Saturday, June 26, 2010

The Creative Destruction of Capitalism: Part II

Whatever happened to?

Hoover Vacuum Cleaners
Singer Sewing machines
Friden Calculators
HP 65 calculator
Gestetner Duplicating Machines
Kodak Brownie cameras
Air Stream
Indian Motorcycles
Burma Shave
Heath Kit
Discount Records
Tower Records
Tape Decks
8 Tracks
Transistor Radios
VHS Tapes
Packard Bell
Princess Phones
Carte Blanche
Saturday Evening Post
Police Gazette
Pan Am
North Central
Peoples Express
Ames department Stores
Montgomery Wards
W. T. Grant
E.J. Korvette
Pace Club
F. W. Woolworth
S.S. Kresge
S.H. Kress
S & H Green Stamps
Builders Emporium
Burger Chef
Howard Johnsons
Horn & Hardart
Fred Harvey
Match Box
Bethlehem Steel
Inland Steel
National Steel
Republic Steel
National Steel
Jones & Laughlin
Wheeling-Pittsburgh Steel
Youngstown Steel
Carte Blanche
Boone’s Farm
Funk & Wagnalls
American Flyer
Lincoln Logs
Tinker Toys
Slide Rules
Fridan calculators
Remington typewriters
Tire tubes
Buggy whips

Joseph Schumpeter and the Creative Destruction of Capitalism Should Be Taught in College

Schumpeter Should Be Taught in College

Joseph Schumpeter (1883-1950) is one of the greatest economists of the 20th century.

Born in Moravia in the Austro-Hungarian Empire, educated in Austria, he was a Professor of Economics at Harvard from 1932-1950.

As a conservative economist during the Depression, he was overshadowed first by the flamboyant John Maynard Keynes at Cambridge. Keynes gave us the theory of priming the pump to get us out of the Depression. It failed, as did all the subsequent pump primings in recessions, as it is now in Greece, Spain, and Portugal..

The Obama Administration has practiced Keynesian economics and pump priming to the extreme with disastrous results. Prime Ministers Merkel of Germany and Cameron on Great Britain have just told President Obama “No more internationally you won’t.”
The past two years should finally inter Keynes.

Schumpeter also had a famous colleague at Harvard, John Kenneth Galbraith, who was the oracle for the New Industrial State. If only Galbraith had lived just a little longer to see his views fully implemented by President Obama, and again with disastrous consequences.

Joseph Schumpeter was the apostle of capitalism, but the reluctant prophet of the rise of the social welfare state.

Schumpeter’s first contribution to capitalism was to coin the word “entrepreneur” and praise the role of the entrepreneur in the rise and success of capitalism. The successes and innovations of entrepreneurs fuel economic growth. Without entrepreneurs and innovation, an economy will, at best, stagnate and be stationary.

Like Keynes, Schumpeter was a student of business cycles, which we also sometime refer to as a boom and bust cycle. He credited the entrepreneur for much of the business cycle.

For example, millions of Americans have replaced their older TV’s with HD TV’s, but at some point retailers will be flooded with unsellable HD inventories.

The corollary of the innovative entrepreneur and creative capitalism is the creative destruction of capitalism: “Creative destruction is the essential fact about capitalism.” The new innovations, the new industries, the new products would result in the demise of older industries. A quick example is the rise of desktops and laptops with typewriters becoming antiques. So too with the old calculators and slide rules. The HP 65 doomed them.

In essence, capitalism reallocates resources to the new, growing industries from the aging ones. It’s Darwinian.

Thus, society and government should encourage the entrepreneur.

And yet, Joseph Schumpeter also predicted the rise of the social welfare state and the ultimate collapse of capitalism. He foresaw the rise of the intellectuals with their jealously and opposition to capitalism. Think of how liberal, especially in the humanities and social sciences, that the universities are. In turn, the professional classes, lawyers, doctors, and the like, also become hostile to capitalism. Again, think of the Obama Administration.

As the entrepreneurial and capitalistic class begins to shrink in size, politicians increasingly reap votes by giving out governmental favors, such as entitlements. Social Democrats in Europe, and Democrats in the United States, become the favorite political class and the party of the welfare state and government.

The restrictions, regulations and limitations on business grow, thereby restricting economic growth. Think of the 2,409 page Health Reform Act, which quasi-nationalizes the health industry, and imposes onerous restrictions and taxes on 1/6 of the nation’s economy, as well as the 2,000 page, give or take, Financial Reform Bill, the details of which Senator Dodd has told us we will not know how it works until after it’s enacted. Speaker Pelosi said we had to enact the Health reform Bill to learn what’s in it. Actually, we will not know what’s in the bills until after the new and expanded bureaucracies issue their rules and regulations, followed by years of litigation.

Business does not invest with these Swords of Damocles hanging over their heads.
Sounds familiar, doesn’t it?

Schumpeter unfortunately is not taught in many economic programs, which helps to explain how so many economists get it wrong.

Tuesday, June 22, 2010

California Bureaucrats Fight Earthworm Dung

Farming comprises a myriad of products. We have beef, and apples, and pork, and oranges, lemons and wheat, corn, potatoes and rice, nuts and berries, melons, poultry, and soybeans.

And then there are earthworms, which can be sold in bulk as bait or to farmers, professional and DYI’ers.

George Hahn is an entrepreneur. He harvests the earthworm dung, the droppings, the feces, the excrement, packages it, and sells it as Worm Gold, a natural, organic fertilizer.

As we know, going back to the studies of Charles Darwin, earthworms are a rich, natural fertilizer. They can strengthen the natural resistance of plants to bugs.
They also aerate the soil. Earthworms and their droppings do not kill bugs. They have no direct effect on the bugs.

Hahn seized upon these virtues of earthworm dung to market it as a natural fertilizer, reaping $1.6 million in sales from April 2003 to June 2005. That’s a pile of worm dung. I have no idea what the price per gross is. He has registered his products with the state of California as “fertilizer.”

And then the bureaucrats, in the form of the California Department of Pesticide Regulation pulled a stinker in 2007. It accused Hahn of marketing a pesticide and levied a $100,000 fine last fall for not submitting his product to the Department for years of extensive, scientific testing.

As I understand the suffix “cide,” it means to kill, such as homicide, pesticide, rodenticide, herbicide, spermicide, or suicide.

The State Department of Pesticide Regulation though claims an expansive definition of “pesticide” to include anything that’s promoted to help a plant resist or repel any pest. That definition, of course, would include water and sunlight, and perhaps throwing a few geckos into the garden..

These are bureaucrats. The United Farm Workers contend their sons and daughters are dying in the Central Valley because of pesticide poisoning. The Department is not doing anything about the real victims of pesticides. Instead, they flyspeck worm crap at a tremendous waste of state money and resources.

A state, which is going bankrupt, is obsessed with worm dung, making a mountain of dung out of a mound.

How symbolic!

Maybe the agency thought Hahn would roll over when confronted with the full weight of the state. A worm dung farmer should stand little chance against the colossus of the state.

Instead, he enlisted the help of the Pacific Legal Foundation, which exists to vindicate the rights, especially property rights, of landowners and others against expansive state and federal intrusions.

Represented by Chapman’s alum, Tim Sandefur, Hahn filed suit against the agency, stopping the fines, at least for now. Tim has publicly airated the agency's dip into the dung.

Here's hoping Tim wins one for the wormer.

