Tuesday, June 30, 2009

Is it Because Politicos Can or Because They Are Human?

Is It Because They Can or Because They’re Human?

Mark Sanford

John Ensign

David Vitter

Larry Craig

Mark Foley (only sexting)

Newt Gingrich

Vito Fossella

Jack Ryan

Arnold Schwarzenegger

Jim Bunn

Steven LaTourette

Rod Grams

Henry Hyde

Robert Livingston

Sol Wachter

Helen Chenoweth

Dan Crane

John Schmitz

Bob Bauman

Don Sherwood

Don Lukens

Ken Calvert

Bob Packwood

James West

Warren G. Harding

Democrats shouldn’t salivate, for adultery, like corruption and sleeze, is non-partisan and bipartisan. Democrats tend not to be as moralistic or hypocritical as some Republicans. The pendulum will swing back to the Democrats as the majority party will behave like a majority party..

Eliot Spitzer

John Edwards

Kwame Kilpatrick

Gavin Newsom

Antonio Villaraigosa

Tim Mahoney

Marc Dann

Jim McGreevy

Gary Condit

Gary Becker

Mel Reynolds

Bob Wise

Roger Boas

Mike Lowry

Brock Adams

Richard Celeste

Henry Cisneros

Chuck Robb

Sam Adams

Neil Goldschmidt

Wilbur Mills

Wayne Hays

Gary Hart

Gerry Studds

Barney Frank

Joe Waggoner

Austin Murphy

Bill Clinton




Ted Kennedy

Chris Dodd


Andrew Jackson

Thomas Jefferson

Notice that some of our greatest political leaders are on the lists, while others are not. Jimmy Carter only lusted in his heart, but look where it got him.

The public is becoming inoculated to ordinary political sex scandals. They’re no more interesting than the ordinary high speed chase on TV in Southern California. Throw in emails, pregnancies, cancer, trips to Brazil, videos, and it becomes interesting. Some is explainable by alcohol, but alcohol can simply be an excuse.

The French and Italians are much more accepting of sexual peccadillos, and the English have less tolerance, but it happens in every nation, every regime, every type of government (Stalin had a mistress and Chairman Mao liked young girls), and transecends gender. We are dealing with humans. Some are serial adulterers, but most have fallen from grace on a rare occassion.

We could easily add executives, union leaders, clergy, celebrities, sports stars, university presidents, law school deans, professors, students, judges and lawyers, indeed almost any occupation, to the list. Not because we can, but because we are humans, not saints or angels. Most humans are imperfect, and we do the best we can with our lives. Most of us try to live up to high standards, and generally do very well, but others are either immoral or amoral. Some go into politics

Monday, June 29, 2009

The Tal Mahal and I

200KM, 5 ½ hours, 120°, a gauntlet of street hustlers (Johnny and especially Raja), then the entry gate into the beautiful outer courtyard, and through another passageway, the Taj Mahal magically appears in all its grandeur. Nothing else matters; the Taj is larger, more beautiful, perfect, symmetrical, equisate, and magnificent in person than any virtual tour, movie, video, documentary, tv show, book, or postcard can ever convey.

The Taj Mahal is worth the trip.

Forget the casino, the magnificent chain of Taj hotels in India, or even the musician.

There is only one Taj Mahal. Seeing is believing, and seeing what is generally regarded as man’s most beautiful building, is believing.

That I or any other mortal views the Taj, is hardly special since hundreds of millions have preceded us and hundreds of millions will follow.

But for those of us who are privileged to view the Taj Mahal, it is special.

I glazed upon the Taj a week ago, walked its pathways, entered the inner sanctum, viewed the cenotaphs, and marveled at the magnificent white marble. Just like a great work of art, such as the Mona Lisa and The Last Supper, nothing short of being in its presence can convey its magnificence.

The Mugal Emperor Shah Juhan built the Taj over 22 years to mourn his wife, Mumtaz Mahal, who died during childbirth of their 14th child in their 19th year of marriage. His two other wives are buried in lesser accommodations on the broad grounds.

No greater expression of love by a man for a woman. Her dying wish was for a mausoleum. The Taj was built for a woman, but is a gift to the world.

The colors, size, height, architecture, setting, footprint, and symmetry are perfect.

Yet I did not witness all the Taj’s majesty for the famous reflecting pond was seasonally drained. Nor could I stay and watch the colors of the white marble vary with nature’s lighting. Nor did I see it artificially lit up at night.

But I saw enough – the greatest building on earth.

Shah Juhan went into a two year funk, we call it depression, when Muntaz died. That is not good for a ruler. Seven of their children survived to adulthood. A younger son, Aurangzeb, later killed his older brother, imprisoned his dad, Shah Juhan, and claimed the throne. Juhan spent the last 8 ½ years of his life in a prison cell in Agra Fort across the river glazing out on the Taj. His tomb is now next to hers, but is larger in size – the only unsymmetrical piece of the entire Taj. Their actual tombs are a floor below the public cenotaphs, not open to public viewing.

