspotted suit!

Spitzer watch here.

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Tom Irregardless and Me           No Fake News but Plenty of Hogwash


Elliot Spitzer's New Suit

You would think the Messiah was coming. “On Day One, Everything Changes!” pledged the campaign ads. Voters loved it, because it was Elliot Spitzer and he’d made a ruckus on Wall Street, sending some rich people to jail. He trounced what’s-his-name to become New York State governor. They swear him in January 1, amidst high expectations. But can he keep his promises?

Politicians don’t always keep promises and when they don’t you can’t necessarily conclude you‘ve been lied to, though that always possible. Sometimes, once in office, they learn new things that cause him to reflect how ridiculous their  promise was in the first place, and so they change it. Or their heartfelt promise dies when they go toe to toe with some fathead who has promised just the opposite and there’s no guarantee your guy won’t get outmaneuvered. But with Mr. Spitzer, there is a canary in the coalmine, an easy-to-keep promise that will reassure us as to his future intentions. And it will actually happen “on day one.”

Just after winning, Mr. Spitzer visited Rochester, where Sheepandgoats lives. He met with the mayor, said some nice things, and toured Hickey Freeman. Hickey Freeman manufacturers men’s suits, expensive ones that are sold on Fifth Avenue in Manhattan. Rochester used to have a lot of such manufacturers, but they’ve all moved or gone belly-up. H-F updated their facility in the city’s depressed sector and stayed. We admire them. The state must do more to accommodate business, Spitzer said, and then he bought a new suit, and promised he’d wear it on inauguration day (Day One). Many heard him say it. It was in the newspaper.

So we’ll soon know. If he wears it, all is well. If he doesn’t….well then…like the Who…we got fooled again.

Of course, we must be careful not to quickly jump to conclusions if he doesn‘t wear it. Maybe he will spill taco sauce on it, just like I do on my suits, and so it will have to go to the dry cleaners who won’t get it back on time. Or maybe he will kiss a baby, the way politicians do, and that baby will puke on him. Indeed, at the Kingdom Hall, you can often spot a new Dad by the puke marks on his suit, but would you show up for inauguration like that? You would not. So Mr. Spitzer has some wiggle room.

Still, early signs are troubling. The Democrat and Chronicle’s staff writer Joseph Spector covered Mr. Spitzer’s Hickey-Freeman visit and reported he said (November 16th D&C issue) he’d wear the suit. But now I see a friendly blog from Andy [Spitzer’s Day One] who reports Spitzer said he will likely wear the suit!  And the original D&C link is now dead.

Uh oh.

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Tom Irregardless and Me           No Fake News but Plenty of Hogwash