Sunday, June 20, 2010

A Day in the Life of Tony Hayward

Tony Hayward got his life back yesterday, and was excoriated for it. The CEO of BP just can’t catch a break.

After 2 months of public penances, press conferences, Presidential demands, administration threats, Congressional hearings, and PR gaffes, two days after his Congressional inquisition, one day after (maybe) being replaced as the day to day manager of the response efforts, the haggered Hayward earned, indeed needed, a day off.

So he flew to England to watch his 52’ American built yacht, Bob, race off the Isle of Wright.

What must he have been thinking while at sea? Could he escape the Gulf? Did he perceive the irony of escaping from the sea to the sea? What was his advice to his son?

Was he texting? How about updates on the response?

Did he hear on the BBC that John Lennon's original lyric notes for A Day in the Life sold for $1.2 million?

And did he think of the “small people” in the Gulf, who lack the luxury of taking a day off on a yacht as they struggle to save their beaches and businesses, as he inhaled the refreshing, clean sea air?

White House Chief of Staff Rahm Emanuel took a cheap shot at Hayward, stating that this is “part of a long line of PR gaffes and mistakes” made by Hayward. Emanuel continued “I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting.”

Rahm Emanuel forgot to mention that as he was attacking Hayward for taking a day off at the races, his bosses, President Obama and Vice President Biden, were golfing. Indeed, President Obama has played many rounds of golf, attended a concert, skipped Memorial Day at Arlington, and engaged in political fundraisers, such as for Senator Boxer in California, in the past 60 days while concerned every morning about the blowout and the jobless.

Remember, President Obama is in charge.

At least Rahm Emanuel did not call Tony Haywood a “f…ing retard.”

The Congressional hearings on Thursday required Hayward to sit there and incur the Congressional abuse, led by the Grand Inquisitor, Congressman Henry Waxman. With the exception of Texas Congressman Joe Barton, every Committee member, Democrat and Republican, was going to score points at the expense of the hapless Hayward in the Congressional kabuki of “Rope a Dope.”

The cry two years ago was “Drill, Baby, Drill.” Now it’s “Grill, Tony, Grill.”

Hayward was pilloried for being evasive, non-responsive, and denying responsibility for the drilling decisions on the rig, but displayed an exemplar of being lawyered up. BP is facing criminal indictments. Hayward was undoubtedly counseled not to commit perjury or admit to charges that could disadvantage BP legally.

Thus, he was non-responsive, just as Solicitor General Elena Kagen will follow the precedence of the recent Supreme Court appointees in their Senate Judiciary Committee hearings of being non-responsive to the Senators’ queries.

BP may be the largest oil and gas producer in the United States, but neither BP nor Tony Hayward understand Americans. Hayward cannot relax while the Gulf is hurting.

Tony Hayward is the public face of BP. He cannot return to private life until he
resigns, is terminated, or the hole is capped.

Tony Hayward has no private life, and that is his fate every day in his life.

Thursday, June 17, 2010

Does BP Get Due Process?

Does British Petroleum get due process?

Absolutely not

IS BP constitutionally entitled to due process?


Is President Obama acting outside the law?

Definitely yes.

Is President Obama denying BP due process of law?


Will BP receive due process?

Only if it litigates.

This is too good an opportunity for the President, the Green Movement, and the anti-oil Democrats.

BP is to be pilloried and skewered with cash being pumped out of the British company to distribute throughout the depressed Gulf region.

Don’t get me wrong. BP screwed up royally and should be liable for its negligence or gross negligence. The liability will be great, perhaps exceeding BP’s assets.

I have no sympathy for BP, but great respect for the Constitution and due process.
Ours is a nation of law, and not individuals or executive fiat. BP is
constitutionally entitled to due process before being liable.

We have three branches of government under our constitution: the Legislative, Executive, and Judicial.

The legislative enacts the laws which are administered and implemented by the executive, while the judiciary interprets the laws and adjudicates the rights and liabilities of parties in accordance with the law.

The executive branch, the President, can only act pursuant to powers delegated to it by the Constitution or Congress.

The President may have the Bully Pulpit, but he lacks legislative authority.

The President of the United States, a Constitutional Law Professor, is unilaterally imposing a compensation regime on BP, something for which he lacks legal authority.

In demanding reparations and the establishment of an escrow fund, President Obama is acting as judge, jury and executioner by executive fiat without any statutory authority to do so. As a constitutional Law Professor, he should know better.

President Truman during the Korean War claimed national security as the justification to seize the nation’s steel mills during a threatened strike. The United States Supreme Court held the President’s action unconstitutional in the famous 1952 Youngstown Sheet and Tube v. Sawyer case, a case which the Constitutional Law Professor is undoubtedly familiar with. The President lacked statutory authority to seize private property.

A President who is willing to trash the American debt holders of Chrysler and General Motors to advantage the United Auto Workers so as to save their medical plans, will have no qualms about any injuries done to British investors in BP, or even the American holders of 50% of BP’s stocks. British pensioners don’t vote in U.S. elections.

No legal authority exists, even in Tort law, for a defendant to be liable for remote economic losses, such as layoffs or reduced tax revenues. The farther out the chain of causation one goes, the more infinite the number of possible claimants, the more diffuse their claims, and the greater the opportunity for fraudulent claims.

The claims become infinite, but the defendant’s resources remain finite.

Congress or state legislatures can certainly enact statutes which provide for such a remedy, but for now BP’s legal liability under the Oil Pollution Control Act of 1991, enacted by a Democratic Congress, is limited to a paltry $75 million. BP has pledged to pay all “legitimate claims,’ whatever that means, but is not yet legally liable to do so.

We are witnessing another version of Chicago rules – legalized extortion. Congressman Joe Barton was right about this fund being extortion.

BP has little choice but to comply with the request for a $20 billion compensation fund. Hanging over BP are the public statements and threats by the President and Attorney General of criminal prosecutions of BP. The possible criminal penalties are in the billions, not to mention prison time. That is quite a sword of Damocles hanging over BP, or, if you will, the government's boot on BP's throat. BP dares not fight too hard on the civil for fear of the criminal.

BP and the rest of the oil and gas industry also face the threat that the President could extend and expand his current 6 month ban on new drilling. As illustrated by his Oval Office speech, he is in favor of shifting away from fossil fuels.

BP made a strategic, economic, and business decision to set up the escrow fund. The more claims it can resolve without going through litigation will save it money. The $20 billion will buy it some goodwill for awhile, but it is only a down payment.

The real interesting feature of the escrow plan is that BP has voluntarily contributed, without admitting liability, to a $100 million fund for the rig workers laid off by the President’s order.

The final cost to BP will far exceed $20 billion, all the current executives will be cashiered, and BP will lose its independence, probably becoming part of the China National Oil Company.

The British Government, of which the old Anglo-Iranian Oil Company was an integral of its foreign policy, will be unable to save England’s largest corporation.

The fund, to which BP will contribute $5 billion annually for 4 years, will be 40% financed by the elimination of the $2 billion annual dividend. The dividend was history once the magnitude of the disaster became clear.

BP may have earned $16.8 billion last year on revenues of $250 billion, truly impressive numbers, but except for the dividends the remaining income was reinvested in the company for exploration, drilling, and environmental and safety improvements at its facilities. The company claims to have spent over $1.6 billion to date in fighting the blowout and cleaning up.

The $1.6 billion and $20 billion are but down payments on an unknown liability.