Will I ever get to see some of the world’s other greatest cities or other archeological sites, or such wonders as Angkor Wat, Easter Island, the Eiffel Tower, the Galapagos Islands, The Hermitage, the Louvre, Machu Picchu, the Aztec and Mayan temples, the Great Pyramids of Egypt, Red Square, Stonehenge, Sydney Opera House, Tiananmen Square, Trafalgar Square, or the Parthenon?

Probably a few, especially if they are on a cruise chip tour, but I’ve been unexpectedly blessed to see the Taj Mahal.

If I could see the Taj, anything is possible.

Sunday, June 28, 2009

Impressions of India

Quick – Free association

What comes to mind with the word India?





Gandhi & Nehru

The Great game


Kama Sutra



Khyber Pass



The Raj


Gunga Din

Little Black Sambo

The man Who Would be King


Buddhists, Hindu, Jainism, Muslim, Sikh

Sepoy Revolt

Slumdog Millionaire


Taj Mahal

Temple Carvings

All these and more are India.

Four full days in Delhi/New Delhi/Agra can no more convey the essence, heart and soul of India and its peoples, than four days in San Francisco, Ann Arbor, Ada, Ohio, Tacoma and Seattle, Washington, Wilbraham and Springfield, Massachusetts, and Orange County, California, all of where I have lived, or 4 days visiting New York City or Washington, D.C., will give you America.

Four days cannot provide the culture, diversity, essence, ethnicity, foods, heart, mores, regional prejudices, religions, and soul of the country, but they can provide flavors, glimpses, and vignettes.

The first impression was the heightened state of security at Indira Gandhi International Airport in Delhi. Uniformed paramilitary (CISF) with semi-automatics patrolled the airport with a strong presence. We forget that India has been at war with terrorism decades longer than the United States. Over 110,000 Central Industrial Security Force guard the nation’s airports, government buildings, parks and monuments, and industrial facilities.

The second impression was one of the hustle of some to earn a tip, any tip. As we were leaving the terminal, an unsolicited guy suddenly appears out of nowhere, grabs a suitcase, carries it to the waiting car, and sticks out his hand. The car is not going anywhere until he receives the tip.

And the third impression was the 24/7, 365 days construction around the airport. India is building.

None of these three are on my list, but they are integral to India today.

Churchill once said India was not a country. What he said was that “India is merely a geographical expression. It is no more a single country than the equator.” He was right in that historically only the British conquered and held the Subcontinent for any length of time.

Churchill was right in that his India split into India, Pakistan, and Bangladesh.

Churchill was wrong. The British lowered their flag in 1947 and the Indian tri-color was raised.

Today’s India is a great country.

India is one of the greatest and oldest civilizations.

India is a country of color and contrast.

India is a country of diversity in which the ethnic and religious diversity are proudly worn and displayed.

India is a culture in which the affluent youth model themselves after American culture, values and mores.

India is not a hegemony, a monolithic people. Like America it is a melting pot, not of the world, but of the assimilations of waves of Eurasian peoples, religions, and conquerors with some British thrown into the pot. Persians, Afghans, Mongols are in the mix.

India holds onto its heritage, preserving some of the world’s greatest archeological and historic sites.

India is chaos, bordering on anarchy, but India works.

India is Bollywood, Bindass videos, and Bindass movies, and Bindass music.

India is a country which has shed its socialist past and embraced capitalism.

India has created a middle class of 300-350 million people (the entire population of the United States), but still has 600 million in abject poverty.

India is entrepreneurism, even at the street level of the sidewalk chef.

India is the diamond, gold, and jewelry trade.

India is energy.

India is service.

India is hustle, in every dictionary sense of the word.

India is the birthplace of great religions – Buddhism, Hindu, Sikh, and Jainism.

India is a nation of castes eventhough the India Constitution of 1947 prohibits discrimination on the basis of caste.

India is green – hydro, CNG, and diesel.

India is a country of small cars; everything is in miniature. The two largest cars I saw were one Honda Accord and one Toyota Camry.

India is a land of richness and squalor.

India is pathos.

India is the austere.

India is resiliency.

India is relentless construction.

India is a nation whose expatriates have enriched the world.

India is a country of higher education, with schools of business, computer science, engineering, law and medicine. (The University of Delphi has twice as many applicants as UCLA).

India has unleashed the genius of its people.

India is high tech, cell phones, call centers, and outsourcing, even for American lawyers.

India is a country of low income housing: tent cities, canvas hutches, corrugated tin hutches, thatch grass hutches, fabric hutches, makeshift shanty towns, residential construction sites at night when the construction workers have left, and just sleeping on the sidewalk- all less expensive than FEMA trailers.

India is a land of infinite, huddled masses, similar to the Lower East Side of a century ago.

India is now Indian, Japanese, and Korean brand names. I did see though the American names of Aquafina, Camel, Chevrolet, Citibank, Coke, Exide, Ford, Ford tractors, John Deere, Kelvinator, Kimberly Clark, Kohler, Lays, Lees, Levis, MacDonalds, Marlboro, MetLife, New Holland, New York Life, Nike, Pepsi, Pizza Hut, Pringles, Reebok, Revlon, Ritz, Seven Up, Subway, Tropicana, and Whirlpool.