The unanswered question about the fund is:

Where are the lawyers?

Monday, June 14, 2010

Elmer Fudd is Hunting Wabbit in Mission Viejo

Elmer Fudd has been dispatched to “kiww the wabbit” in Mission Viejo, California.

The cry is up; “Shoot the wabbit.” Follow Elmer on his quixotic, Sisyphean quest to “Kiww the wabbit.”

Rabbits are prolific little critters, threatening, in the eyes of Mission Viejo residents, to do to their fair city what billions of invasive rabbits have done to the continent of Australia - inundate it with rabbit dung.

Mission Viejo, the affluent Mission Viejo, Mission Viejo, the safest city in California, the Mission Viejo that is only 22 years young, has a solution to the alleged rabbit infestation.

We don’t know if there is a problem or not, since no one has conducted a rabbit census in Mission Viejo. If we did hire temporary rabbit census workers, we could further reduce the unemployment rate.

Apparently the rabbits did not acquire squatters rights or adverse possession by being there first. No defense of coming to the nuisance against Mission Viejo.

Clearly no due process in Mission Viejo for Roger Rabbit, who may be framed rather than befriended.

The Palmia Homeowners Association, representing a gated community of 901 homes in Mission Viejo, applied to the Council for a permit to kill the rabbits. The community of seniors was upset by the rabbit infestation that chewed their lawns to the ground, devoured flower beds, and left their droppings and urine behind. They did not appreciate the natural bunny fertilizer. The seniors are set in their ways.

Mission Viejo is not thinking outside the rabbit box, warren or pen. Five years ago they issued a similar permit to another HOA, Casta del Sol, which was spending $50,000 annually to replace the flora. Casta del Sol, unwilling to be renamed Casta del Rabbit, now reports the rabbit problem is under control.

Long Beach Community College is also overrun with Thumpers. The college’s humanitarian solution is to trap the rabbits, neuter them, and then release them.

Mission Viejo could Tazer the rabbits, neuter them, and then relocate them into Silverado Canyon or the Cleveland National Forest.

But no, Mission Viejo follows the lore of the West that “The only good rabbit is a dead rabbit.” Mission Viejo's new city motto is "Hare today; gone tomorrow."

Rabbits, like prairie dogs are to be exterminated. No more Mission Viejo Velveteen Rabbits.

If they make a success out of it, then they could mount an annual “Kill the Wabbit Festival,” like the annual Rattlesnake Roundup & Cookout in Sweetwater, Texas. Make a carnival out of it.

Orange County already has the Tustin Tillerdays, Garden Grove’s Strawberry Festival, Little Saigon’s Tet, Dana Point’s Festival of the Whale, San Juan Capistrano’s Return of the Swallows (who apparently are moving on to nicer accommodations), and Newport Beach’s Annual Christmas Boat Parade. La Habra double dips with a Spring Citrus Fair and also a Corn Festival. Orange has its International Festival and Huntington Beach Oktoberfest, both of which are excuses to drink outdoors between sunrise and sunset, but no one celebrates hunting in the Orange Curtain.

Mission Viejo has a Festival of the Arts, but it is greatly overshadowed by Laguna Beach’s Sawdust Festival and Festival of the Arts.

Mission Viejo needs something to distinguish it from all the other O.C. planned communities. A “Shoot the Rabbits Festival” could be the trick.

Let us also not forget Disneyland and Knotts Berry Farm, for sheer entertainment.

The conditions imposed on the permit are almost Mickey Mouse, which is appropriate to Orange County.

Only pellet guns can be used.

The hunting is only allowed 30 minutes after sunset and 30 minutes before sunrise;

A professional company must be hired to do the hunting

The hunt must be conducted in open space

No people can be present

The hunters must put their guns down when people are present;

The hunter must notify the Sheriff’s Office on huntng days.

Ask yourself two questions:

What self-respecting hunter hunts rabbits?

Make a sport out of it. Have the hunters lasso the rabbits in the grass. Rancho Mission Viejo already hosts a rodeo. What better time for rabbit hunting?

Second, if you shoot rabbits with pellets, do rabbit pellets come out the other end?

Mission Viejo has overlooked some natural solutions to the rabbit infestation.

They could, for example, bring in a pair of coyotes. They feast on rabbit. Also a wild cat, or mountain lion, could serve the purpose.

Coyotes though can’t tell the difference between rabbits, alley cats, and miniature schnauzers.

They could import the rabbit killing myxo virus from Australia.

Apparently Mission Viejo does not wish to traumatize the children by watching rabbits being killed. But this is a seniors community.

An unanswered question is what to do with the stiff rabbits:

Cremate them, and scatter the ashes over the artificial Lake Mission Viejo.

Inter them with a proper burial and a head stone under an immaculate lawn;
“Her lies Muffy;
2010-2010: Pellet Poisoning”

Preserve the rabbit family in a crypt

Throw Bunnykins into the trash

Throw The White Rabbit out as carrion to be recycled by nature.
Raccoons and crows could clean the Miffy in a jiffy.

Stew the rabbit

Harvest the organs.

Donate Peter Cottontail's lucky rabbit tail to a deserving Pateadore.

Mission Viejo is being very shortsighted.

Elmer Fudd is out to kiww the warbbit, and we know how too well that worked out in Looney Toons. Elmer could never pull a rabbit out of the hat, much less the grass.

Saturday, June 12, 2010

Karen Bass, Speaker Emeritus and Congresswoman in Waiting Does It Again

President Kennedy in his stirring Inaugural Address on January 20, 1961 challenged Americans:

“And so, my fellow Americans, ask not what your country can do for you. Ask what you can do for your country.”

Karen Bass, Speaker Emeritus of the California Assembly and soon to be Congresswoman from Los Angeles, is of the class, the growing class, which looks to the government as their primary funding source.

Speaker Bass’ background includes a B.S. in Health Sciences from Cal State Dominquez Hills, followed by a Physician Assistant Certificate from USC. She’s worked as a Physician Assistant and taught at USC, and then became a community organizer, founding the Community Coalition.

Community organizers are of the class, which do not view public funds as a public trust, but as a trough upon which to draw upon whenever personally or politically convenient. For the Karen Basses of the world, upon election to office, the question is how much can they divert to themselves and allocate to their voters. The government fisc in essence becomes a slush fund.

When the trough is running dry, they are blinded by the mirage of increased taxes and fees to fill and grow the catch basin. They tax the producers, neither understanding basic economics nor even Aesop’s fables. The California Legislature and the Obama Administration are exercising Herculean efforts to kill the goose, private enterprise, which lays the golden egg.

They do not understand that the more you tax, the less you get; basic economics was not part of their education.

The Laffer Curve is a foreign language to them.

Of course, they avoid the word “tax.” Instead, revenue and revenue enhancements are
the words of choice.

Last year, as the state was plunging into a record deficit, and had to issue script to pay its bills, the Speaker announced 5% salary increases for several legislative aides. Taxpayers may have to sacrifice, but not the legislative aides. The raises were rescinded on April 22, 2009 after a great public outcry, and also because of the negative reaction before the May referendum s proposing to extend the newly enacted tax increases.

In the same press statement, available on YouTube, she said in a straight face that “One of my top priorities is making sure I manage the people’s institution effectively.”

However, when she stepped aside in March this year as Speaker, she double-downed by giving an average 10% pay increase to 20 aides, while the legislature was otherwise under a salary freeze, and many state employees are taking furloughs amounting to a 15% pay cut. George Orwell and Animal House come to mind.

Then came the public revolt against the large tax increases enacted to unsuccessfully resolve the state budget crisis. Two of the six Republicans who voted for the increases were the Senate and Assembly minority leaders. They had signed the no-tax pledge. They were stripped of their leadership positions. Another of the six was confronted with a recall campaign.

Speaker Bass was asked in a Los Angeles Times interview: “How do you think talk radio has affected the Legislature’s work?”

She responded:

“The Republicans were essentially threatened and terrorized against voting for revenue. Now (some) are facing recalls. They operate under a terrorist threat: ‘You vote for revenue and your career is over’ I don’t know why we allow that kind of terrorism to exist. I guess it’s about free speech, but it’s extremely unfair.”

Somehow I do not feel public responses to politicians, who violate their promises, constitute terrorism. It’s democracy in action.

Let us remember that President George H. W. Bush lost reelection because he broke his “No new taxes” pledge. Conservative voters cast their ballots in protest for H. R. Perot, giving a plurality victory to Bill Clinton.

Her ‘terrorists” were undoubtedly the famous John and Ken on KFI.

Speaker Bass had another interesting reaction when the voters rejected the second half of the tax increases. She explained the defeat because the voters thpught the proposals were too complicated for them, that they were fatigued with voting on too many special elections, and they wanted the legislature to do it.

Not one word that the voters were opposed to the tax increases, which made California the highest taxing state in the country.

Karen Bass’ most recent antic does not involve a substantial sum of money, but is illustrative of her attitude to the taxpayer’s monies. California allows legislators to collect a per diem of $141.80 for attending sessions in Sacramento. The purpose is to compensate them for their costs in traveling to Sacramento and back. Of course, the legislators also receive a substantial car allowance.

The Los Angeles Times reported on June 5 that the Speaker Emeritus, who remains a legislator, has missed over 60% of the assembly sessions, but continues to collect the per diem, 29 days@141.80 =$4112.20. She claims that the per diem, designed to compensate for the rigors of Sacramento, also applies to “on official legislative business” in her Assembly District.

In other words, no matter how you spin it, she’s collecting the tax free per diem while campaigning for Congress.

And soon, her hands will be on the federal printing presses, unrestrained by any state balanced budget requirement!

Friday, June 11, 2010

Mercury 1939-2010: R.I.P.

Remember your Mercury Tracer? No, how about your Mercury Mariner? Or your Mercury Topaz? Or the Meteor?

Let’s add the Milan, Comet, Bobcat, Elite, Sable, Capri, Villager, Mountaineer, Montego, Lynx, Merkur, and Marauder.

Still shaking your head?

That’s the problem.

Not many were sold.

Mercury never carved out a separate identity for itself. James Dean may have driven one in 1953 in “Rebel Without a Cause,” but that was almost six decades ago.

With but a few exceptions, Mercury was simply a more expansive, rebadged Ford.

Mercury’s had a few successes, but not enough. The Cougar XR-7 was beautiful, derived from the Mustang, but not to be confused with it, unlike GM’s Camaro and Firebird clones.

The old Colony Park station wagon had classic lines, as did the Park Lane. Finally, the Grand Marquis lasted for 2 decades as one of the last of the large, rear wheel drive cars, and commanded some brand loyalty.

Mercury’s most successful year was 1978, when it sold 580,000 cars. It’s next best year was 1993 with 480,000 cars. 1993 was the last great year for Detroit. Plymouth sold 973,000 vehicles in 1993, but Plymouth died a decade ago. Oldsmobile, also history, had its best year in 1985, being the third largest selling brand in America, with 1,066,122 vehicles, trailing only Chevy and Ford. That didn’t save the Merry Old Olds.

Pontiac, Saturn, and Hummer also died this year because of GM’s bankruptcy.

Mercury has been on a long downhill slide since 1993. Adding SUV’s to its lineup only postponed the end.

It has sold only 41,600 Grand Marquis, Mariner, Milan, and Mountaineers this year, holding .8% of the market. 92,299 Mercurys were sold last year compared to 359,143 in 2000.

What’s the lesson from Mercury, Plymouth, Oldsmobile, Pontiac, and Saturn?

Simple, one by one, the weaker American car brands are falling to the imports from Japan, Korea, and Germany. The closure of each line represents another failure of Detroit.

Thursday, June 10, 2010

Is There Something in South Carolina's Water?

Are there excessive hormones in South Carolina’s waters?

Is someone pouring testosterone into the drinking waters of the Palmetto State?

Why is it that South Carolina has a disproportionate amount of salacious political sex scandals?

Forget the Tea Party and tea baggers; ignore the GOP and West Hollywood sex clubs, David Vitter and Eliot Spitzer and their prostitutes, the sordid tale of John Edwards, the affairs of Nevada Governor Jim Gibbons and Senator John Ensign, et al.

Sleepy South Carolina has awaken!

Francis Marion, the “Swamp Fox,” the Citadel cadets who fired the first cannon rounds at Fort Sumter, that South Carolina was the first colony to secede from England, Lee Atwater, the king of dirty tricks, this is all ancient history.

The current governor, Mark Sanford, while hiking the Appalachian Trail, fell on his penis in Brazil. He was lost. So much for the up and coming, politically conservative, family values, rising star of the GOP!

Unlike many political wives “who stand by their man,” Jenny Sanford unceremoniously dumped him.

Senator Strom Thurmond was nicknamed “Sperm” Thurmond because his youngest son was born in 1976 when the Senator was 74. Marrying a former Miss South Carolina helped the Senator live to 100. After his death, it was revealed that the segregationist’s first child was a daughter born in 1925 to his black maid.

South Carolina is known for knocked down, dragged out, no holds barred elections.

Racism has been a potent campaign issue in past elections.

Sexism joined racism in this election cycle.

State Representative Nikki Haley won almost 49% of the Republican primary votes, but will be in a runoff because she just missed 50%.

Just a short time ago she polled fourth among voters, but endorsements by Jenny Sanford, Mitt Romney, Sarah Palin, and the Tea Party helped her, but then so did some outrageous claims by her political opponents.

Nikki (Nimrata Randhawa) is the daughter of Sikh immigrants from India, but has converted to Methodism. State Senator Jake Knotts, a supporter of Lt. Gov. Andre Bauer, one opponent, said “We’re already got a raghead in the White House. We don’t need another raghead in the Governor’s Mansion.”

On May 24, 2010 Will Folks, former press secretary for the disgraced Governor Mark Sanford, claimed on a blog to have had an inappropriate physical relationship with the married Nikki. Then on June 3, 2010, Larry Marchant, a former political consultant for Andre Bauer, also claimed a one night stand with Nikki.

She has vigorously denied both claims, asserted 100% faithfulness to her husband, and promised that if elected, and they prove those allegations, she would resign. As we say in Southern California, Nikki has cajones.

A double standard is at work here. The number of adultery claims that could be asserted against male politicians is almost infinite, but they usually don’t emerge. They tend to stick more to Republicans than Democrats. Think of President Clinton and his campaign being on constant "Bimbo alert' to fight any and all charges. He won, and Hillary continues to stand by him.

If Representative Haley wins the governorship, then she will join Governor Bobby Jindal in Louisiana, as Indian descended governors in the Deep South. President Obama, and the two Indians prove America has come a long way in recent years in achieving equality. Are we there yet? No. but we’ve come a lot farther than I ever thought possible back in the 60’s.