I know the major U.S. hotel chains are in India, but I’ll probably never be able to find them.

I did not see fakirs, holy men, snake charmers, or temple carvings, but they must exist. I also saw no camels, cobras, elephants, monkeys or tigers, but they exist.

India is cricket.

The key to tourist survival in India is hydration from bottled water.

India is a state of mind

India is mystery.

India is magic.

The two images indelibly inscribed in my memory are The Taj Mahal and a young, beggar mother who stuck her small, naked baby onto the car window.

Four days is not enough; the allure of India is too seductive.

Wednesday, June 24, 2009

Random Notes On the Road to Agra

The primary rule of the road is show no quarter; no quarter is asked, and none is given or expected. No mercy, no vacillation, no hesitation. Just do it! Go for it! New York’s finest cabbies might, just might, qualify.

The guide books say Agra is 200KM from Delhi, a 3 ½ hour ride. How can a 124 mile trip take 3 1/2 hours? It can’t. It was 5 ½ hours going and 5 returning.

200 miles on a four lane, more or less, road from Delhi to Agra. The “highway” is best described as the PCH without lanes, berms, shoulders, medians, sidewalks, rules, or police.

The surrounding communities and their detritus spill out onto, over, and into the road.

Vehicles mostly go the same direction, but not always. 45°, 90° and 180° approaches are normal.

If a vehicle breaks down, it is fixed in place on the road. No notices are given of highway construction or road work ahead until you see the actual workers scared for their lives. Their presence is warning enough.

Did I say “vehicles?” I misspoke.

Anything propelled by feet, hooves, or wheels, except for boats, trains and planes

The following are on the road:

Three wheeled motorized rickshaws
Farm Equipment
Construction equipment

But no joggers. It’s just too damn hot to jog!

The carts, oh the carts: horse carts, mule carts, oxen carts, bicycle carts, hand carts, pedal-carts, push carts, tractors towing carts, carts towing carts. The carts haul people, cargo, pipes (24’ long), poles, and farm produce. My favorite was a man in Agra towing a cart carrying away a dead cow.

The small motorcycles can hold up to six, children included. Helmets are highly optional.

Nothing matches the ubiquitous, utilitarian, and seemingly prolific, motorized rickshaws. They serve as taxes, buses, and lorries. They are the people movers of India (Disney take note). They seat up to 14 (uncomfortably), not including children, with additional external straps for hangers on. The only air conditioning is, of course, natural.

Cows are sacred to Hindus. Cows graze; cows graze on the side of the road, on the occasional median, and if left untethered, on the road. They also graze in the makeshift dumps on the side of the road and cool off in the ponds next to the dumps.

If driving exhausts you, just pull off (sorta) to a makeshift rest stop. Facilities are the bushes.

The horn, the horn is the most critical part of the vehicle – not the ignition, transmission, clutch, brakes, mirrors or steering wheel. The horn is the only warning given, but not out of a regard for others on the road, but only as a matter of self-preservation as you pass within a few millimeters of the others – all of whom are expected to defer to the honker. Turn signals are less common than in Boston.

Don’t stop for anyone or anything – treat men, women, and children equally as obstacles on the road to the Taj.

Never complain again about driving in New York, Boston, or Los Angeles.

But it works. I saw absolutely no accidents.

My Passage to India

28 hours of airline travel, 20 hours on three flights, 30 hours total travel time, 12 ½ hour time change, two days of airline food with little exercise.

Left John Wayne/Orange County/Santa Ana Airport at 8:10AM on Tuesday, June 16, arrival time in Indira Gandhi Airport 10:45PM on Wednesday June 17. Passport control, swine flu control, baggage claims, customs, arrival at Guest House for total of 30 hours, midnight temperature 100°.

All for 4 full days and nights in New Delhi.

And yet, let’s take a historical perspective. Conquerors and migratory Euro-Asians needed years. The British, Dutch, French, and Portuguese took 6 months in their tiny, rickety, rat and flea infested, moldy, vulnerable, wooden sailing ships. So did the soldiers, merchants, bureaucrats, families, carpet baggers, missionaries, and adventurers who followed.

Now imagine until 150 years ago, no steamships, railroads, or Suez Canal. The land route through Egypt wasn’t that hot, but it certainly was. The British had to sail down Western Europe, cross Gibraltar and the Canary Islands, head west to Brazil (the trade winds), and then proceed along the western African coast until hanging a left at the Cape of Good Hope.

The passengers faced a limited, stale, salty diet, risks of running out of water, violent storms contrasted with still winds, primitive medical provisions, no Tylenol, Advil or aspirin, with a great risk of death on these vessels, all without upgrades, extra leg room or frequent sailing miles, not to mention no GPS.