Even Democratic voters in the South Carolina primary showed their disgust with Washington. Allen Greene, an unemployed candidate who never ran for office before, ran no ads, set up no website, and engaged in no fundraising, won the Democratic nomination for the United States Senate with 59% of the primary vote, winning out over established candidates.

He received over 100,000 votes in his non-campaign. An estimated 70% of the Democratic primary voters were African American. Greene is African American, but his primary opponent, a traditional politician, was white. Make any conclusions you want from that.

Then it turns out the unknown is not unknown to law enforcement. He has a felony charge pending against him for showing porn last October to a college student. He was also kicked out of the Army last August, but received an honorable discharge.

The palmettos don't provide much shade anymomre in South Carolina.

Wednesday, June 9, 2010

44.5-30.8%: Meg Whitman and Carly Fiorina's Problem in California

44.5-30.8%: The GOP’s Problem in California

This is the year for the resurrection of the California Republican Party. If not this year, then when? If not this year, then the California Republican Party will continue a descend into irrelevancy.

The state economy is in the tank, with California doing its best to catch Michigan with the nation’s largest unemployment rate. The state’s credit rating is the lowest of all the states; it took several years, but California finally surpassed Louisiana. California is borrowing record sums, driving up interest rates and running into the problem of compound interest on the state budget.

K-12 education is struggling in many areas, and failing in several, while the world’s greatest higher education system is being starved financially.

California residents are fleeing the Golden State. A net 144,000 emigrated out of California in the year ending July 1, 2008. The estimate is that over 800,000 California Citizens have taken up residence in other states in recent years. The emigrants are employers, entrepreneurs, millionaires, retirees, and soon the young college grads. Even high tech jobs are shrinking in California. Cisco said it will not build another facility in California.

The state is living off the infrastructure (highways, schools, water distribution, power generation) built over 40 years ago by Governor Pat Brown in cooperation with Assembly Speaker, Jesse Unruh.

The state legislature has even lower ratings that the Governor, who has the lowest ratings of any governor. The good news for the Democrats is that Governor Schwarzenegger is nominally a Republican, thereby providing them political cover on their tax increases.

The odds are against the Republicans even this year. The challenge is daunting because of a built in registration advantage for Democrats. The Republican base in California has been dispirited, dying, or emigrating out of the state.

The current Republican registration in California is down to 30.8% from 34.4% from 4 years ago. The historical base for the GOP over the past 11 years has been 34-35%.
Democrats though are up to 44.5%, while “decline to state” (independents) are up to 20.2% The Democratic base had been declining from 46.7% in 1999, but has been rising in recent years.

The difference in party registrations favors the Democrats by 2,324,789 voters. That is a large hole for the Republicans to fill.

If democrats hold onto their base, and grab a few independents, they should win.

The Republicans have to hold their base, win almost every independent, attract Democratic crossovers, maximize the Republican turnout, and minimize the Democratic turnout.

It’s doable. I’ve seen an even greater gap overcome in Massachusetts in 1982 when Democratic Governor Michael Dukakis almost bankrupted the state, Republicans captured the governorship for 16 years, and even elected 2 Republicans to Congress in the erstwhile “People’s Republic of Massachusetts” or “Taxachusetts.”

It can be done in California, but defeating Jerry Brown and Barbara Boxer will be difficult. The raw numbers favor them, and labor will pour money into the campaigns, although Meg Whitman may be willing to pour $150 million of her own money into the campaign.

Senator Boxer may, in the words of the Los Angeles Times, “display less intellectual firepower and leadership than she could,” but she knows how to run a campaign, down and dirty if necessary.

The GOP, to be successful in November, needs to win the senate seat, governorship, attorney generalship, at least one other statewide position, several legislative seats, and a couple of Congressional seats.

Doable, but probably only in a national landslide for the GOP.

California is About to Ban Plastic Grocery Bags and Charge for Paper Bags

Who says California has a do-nothing legislature?

It may be avoiding acting on major issues, such as the state budget.

It may have its head in the sands on the $20 billion budget deficit.

But it is acting expeditiously to ban plastic bags and impose a nickel fee on paper bags. The proposals have sailed through the legislature so fast that an organized opposition could not mount.

The Assembly passed the bill, 41-27, on Wednesday, June 1, and the Senate followed on Friday,

The bill would prohibit pharmacies, grocery, liquor and convenience stores from giving out plastic bags. Stores would be required to sell paper bags for at least a nickel each.

The bill awaits the Governor’s signature, which has been promised. Governor Schwarzenegger has called it “a great victory for the environment.”

I am tempted to get facetious at this point and ask questions like, if we eliminate the plastic bags, then what can we use for marijuana baggies and to collect the pooper scooper droppings?

Environmentalists and grocers formed a strange alliance in support of the proposals.

The environmentalist support is understandable. An estimated 19 billion, non-biodegradable plastic bags are distributed each year in California. Only about 6% are reused. They remaining 94% show up as litter throughout the state, costing an estimate $23 million for taxpayers to clean up.

For grocers, the reasons are purely economic. Instead of giving out plastic or paper bags, they want to charge us for bags, adding to their bottom line. They’ve tried some alternative approaches in the past, such as credits for reusing bags. That failed, so now they want to use the coercive power of the state against consumers to profit the merchants.

The nickel fee may add up to $1 billion annually.

In addition to the nickel fee, the grocers are pushing the $1 partially recyclable bags purchased at checkout. These reusable grocery bags, partially made from
recyclables, will over time become a vector for disease, especially from accumulated bacterium.

Only two cities in California have banned the plastic bags so far, Malibu and San Francisco. Dozens have considered doing so and backed off, awaiting a California Supreme Court opinion on whether an environmental study should be prepared before banning the plastic bags.

The argument is that paper bags are more damaging to the environment than plastic bags in transportation costs and the release of greenhouse gasses in producing the paper bags.

Legislative efforts to tax or ban the plastics have failed three times in the past.

Often times, our environmental aspirations exceed our reach. My hunch is that when the law goes into effect a backlash will ensue, and a referendum will be placed on the ballot to repeal it. Talk show hosts, especially John and Ken of KFI, will have a field day with this one.

A couple of states in the past tried to ban disposable diapers. Resistance, even from affluent environmentalists blocked those attempts.

Sometimes convenience trumps the environment.

Is Rand Paul Ready For Prime Time

Kentucky Republican Senatorial candidate is a citizen politician, a doctor, seeking political office for the first time. Whatever he is, Rand Paul is not a career politician. He speaks from the heart. He speaks what he believes, and he is a true believer - None of the nuanced language of the professional politician for him.

Rand Paul opposes amnesty and birth right citizenship, as well as same sex marriages and Roe v. Wade, but on both marriage and abortion he believes the states should decide. He supports an amendment that would recognize life begins at birth, and opposes cloning. He also opposes the McCain Feingold Act and the USA Patriot Act, especially warrantless searches. He wants to eliminate the Department of education.
Even Ronald Reagan gave up on that one.

He supports though the morning after pill and the legalization of marijuana for medicinal purposes.

Senate Minority Leader, Mitch McConnell, also from Kentucky, and the rest of the Republican establishment, supported Paul’s primary opponent, Secretary of State Trey Grayson. They knew. Grayson is a poised, traditional politician, but Rand Paul could be a loose canyon.

But Rand Paul, weaned on the libertarian philosophy of his father, Congressman Ron Paul, caught lightning in a bottle this year this year of the anti-establishment, anti-incumbent. He ran a campaign based on fiscal conservatism in Washington. The Tea Party embraced Rand Paul. The primary was a blowout.

Then barely a day later, his campaign started to implode. Rand couldn’t control his statements. The fears of Senator McConnell were realized. Several Tea Party candidates, such as Rand Paul and Sharon Angle, may snatch defeat from the jaws of victory in November, much to the dismay of traditional Republicans.

If they do, then the Democrats will hang onto their House and Senate majorities.

Paul was asked about the Civil Rights Act of 1964. His initial response was to say that he was opposed to discrimination and thought it was poor business. So far, so good, but he couldn’t stop at that point.

Instead, he followed up with the provocative statement that he thought the Civil Rights Act of 1964 should not be used to force private businesses to desegregate or accommodate the needs of the disabled. He also threw in a similar sentiments about the Americans With Disabilities Act.

This was definitely a politically tone deaf utterance.

Rand shortly recanted and said he would oppose any attempt to repeal the laws.

Is any serious politician advocating repeal of the nation’s core, hard won civil rights acts?

He subsequently criticized President Obama for being un-American in attacking British Petroleum.

The American public is not concerned with any normative concepts of a special relationship between America and England when a British company is polluting the Gulf of Mexico and its oil is washing ashore on the Gulf States.

He’s right in that the President often resorts to demagoguery in attacking his opponents. That’s who the President is, but no seasoned politician is criticizing the President for his “feigned outrage” against BP. They criticize his lack of action, which goes to his competency, or lack thereof, in office.

Paul’s statements will receive major airplay in the November election, as the GOP sees the Senate seat sinking away.

Or will it?

In this year the anti-Washington sentiment may bring a landslide of Republicans into office. Kentucky is a traditional Democratic state, but it is increasingly leaning Republican. The state also has a strong libertarian streak.

Tom Coburn, also a doctor, received raised similar trepidations in his libertarian Senate race in Oklahoma, but pulled out a victory.

For now, two phenomena are evident. The mainstream media is giving Rand Paul the Sarah Palin treatment, and the GOP has muzzled Rand Paul.

Monday, June 7, 2010

Did You Know Blago's Trial Began Last Thursday?

Impeached Governor’s Rod Blagojevich’s criminal trial started last Thursday. Did you know that?

Has Blago exhausted his 15 minutes of fame? The media has essentially ignored the trial, at least so far in its early stages.

Q: What again is he on trial for?

A: Attempting to sell President Obama’s senate seat to the highest bidder - in short, political corruption, 24 counts of bribery, extortion, and racketeering.

Blago peddled many favors in his 6 years as Illinois Governor.

He’s also on trial for arrogance and/or political stupidity – the two often overlap. Everyone knew he was under investigation for two years by the Justice Department, and hence would be wiretapped. Almost 500 hours of recordings exist. A lot of politicians are on the opposite end of these conversations.

America wants to know what they said.

Blago’s defense attorneys have issued many subpoenas, including to Rahm Emanuel and Valerie Jarrett, key Obama advisors. Congressman Jesse Jackson, Jr. and Senators Harry Reid and Richard Durbin have also been on the receiving end of the subpoenas. The federal judge rejected a subpoena for President Obama.

America wants to know what they know.

The major witnesses against Blago are two former chiefs of staff, who have entered into plea bargains with the federal prosecutor. The feds have crimped his defense somewhat by freezing many of the accounts he could have drawn upon to fund his defense.

America won’t totally trust their testimony.

All of this is irrelevant to the real issue.

Was Blago an independent opportunist, or was he simply an extreme example of traditionally corrupt Chicago and Illinois politics?

“Chicago Rules” is rapidly becoming descriptive of the current White House.

The recent revelations from the White House of attempting to get two Senate candidates in Colorado and Pennsylvania to drop their primary challenges to incumbents in exchange for federal jobs has the same taint as Blago’s sales.

A White House aide, Rahm Emanuel’s assistant Jim Messina, also was stupid in emailing a list of three job possibilities to the Colorado candidate, Andrew Romanoff. That eliminates plausible deniability and then necessitates a lawyer’s tortured exculpatory memo.

No Congressional investigation will occur unless the Republicans gain control of either the House or Senate next November, but a few more disclosures and revelations will help them in November, especially in the Illinois Senate and perhaps gubernatorial races.

Much depends on how aggressive a defense Blago intends to mount, and what the trial judge will admit into evidence. Blago has nothing to lose by letting everything hang out. This trial could be a circus.

If so, it could blow up bigger than the BP blowout.

The Administration has much to lose, and little to gain from this trial.

Saturday, June 5, 2010

Send in the Lawyers to the Gulf

Send in the Lawyers to the Gulf

Send in the lawyers.

Unleash them on BP.

Let justice be served.

A veritable tsunami of lawyers have descended upon the Gulf. Over 150 lawsuits have been filed to date. The gusher of paper will exceed the crude washing upon the shore.

Lawyers may not be able to plug the hole, but they can drain the coffers.

Lawyers cannot do cleanup, but they are guaranteed to be the only ones to clean up from this environmental disaster.

Lawyers are sometimes the first responders to a tragedy as time is often of the essence.

Lawyers cannot engineer, design, build, maintain, operate, repair, plug, or cement the hole in the ocean, but they will fill their pockets as they cast their eyes and salivate on the black gold gushing forth.

The lawyers will exult at every tiny tar bar that washes ashore. But they will not wait. Thus, they are signing up clients in communities that the oil may never reach.

The environmental losses will be enormous, but the legal claims infinite; wrongful death, loss of consortium, negligence, negligence per se, strict liability, violations of statutes, Migratory Bird Act, Endangered Species Act, water pollution, oil pollution, air pollution, Rivers and Harbors Act, securities fraud, citizen suits, consumer fraud, nuisance, absolute nuisance, negligent nuisance, aesthetic nuisance, animal rights, trespass, breach of contract, economic losses, emotional distress, intentional and negligent, business interruption, lost income, lost employment, lost opportunities, NEPA, OSHA, NFPA 1600, ISO 17799, PWA, PETA, ISO 27001, BS 25999, CERCLA, RCRA, RICO, TSCA. The lawyers will make law.

Lawyers can always plead anything.

BP may have had trouble with pipes, valves, levers, spigots, blowout preventers, containment domes, Top Kill, Junk Shot, Top Hat, riser insertion tube tool, lower marine riser package, diamond studded saws, oil dispersants, and caps, but not the lawyers.

Lawyers rely upon hindsight for their brilliant understandings of a tragedy.
Hindsight is a much better test than foresight in clarifying the obscure, obtuse, incomprehensible, and complicated.

Caps are a 4 letter word to trial lawyers; they often mean limitations on damages and attorney fees.

Congress may lift any legal caps flowing in the Gulf.

That the hole in the earth is a mile underwater, in freezing temperatures, and under great pressure is irrelevant to the attorneys on land in air conditioned offices, Mercedes and BMW’s. Math was removed from the LSAT decades ago.

Legal principles, not fundamental principles of engineering, control in the courtroom.

The calculus of damages, not the calculus of finite math, controls litigation.

A relief well should never be confused with real relief, that is, judicial relief.