If lucky, the trip could take 3-5 months, hoping to get to India in time to avoid the monsoons. Of course, with bad luck, the trip could be interminable. The Pilgrims on the Mayflower had a 66 day voyage across the 3,000 mile Atlantic, and managed to land off-track in Provincetown on Cape Cod rather than the Hudson River. The British had 10,000 miles to India.

“Are we there yet” had special significance in the absence of dvd’s, IPods, wifi and the internet.

They lacked deodorants, mouthwash, shots, showers, soap, sunscreen, and toothpaste. None of the modern capitalistic bourgeois decadence of today’s cruise ships for them. They must have been some kind of scurvy lot. Psychological counseling was obviously unavailable. Air conditioning was whatever the wind blew.

They escaped though passports, visas, security checkins, and agricultural inspection stations.

We take for granted the ease of global travel to see families and friends, for business and employment, study abroad, or just checking out exotic locales. The occasional frustrations, disappointments, and cancelled flights are as naught compared to our hardy predecessors.

We’ve all been on flights from hell, stayed in overrated hotels, ate at poor restaurants, been disappointed by arrangements, and ripped off, but so what?

The trip back simply reversed the route for another 30 hours, but with the time on my side, was all on Monday. If I were a practicing attorney I would have taken client files to read on the travels, and billed 30 hours in 6 minute increments in one day. That would make partner at any law firm.

60 hours of travel to give a talk on Friday and visit The Taj Mahal on Saturday – no brainer; I’ll do it again in an instance.

The British, of course, would probably be just embarking on their trip, literally, of a lifetime.

Monday, June 15, 2009

R.I.P. Checker Motors: 1922-2009

Two once great automobile manufacturers had their fate decided in bankruptcy court last week. Chrysler, after stiffing dealers, secured creditors, unsecured creditors, pensioners, and products liability claimants, was unceremoniously dumped onto a willing Fiat. The dowry was paid by taxpayers.

On Monday, June 8, 2009 a bankruptcy judge in Grand Rapids, Michigan approved the sale of Checker Motors’ plant to two Canadian parts manufacturers for $1.6 million. They will close the facility at the end of June, lay off the remaining 125 workers, and move the tools and equipment to Canada. Checker Motors of Kalamazoo, Michigan will cease to exist after 87 years.

The company was, ironically, founded as the outgrowth of $15,000 in bad debts. Morris Markum collected on the assets, fulfilled a contract, and Checker Motors was formed, originally under the name Parmalee. From 1922-1959 it manufactured only commercial taxi cabs, and in 1960 entered the consumer market on a small scale with the Super Superba and Checker Marathon. They were distinctive, a throwback to the days when cars were made of heavy metal rather than thin sheets of tin.

The iconic Checker cab was a sturdy (that’s a good word for a cab plying the streets of New York), non-aerodynamic cab. Its ruggedness was because it was designed from the ground up to be a taxi cab rather than as a regular passenger car modified to be a cab. A stretched version, predecessor of today’s airport limos, was the Checker Aerobus.

Checker Motors owned operating cab companies under various names, such a Checker Cabs and Yellow Cabs. It obviously manufactured the cabs driven by these companies. We call it vertical integration, but the Justice Department called it monopolization. Checker cab companies owned 86% of the cab licensees in Chicago, 15% in New York City, 100% in Pittsburgh, and 58% in Minneapolis.

The biggest problem with the Antitrust Division of the Justice Department is that it often doesn’t bring enough actions. For example, The Johnson Administration brought suits against AT&T and IBM, but decided not to prosecute GM for monopolization or attempted monopolization - unfortunately for the long term viability of Detroit. (As a sidebar, IBM won the case, enriching the partners at Cravath, Swain & Mooree, and AT&T settled, breaking up the phone company into Little Bells. The pieces have since been reassembled into AT&T by Ed Whitacre, Jr., ironically recently named as the new Chairman of GM).

This time though, The Justice Department brought one suit too many against a minnow in a Big Three sea of whales. Checker ultimately won the suit in 1948, but the writing was on the wall.

It subsequently filed its own antitrust suit in 1965against Chrysler, which was giving $183 rebates to cab companies which purchased Plymouths. Checker lost.

Competition finally caught up to Checker, which ceased manufacturing vehicles in 1982. It lacked the economies of scale possessed by the Big Three. It continued with its other major division, parts manufacturing. Its biggest customer is GM, which explains the January 16, 2009 bankruptcy filing.

The last Checker was retired from service in New York in 1999. It received an obit in the New York Post. If you have never seen a Checker Cab, check out reruns of Taxi. The cabs in the garage are Checkers.

Checker is notable in the Civil Rights Movement in America. It was the first to hire African American drivers and the first taxi company to require their drivers to pick up all fares – not just whites.

Goodbye Checker; you deserved a better fate.

Friday, June 12, 2009

David Letterman Has Lost It

Jay Leno passed the torch of The Tonight Show to Conan O’Brien. Letterman is finally, decisively beating out The Tonight Show. He just signed an extension of his contract with CBS.

So how does he celebrate?