Remember H Ross Perot and his “giant swooshing sound,” or was it “giant sucking sound?” That’s not the sound of crude swooshing out the breach, but of lawyers sucked into it. Send in the lawyers.

Lawyers have never seen a disaster or tragedy so great that they will not jump in, all in the name of justice.

Dickens had his Bleak House, and Exxon 20 years of litigation with the Exxon Valdez, but these lawyers are relentless in the pursuit of justice, and lucre.

Santa Barbara and Exxon Valdez were but legal warmups to the Gulf. Multiple defendants, BP, Transocean, Halliburton, Cameron, at least five states, Texas, Louisiana, Mississippi, Alabama, and Florida, scores of counties and parishes, cities, towns, villages, hamlets, the federal government, perhaps Mexico and Puerto Rico, multitudes of private claimants, insurance companies, commercial fishermen, sports fishermen, charter boat operators, marina owners, beach front motels, hotels, restaurants, diners, fast food stands, gas stations, curio and sundry shops, tax revenues. All with a defendant with a historically lax safety record. This is the Big One – The Holy Grail of Mass Torts. Thank you BP!

All this fault and potential liability, and a host of deep pocket defendants, oh what a gift to the trial lawyers. They need the boost.

BP has supposedly spent over $1 billion in attempting to stop and contain the oil. $84 million has been given out for lost income. That’s not even a down payment; none of it has yet to go to the lawyers.

This is an administration of lawyers: The President and his wife, the Vice President, the Attorney General, of course, the Secretary of the Interior, the Secretary of Homeland Security, and the Secretary of State. They’ve dispatched the Justice Department’s criminal attorneys to the Gulf.

BP does not stand a chance when aggressive government prosecutors file a laundry list of charges, criminal and civil, against it. Guilty, guilty, guilty! BP has lost any presumption of innocence. Many environmental crimes are strict liability offenses. Innocence is irrelevant.

Tort law, Toxic Torts (toxic dispersants), Admiralty law, common law, civil law, Cajun law, doesn’t matter. The law doesn’t matter. It’s the jury, and in the hands of a skilled trial lawyer, the jury is but putty.

A great trial lawyer can turn a routine negligence case into recklessness, and voila, punitive damages.

Engineers may be bedeviled by the common pothole, but pothole lawyers view potholes as a bottomless money pit. Once upon a time, New York City was so frustrated paying out pothole claims that it passed an ordinance which provided that no liability could be imposed for a pothole injury until the city had been informed of the existence of the pothole.

The City thought it had tossed the lawyers into the abyss of the pothole.

Never underestimate the ingenuity of an attorney about to lose an annuity. The pothole bar hired students to survey every street in New York City. Shortly before the ordinance took effect, the lawyers delivered to the City a comprehensive street map of New City with all the existing potholes revealed.

The Gulf lawyers are thinking in broader terms than potholes.

Remember British Petroleum’s slick public relations campaign: “BP- Beyond Petroleum?” The company even adopted green as its color. Green is an open invitation to the trial lawyers. BP has proven it is but petroleum.

And when it’s all resolved, the most expensive lawyers by billing rates will step in – the bankruptcy lawyers. They collect their fees and costs first in bankruptcy. Lehman Brothers is already up to $1 billion. Nice legal work if you can get it.

The BP Gulf Oil Blowout will become the Gulf Lawyers Full Employment Opportunity and Annuity Gift. Thank you BP.

Random Thoughts on John Wooden

John Wooden is the greatest coach in basketball history, if not all professional and collegiate sports: ten national titles in 27 years, seven national titles in a row, four perfect seasons, never a losing season coaching college, 88 straight wins, and no scandals.

However, he was only the third best coach in California and the West. Pete Newell at Berkeley (Newell beat Wooden 8 straight times before retiring)and Phil Woolpert at USF routinely beat him. Both retired though from head coaching, and cleared the way for Coach Wooden’s great coaching run beginning with his 1963 team.

Newell and Woolpert simply couldn’t handle the pressure. Newell won an NIT Title at USF and a NCAA championship at Berkeley. Woolpert won 2 national titles with Bill Russell and K.C. Jones, and 60 straight games. They pioneered tactics, such as the full court press, later made famous by Wooden.

John Wooden went 15 years between being hired by UCLA in 1948 (starting salary $6,000, highest salary $32,500) and winning the first national title. Expectations were different then. UCLA would not retain a basketball coach today for 15 years without bringing home a title.

UCLA only hangs national championship banners from the rafters of Pauley Pavilion – basketball, volleyball (Al Scates actually won 19 volleyball championships at UCLA), and gymnastics. It’s quite an impressive sight.

Wooden might well have persevered against Berkeley and USF had the two rivals continued coaching. Berkeley hit the riots and militancy during the 1960’s that turned many athletes off from attending the great university, and the Jesuits at USF were especially penurious, even on recruiting budgets for the great basketball teams. Most of USF’s great players came from the San Francisco Bay Area.

Coach Wooden was a great coach for several reasons. First, he was a teacher, a classroom teacher of English. A great classroom teacher, who understands the fundamentals of a sport, and knows how to motivate players, can be a great coach. He was a teacher first, a teacher always, and a coach second.

He could recruit and coach players. Many winning coaches can recruit, but not necessarily coach. Their players leave with the same skills sets they arrive with. He didn’t rest, for example, when Lew Alcindor (Kareem Abdul-Jabbar) arrived at UCLA. He hired a big man as an assistant coach simply to teach the young center new skills and moves, such as the famous sky hook.

Third, he was not set in any given system. He shaped the system to the skills of his players. He could beat you with a 2 guard offense (Hazard and Goodrich), two power forwards (Wicks and Rowe), or an outstanding center, such as Jabbar or Walton. He was so good that he is one of the few coaches who could beat your team with his players or his players with your team.

One of the several years in the 1960’s, when UCLA would beat my beloved USF Dons in the Western Regionals, Wooden was rumored after his victory to admit USF had the better players. We knew though that John Wooden was a better coach than Pete Peletta.

Fourth, he coached fundamentals, defense, discipline, conditioning, quickness, teamwork, values and character – still a winning combination.

John Wooden may have been soft-spoken and mild-mannered, and seemed a throwback to an earlier age of simple values, but he had a strong drive to win.

He possessed the simple, but eternal values of the heartland of America, the small Midwest towns.

At a time when racial discrimination still permeated many collegiate and professional teams, Coach Wooden played African Americans. On the other hand, the Baron, Adolph Rupp, of Kentucky was known to be hostile to African American players. His all-white team lost to the 5 starting blacks of Texas Western in the 1966 NCAA Championship game.

His records may never be broken.

Other great coaches, such as Red Auerbach with the Boston Celtics, had great success, especially with Bill Russell, but professional players back then were in a sense indentured servants. Their contracts bound them to the team. Free agency and player unions did not exist.

The most successful college coach since John Wooden, Mike Krzyzewski at Duke, has won only 4 national titles in over 3 decades at Duke.

One advantage Wooden had at UCLA was that players could not turn pro early in those years. They were at UCLA for the full four years. Now, when one and out is often the norm, coaches cannot build championships on returning players. When they do, such as Florida’s twopeat, North Carolina last year, and Duke this year, it’s rare. This year, Coach Calipari outdid himself at Kentucky – not one and out, but four and out for his freshmen.

John Wooden’s records are at risk from teams which play disciplined defense and fundamentals, and do not turn pro until after 4 years. It’s the women’s basketball teams. Coach Pat Summitt has won 8 national titles at Tennessee, followed closely by Geno Auriemma at UConn. Geno’s teams have won 7 national titles, have 4 perfect seasons, and currently possess a 78 game winning streak.

The University of Connecticut women’s basketball program is currently the equivalent of John Wooden’s UCLA program at its peak. Coach Wooden is said to have really admired the women’s game because of their emphasis on fundamentals.

He would be proud of their success.

Let me add that John Wooden was even greater in retirement. Active to the end, he attended games, fund raisers, and would stay however long was necessary to sign autographs and talk with fans. He was signing books a fewyears ago at th eLA Times?UCLA BookFair. The line was seemingly infinite.

Humble, but proud.

And America is proud of John Wooden, an American legend.

Thursday, June 3, 2010

The Political Mugging of Senator Blanche Lincoln

Two term Senator Blanche Lincoln (D Ark) is in the political fight of her life, trying to triangulate between the Scylla of the Left and the Charybdis of the Right.
She is a moderate Democrat, an independent thinker who does not always follow the party line.

The assumption has been that she would lose in November to a conservative Republican.

She might not get there because in this year of anti-incumbency; she faces a well-financed challenge from the left in the Democratic primary.

She won the primary on May 18 by a 45%-42% margin over Lieutenant Governor Bill Halter, but because Arkansas requires a clear majority, the two face off again on June 8.

Conservatives have labeled her “Bailout Blanche.”

Many are viewing the contest as a divisive intraparty battle, similar to that being raised between establishment Republicans and The Tea Party in Republican contests.

I think it’s more nuanced than that, since her opponents, especially the large unions, are politically very sophisticated. They would undoubtedly prefer a moderate Democrat, who would vote with them most of the time, to a conservative, anti-union Republican.

However, if the unions accept the conventional wisdom that she will lose in November, then she is politically expendable. The unions have abandoned her, using the primary to send a message to Democratic candidates everywhere: Support us or we will take you out in the primaries. Labor rarely endorses opponents of Democratic incumbents in primaries, so their support for Halter is a seismic shift. has also heavily supported her opponent.

We are witnessing raw politics in action.

They have decided that she is politically expendable.

They are using her to reaffirm that the key to victory in Democratic primaries throughout the nation goes through the union halls, especially the public employees unions. Union members have a high turnout rate in these races, just as conservatives control Republican primaries, resulting in a polarization of our legislative politics.
One of Senator Lincoln’s sins in the union eyes was that she opposed their card check proposal. She was also ambivalent on President Obama’s healthcare bill, before finally voting for it.

When Lieutenant Governor Halter announced his campaign in March, 4 unions disclosed that they had each pledged $1 million to his campaign. The unions are AFSCME, SEIU, the communications workers and the steelworkers.

Their pronouncements show their real motives.

Gerald McIntee, President of the American Federation of State, County and Municipal Employees (AFSCME) stated “regardless of your past affiliation, if you’re not with us, you are against us.”

The AFL-CIO said its decision to oppose Senator Lincoln should send a powerful message to other Democrats who fall out of step with unions.

Her political assets is that she is in the middle and that She currently serves as Chair of the Senate Agricultural Committee, an important representation for a large agricultural state. Former Arkansas Governor and President Bill Clinton has been actively campaigning for her, and President Obama has recorded an ad on her behalf.

The unions and poured $5 million into Halter’s campaign in the weeks before the May primary, and may be spending as much in the days leading up to next Tuesday’s vote.

Her major financial supporter right now, irony of irony in Democratic primaries, is the Chamber of Commerce. She has been the largest beneficiary of oil and gas donations in recent years, not exactly great timing in terms of the BP oil blowout.

Whether or not Senator Lincoln survives June 8 and November, this election will send a message. If she survives, then she should become a truly independent voice in the senate.

Wednesday, June 2, 2010

What's Wrong With Detroit in Orange County?

Orange County, the O.C., is the nation’s fifth most populous county with roughly 3 million residents, or 1% of the nation’s population. It is a county of contrasting, great affluence and barrios.

A fifth Mercedes dealership just opened in Orange County, while 2 Ford and 2 Chevy dealers closed their doors. Chrysler is down to 6 dealerships, having terminated a strong dealer during its bankruptcy. That site is now a Hyundai dealership. One of the 5 Mercedes dealerships is Fletcher Jones, the largest Mercedes dealer in America.

10,202 vehicles were sold or leased in April, up 7.5% from a year ago. A breakdown of the sales figures reveal that Chrysler and GM are still in poor shape.

Toyota/Scion, the Toyota of multiple recalls, sold 2,380 cars, an increase of 25.7% from last year. Lexus was up 13.4% to 532 vehicles. Toyota thereby captured 27.5% of the O.C. market with its three lines. Honda sold 1,515 vehicles while Ford was up 3% to 696. The Mercedes dealers sold 665 vehicles, up 12.9%. Nissan rose 41.8% to 685 vehicles, while Hyundai was up 39.5% to 417.

The Honda and Toyota sales once again show that owning one of these franchises in Southern California is a license to mint money.

What about Chrysler?

Jeep was down 24% to 133 Jeeps. Dodge dived 49.5% to 125, and Chrysler plunged 59.4% to an anemic 39 vehicles. Obviously, not many erstwhile profitable minivans and 300’s were in the sales mix. Chrysler needs a Hemi moment.

GM did better, but still poorly. It witnessed the bread and butter Chevy line dropping 13% from 370 cars and trucks to 322. The good news for GM is that Cadillac sales rose 48.6% to 110 vehicles. Buick though, one of the 4 preserved GM brands, dropped to 23 vehicles from 28. Buick couldn’t even outsell Chrysler.

GM once tried to save a number of franchises by folding them into a single Buick-Oldsmobile-Pontiac outlet, adding GMC trucks to the mix. Oldsmobile and Pontiac are now history. Buick was saved because of its sales prowess in the growing China market, not because of its marketability in the United States and Canada.

How did GMC do? It was up 9.8% to 112 trucks, but a doubtful omen for some of the older B-O-P-GMC dealerships. The savings grace for many of these franchises is that their owners also sell profitable, expanding import brands.

GM’s orphan brands of Saab and Saturn registered 0 sales, the once wide track Pontiac’s was down to 1, and Hummer stayed even at 6.

While Ford is doing well in the O.C., the same cannot be said for the Lincoln Mercury dealers, two of which closed in the past couple of years. Lincoln sales were essentially flat at 38 vehicles, down 1, while Mercury was down 3 vehicles to a minuscule 9. The Grand Marquis has lost it. No wonder Ford is planning to pull the plug on Mercury, thereby joining Oldsmobile and Plymouth in the non-bankruptcy closures.

In summing up, Toyota, Honda, Ford, Mercedes, and Nissan outsold GM, while Lexus was close.

Detroit, that is, Chrysler and GM, are dying in Orange County, continuing a decades long trend. Their bankruptcies threw them a lifeline, but they’re still on life support in Orange County. One by one, drip by drip, their dealers are closing.

Watch more dealerships close.

An interesting twist in Pasadena is that the family owned Ganahl Lumber and Building Materials Company of Orange County purchased for $10 million the site of a Chevy Dealer which closed in April. Ganahl believes they will generate almost as much in sales tax revenues for Pasadena in lumber sales as did the Chevy dealer.