With incredibly outrageous attacks on Governor Sarah Palin and her daughter Tuesday night.

Late night comedians specialize in humor, including political humor. Good taste is not their forte.

Yet, Letterman’s “jokes” were as despicable as Don Imus’ comments about the “Nappy-haired” female basketball players at Rutgers. Had Letterman stated that Alex Rodriquez had knocked up Hillary Clinton’s daughter, he would have been off the air as quickly as Imus.

He commented on the Governor’s trip to New York, stating that “The hardest part of her trip was keeping Eliot Spitzer away from her daughter.”

He didn’t stop with the former governor of New York. He also “joked”: “There was one awkward moment during the 7th inning stretch; her daughter was knocked up by Alex Rodriquez.”

Letterman claims he was thinking of Palin’s now 18 year old daughter, Bristol, who gave birth last year as a single mom. However, Bristol was back in Alaska. The Governor was accompanied by her 14 year old daughter, Willow. Hence, Letterman’s tasteless remark could reasonably be construed as advocating statutory rape of a 14 year old.

Whether Bristol or Willow is not the issue; these are not bad taste jokes. They are sick and perverted. They should not be said “in humor” about anyone’s daughter. That David Letterman would even think such a thought, much less say it, shows he has lost his touch

They are also highly offensive to Alex Rodriquez and Eliot Spitzer, who many New Yorkers would like to see back as Governor. Whatever may be said about the sexual proclivities of Alex and Eliot, robbing the cradle, much less statutory rape, has not been one of their vices.

Then came a statement about the Governor herself.

The number 2 answer to Dave’s Top Ten List of Sarah Palin’s Trip to New York is sick political humor. It was “She bought makeup at Bloomingdale’s to update her slutty flight attendant look.” Overlooked in the controversy is the gratuitous sexist libel of flight attendants.

Isn’t this the same Governor Palin who received criticism during the campaign for $150,000 in clothes and makeup from Saks Fifth Avenue and Neiman Marcus?

Sarah Palin though is fair game. As the VP candidate, and thus a highly visible public figure, she must take whatever verbal abuse is hurled at her short of outright lies.

The line has traditionally been drawn on the candidate’s family, especially their children. For example, the problems of Al Gore’s son appropriately appeared in a few column inches on an inside page.

Letterman’s comments raise the issue of a double standard in the media between criticizing conservatives versus liberals. Democrats viciously attack conservative women and minorities, such as Governor Palin, Justice Clarence Thomas, and Miguel Estrada, but then assert that any criticism of Supreme Court nominee Sonia Sotomayor would be racist and sexist. Democratic Congressman’s Patrick Kennedy’s drunk driving into the Capitol received little press compared to Republican Congressman Vito Fosella’s DWI.

Making fun of a teenager’s pregnancy is disgusting. Over 1/3 of the births in America are to single moms. Indeed, in 2005 36.8% (over 1,500,000) of all births were to single moms. OctoMon just gave us 8. The teen birth rate for non-Hispanic blacks was 60.9/1,000 women, for non-Hispanic whites 26/1,000, and for Hispanics 81.5/1,000.

Compassion, not sexism, is called for in these situations.

My parents were married, but split before my birth. I thereby grew up the son of a single mom. My sympathy goes to the mother and child in every such situation.

Several years ago a single mom was my research assistant for two years. She was one of the best research assistants I ever had. She had the child as a young teenager, but went to high school, college and law school on a straight line. She is now a highly successful lawyer. God bless her!

Letterman had a legitimate grievance with Senator McCain during the election since McCain stiffed Letterman’s show. That I understand, but take it out on the Senator – not on his running mate’s daughter.

Letterman quasi/ sorta non-apologized apologized Thursday night saying that his remarks were jokes, that he often does tasteless jokes, was guilty of poor taste, and invited the Governor on his show. The Palins’ refused his offer.

He also, of course, repeated the jokes to the audience.

It Just Ain't Detroit's Year; Even the Redwings Lose

2009 has not been good to Detroit.

Population keeps dropping while unemployment rises.

Unemployment is 22% in Detroit.

Homes can be purchased for as low as a bargain $1,000.

Unemployment is over 12% in the state as Michigan races to stay ahead of California.

MoTown is a museum.

Even the three casinos are losing.

The vastly expanded Detroit Institute of Art (nee Art Museum) reopened, but who knows?

Detroit just can't get a break.

The industry is in, out, in and out of bankruptcy.

Chrysler couldn't get it done in Detroit, so now they're Italian. The German marriage didn't work out. Neither did Cerberus. the three headed dog.

Detroit can't get a break.

The two Detroit newspapers are down to publishing hard copy three days a week, while the Ann Arbor News is now solely online.

Detroit can't even get the news.

Michigan State came close in the NCAA basketball tournament, but lost in the finals to North Carolina. I rooted hard for the Spartans, but they couldn't do it - in Detroit.

And now, just an hour ago, the heavily favored Detroit Redwings lost 2-1 the final game in the Stanley Cup finals to the Pittsburg Penguins - in Detroit.

Imports couldn't save either GM or the Redwings.

Dretroit just can't get a break.

Governor Granholm was passed over by the Obama Administration for his cabinet.

Too bad.

The Detroit Lions, owned by a family named Ford, set a record for futility, a perfect 0-16 season in the NFL - at Ford Field - in Detroit.

The Detroit Pistons couldn't get it done - in Detroit.

Chuck Daly died. So did Bill Davidson.

Detroit can't get a break.

Even Checker Motors of Kalamazoo just died.

My beloved Michigan Wolverines stank up the Big House, but that was in Ann Arbor. The women's softball team lost out to two SEC teams, just like Big Ten Football.

Listen up Detroit, Michigan's basketball team showed signs of life so wait until next year.

This ain't Detroit's year, but maybe next year.

The former mayor just got out of jail.

There's hope for all.

Tuesday, June 9, 2009

The New Tax Pledge for California, Courtesy of AFSCME

Once upon a time in a political era seemingly so far away, politicos understood “The Pledge.” William Loeb, publisher of the Manchester Union Leader, required candidates in New Hampshire, Republican and Democrat, to take The Pledge. It was especially prominent in the Republican primary for President. Those who refused to take The Pledge earned the acerbic wrath of Loeb.

The Pledge was to not raise broad based taxes, specifically income and sales tax. New Hampshire still lacks both.

The Pledge seems relatively easy for Republicans, but Senator Dole flubbed twice in taping it during the 1988 Primary. He never took The Pledge.

The Pledge spread from New Hampshire. It is often asked of Republican candidates for state and local office throughout the country. Republicans sign with alacrity.

However, The Pledge is not self-supporting. Republicans sometime stray from it once in office. That candidates do not always keep their promises upon election is hardy a shocking proposition, but it is disappointing. The politicians are gambling that voters have a short memory.

President George H. W. Bush lost reelection the day he breached his “No New Taxes” Pledge. A sizable percent of Republicans voted in protest for H. Ross Perot, throwing the November election to Governor William Clinton. Bush’s promise had passed the point of being a mere promise; it had become a covenant with the voters.

A test of voter outrage is currently underway in California. The California Legislature enacted substantial, and highly unpopular, tax increases in February. Six Republicans, three in the Senate and three in the Assembly, voted for the increases, providing the required 2/3 vote for tax increases.

The voters repudiated the taxes in May. One of the six, Assemblyman Anthony Adams, is the subject of a recall campaign. Adams had taken the “No New Taxes” pledge, then betrayed his constituents. If the recall qualifies for the ballot, he will probably be unceremoniously tossed out of office.

An opposite version of the pledge is circulating among Democrats in Sacramento. The American Federation of State, County and Municipal Employees (AFSCME) is asking Democrats to sign a pledge to support $44 billion in new or increased taxes on the wealthy, oil companies, tobacco and other industries, products and people.

No incumbent has signed this pledge to date. They understand that a hostile public voted down their 5 tax increases and diversions by a roughly 2-1 vote. Incumbents seeking other elective positions faced a hard fate at the polls.

The natural instinct of Democrats is to raise taxes. The first rule of politics for incumbents is to get reelection. That trumps an in your face “I will raise taxes” pledge.

Monday, June 8, 2009

Governor Schwarzenegger's Radical Flat Tax in California

California is bankrupt, but Governor Schwarzenegger has a radical idea.

The California Legislature has no ideas, but Governor Schwarzenegger has a thoughtful idea.

Voters rejected new taxes, tax increases, tax borrowings, and tax extensions, but the Governor Schwarzenegger has a course reversing idea.

The legislators agree that taxes are off the table as California is about to shatter the social contract, but old habits die hard as some legislators wish to impose a $.25/ bag tax on plastic bags, add a $1.50/pack tax on cigarettes, and tax marijuana, but Governor Schwarzenegger has an taxing idea.

80-90% of California’s budget is non-discretionary, including federal mandates, state mandates, and voter improved initiatives, but Governor Schwarzenegger has an out of the box idea.

No more legislative stalemates with Governor Schwarzenegger’s cutting edge idea to cut the Gordian Knot.

Caught between liberal Democrats and conservative Republicans, public employee unions and employers, Governor Schwarzenegger has a trifurcating idea.

Some may be wed to the failed policies of the past, but not with Governor Schwarzenegger’s visionary idea.

Some want to call a constitutional convention to change the California Constitution, but Governor Schwarzenegger has a incisive idea.

If California leads the nation, then Governor Schwarzenegger has a universal idea to forever change state finances.

Confused and befuddled by the federal and state income tax codes, Governor Schwarzenegger has a simplifying idea.

Long discussed, the focus of arcane academic seminars and symposia, the subject of editorials, but never implemented until now, a favorite of Republicans, and the essence of Doric simplicity, the non-academic Governor Schwarzenegger proposes a flat tax for California.

Last Friday he suggested to the Sacramento Bee that the special committee studying the California taxation conundrum consider all ideas, including, he emphasized, a flat tax.

Admittedly the tax is wholly regressive, but is simplicity incarnate. Simplicity is its virtue.

Admittedly the tax is wholly regressive, but applies equally to all. Fairness is its virtue.

Admittedly the tax is wholly regressive, but the Democrats might like Governor Schwarzenegger’s radical idea, especially after they add low income exclusions.

The Governor has proposed a rate of 15%, which matches the public opinion favorability ratings of the legislature.

Last time I checked my math 15% of 0 is still 0.

Saturday, June 6, 2009

GM and Destructive Capitalism

The great Austrian economist Joseph Schumpeter popularized the concept of the creative destruction of capitalism. The genius of capitalism is that it is always changing by embracing entrepreneurs and innovation. But in doing so, existing enterprises will often be destroyed or consumed.

The new industries bring wealth and prosperity to the people, but at the cost of failure, unemployment and poverty to existing businesses and devastation to their communities and investors. New markets, industries, and competitors emerge as others decline.

Capital inexorably flows to growing businesses and flees the declining industries.

Westfield, Massachusetts earned the nickname of “Whip City” because it had several factories that manufactured buggy whips for the horse and carriage industry. The onset of the horseless carriage doomed the buggy whip industry, but the country prospered as wealth was transferred to Michigan.

General Motors had a run of 77 years as the largest automobile manufacturer in the world, but could no longer compete with more nimble competitors, Toyota, Honda, Nissan, BMW, Mercedes, and now KIA. Capitalism is working, and now Michigan is devastated.

77 years is an eternity in business history. Apple had a short rein with its Apple 2+ before IBM introduced the PC, and now IBM is out of the market it pioneered. The mini computers, which weighed in below the large mainframes, lasted about two decades. DEC, DG, Prime, and Wang are consigned to the Computer Museum in Boston. The rise of Silicon Valley was at the expense of Route 128 and Massachusetts. Microsoft conquered all rivals, especially Netscape, until Google emerged. Someday a new company will surmount Google; it’s inevitable.

Once upon a time, not too long ago, Sony strove mightily with the Walkman. Apple trumped Sony with the IPod, and now Sony is sinking. Digital photography killed what was left of Polaroid.

The LP and reel to reel gave way to the 8 track, cassette, cd, and now the MP3 player.

The Dow Jones average of 12 stocks appeared on July 3, 1884. The 12 original stocks were American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feed, General Electric, Laclade Gas, National Lead, Tennessee Coal & Iron, North American, United States Leather, and U. S. Rubber. Only GE is still in the Dow Jones.

The Dow Jones 30 industrials were announced on October 1, 1928, just in time for the Great Depression. They were Allied Chemical, American Can, American Smelting, American Sugar, American Tobacco B, Atlantic Refining, Bethlehem Steel, Chrysler, GE, GM, General Railway Signal, Goodrich, International Harvester, Mack Truck, Nash Motors, North American, Paramount Publix, Postum Incorporated, Radio Corporation, Sears Roebuck & Co., Standard Oil (N.J.), Texas Company, Texas Gulf Sulphur, Union Carbide, U.S. Steel, Victor Talking Machine, Westinghouse Electric, Woolworth, and Wright Aeronautical.

None of the automobile and truck manufacturers are on the list anymore.

I have shopped over time at the following discount stores: Ames, Arlans, Bradlees, Caldors, Kings, S. Kline’s on the Square, Korvettes, Murphy’s, Rink’s Bargain City, Topps, White Front, Woolco, and Zayre’s. Before them, I shopped at S. H. Kress, S. Kresge’s, J.J. Newberry’s, F. W. Woolworth, and W.T. Grant. Some I miss, and some I don’t.

America is much better off with Wal-Mart and Target.

Do these department stores ring a bell? A & S, Alexanders, Bon Marche, Broadway, Bullocks, Elder Beerman, Capwells, City of Paris, Emporium, Foleys, Frederick & Nelsons, G. Fox, Gimbels, Hale Brothers, J. H. Hudson’s, I. Magnin, Joseph Magnin, Lamsons, LaSalles, Lazarus, Leader, Liberty House, Lions, Marshall Fields, May D & F, Robinson May, Rikes, Shilletos, Steigers, and The White House, Been to all of them, but now stuck with Macy’s.

I’ve bought electronics from Computer City, Lechmere, Circuit City and The Good Guys, records from Blockbuster, Camelot Music, Discount Records, Record Factory, the Wherehouse, Tower Records and Virgin Records, and books from Crown Books and Tower Books. I’ve looked in Crazy Eddie’s and Twitter, and Hermans Sporting Goods, but never bought from them.

I’ve flown Aloha, Eastern, North Central, Pan Am, Peoples Express, Piedmont, PSA, Reno Air, TWA, and Western., and banked at Ann Arbor Bank & Trust, BayBank, Crocker-Citizens, First Interstate, and SIS. All gone!

I’ve been to Fred Harveys, Lamonts, Mervyns, Montgomery Wards and Service Merchandise, eaten at Sambo’s, and shopped at Brooks, Cunningham, Dart Drugs, Guy Drugs, Gray Drug Stores, Longs Drugs, Pay’n Save, Payless, Peoples Drugs, Owl Rexall, and Thrifty’s.

What ever happened to Ernest, Builders Emporium, Grossman’s (blew a tire on a nail in one of their parking lots), Home Base, House 2 Home, and Pay’n Pak? Home Depot and Lowe’s killed them in the marketplace.

When I started teaching law in 1972, the large steel companies were U. S. Steel, Bethlehem Steel, Inland Steel, Jones & Laughlin, Kaiser, Youngstown, Republic, National, Sharon, and Armco. Only U.S. Steel survives. Nucor was just beginning.

Creative capitalism. The survivors emerge stronger than ever, and the economy prospers rather than stagnates.

GM is dead, but capitalism thrives, if we let it.

Tuesday, June 2, 2009

R.I.P. General Motors: 1908- September 14, 1970

General Motors didn’t die on June 1, 2009 when it entered Chapter 11. yesterday was just the formal ceremony. GM’s death was ordained on September 14, 1970. 400,000 UAW workers struck GM in a 67 day national strike. 138 plants were shut in the United States and another 7 in Canada. The workers huddled around portable fires in the freezing cold November mornings as they maintained solidarity and Chrysler, Ford, and American Motors continued production.

GM lost. Instead of gaining relief from wages, benefits, and inefficient work rules, GM gave 13% pay raises, and never really fought the Union again. Gold-plated pension (full retirement benefits after 30 years on the job) and medical plans followed.

GM’s inexorable downward spiral ensued. By the time of the 2 day national strike against GM in 2007, the company only employed 73,000 UAW workers. Its market share was down to 23%, while the Japanese kept growing.

If not September 14, 1970, then what about October 15, 1973 when the Arab Oil Embargo cut off oil exports to the West, driving up oil prices. The embargo continued until March 1974. The Arab countries were protesting the Yom Kipper War and Israel’s occupation of Arab lands.

Americans turned to conservation and smaller cars. Toyota made its initial inroads into the American market with its small, well-built Toyota Corona. Honda and Datsun/Nissan followed.

GM spent four decades trying to design a good small car while quality and market share deteriorated. The Buick-Oldsmobile-Pontiac (BOP) cash cow, which dominated the mid-size market, lost its way. GM never recovered. A long series of poorly designed, poorly built, overpriced vehicles emerged from GM’s factories. Names like Chevelle, Chevette, Vega, Cimarron, Allante are prime examples. Oldsmobile and Pontiac are history, and Buick survives only because it is a large seller in China.

We could also choose May 26, 1971, the day Don MacLean recorded “American Pie.” He “drove his Chevy to the levee, but the levee was dry,” foretelling the future – the day the music actually died.

Another possibility is July 31, 1990, when Roger B. Smith retired as Chairman of the Board and CEO of GM. Smith, best known for being reviled by Michael Moore in “Roger and Me,” was the last visionary leader of GM. He recognized that GM could not survive in the long run without radical change. Poor quality and high prices were killing the company.

He invested extensively in robotics to cut labor costs and improve quality. He diversified the company by acquiring Hughes Aircraft and H. Ross Perot’s Electronic Data Systems (EDS). He reorganized and restructured GM. He also brought Saturn to the market.

Of course, almost all his efforts were unsuccessful due to poor execution. GM had become an inertial blob. (Robots became attracted to each other and started painting each other instead of cars coming of the line). With Smith’s retirement, the revolutionary Saturn, the last chance for a changed GM, lost its patron.

Let us note though that while GM owned Hughes, it brought us satellite TV, DirecTV.

Smith’s successors have essentially been clock watchers, watching time run out on the corporation.

Perhaps GM’s fate was ordained on an unknown date in 1950 when Professor Arie Haagen-Smit at Cal Tech identified auto exhausts (sunlight, unburnt hydrocarbons and nitrogen oxides) as the cause of LA’s smog.

Let us also note that the City of Detroit entered is death spiral on July 23, 1967, when a police raid set off five days of riots – riots that burnt and tore the heart out of the once great city. Gordon Lightfoot sang about “Black Days in Detroit” in which 43 died, 467 were injured, over 7,200 arrested, and over 2,000 buildings burnt down.

We could also point to March 22, 1966 when James Roche, President of General Motors, publicly apologized to the United States Senate and Ralph Nader for its campaign of harassment against Ralph Nader. GM’s private detectives were arrested for trailing Nader into the Senate, where he was scheduled to testify about unsafe cars.

The episode made Nader a folk hero, his book Unsafe At Any Speed a best seller, and dented any aura of goodwill GM had with legislators. From then on, Detroit was progressively on the losing side of pollution control, auto safety, and fuel economy legislation.

One final alternative is April 3, 2006 when GM sold 51% of GMAC to Cerberus, thereby losing control of its captive finance company which financed GM car sales.

Pick your date, but I’m sticking with 1970, in hindsight a Pyrrhic victory for the Union.