Monday, February 28, 2011

Fleeing Legislators: Illinois' New Industry

State senators from Wisconsin and representatives from Indiana have fled to Illinois, seeking refuge. Illinois has proven hospitable, building a whole new hospitality industry to replace its dying industries.

A proven sanctuary for fleeing solons is recession proof. The economic multiplier will work, as a supporting infrastructure develops, including the always presents lawyers, and cash only operators. Legislators bring staff, lobbyists, and companions.

Illinois’ Governor Pat Quinn said “Illinois is always open.” That’s a proven fact.

Illinois is a proven green state when it comes to openness. It sets the record with 4 governors convicted of corruption and an additional two acquitted. A state, whose legislature once tried to deed the entire port of Chicago, to the Illinois Central Railway, is open.

Illinois’ location is providential. All roads, trains, and planes go through Illinois. The services can easily be marketed to other states with a historic supply of Pols on the Run or the Take, including Kentucky, Tennessee, West Virginia, Connecticut, Massachusetts, New York, New Jersey, Rhode Island, Maryland, and all points south.

For entertainment, the motels can set up “Let’s Make a Deal” and “Dialing for Dollars.”

Cable will show reruns of The Fugitive.

Many details still have to be fleshed out:

Do Chicago Rules apply statewide?

Will Happy Hour be 24/7?

Are the hospitality refuges union or non-union?

Can the state legislators’ per diems be credited to their bills?

Do the hotels and motels have to maintain a register of calls?

Will the services extend to members of Congress, governors and judges?

Do extended stays receive discounts?

Will a frequent sleeper/refuge points plan be offered?

Is it limited to just Democrats?

Will refuge be limited to legislative protests, or will it extend to those fleeing civil and criminal process, recalls and impeachment? Fleeing felons and fleeing legislators can overlap like Venn diagrams.

Will other states provide reciprocity to Illinois politicians?

The last three issues are critical because America knows that sooner or later, probably sooner, Illinois is open for business, ranging from Governors down, or is it up, to Chicago Aldermen.

Friday, February 25, 2011

Were the Obamas Invited?

Did You Receive Your Invitation to the Royals Wedding?

The Royal Wedding – the wedding to date of the century and the New Millennium

A wedding that is worth a fortune to the British economy

A wedding in which the bride and groom enter without dark secrets, ignorance, or innocence. The beautiful young couple have been cohabiting with the blessings of the Royal Family.

So have you received your invitation?

I haven’t, but I can run a copy off on-line.

1900 invitations were sent, but not one to the President of the United States.

The Beckhams received their invitations, but not the Obamas.

Scores of crowned heads, some in exile and some from former colonies, received their invitations, but not one at 1600 Pennsylvania Avenue.

Elton John, who was so dedicated to Lady Di, received an invite, as did Kayne West, but not The White House.

Prime Minister David Cameron is attending, but not the President.

The President received the same non-invitation as Fergie and President Sarkozy of France.

The President, who was so big during the campaign on twitter and the latest technology, did not even receive an ebrite.

He was shunned.

Shouldn’t the special relationship between America and England warrant an invitation?

Technically, the Royal Wedding is a matter of domestic policy in England. Thus the Royal Family need not consider foreign relations in the invites. Certainly they have forgiven us for those misunderstandings of a couple of centuries ago.

Multiple choice question: Why didn’t the President receive an invitation to the Royal Wedding?

A. The British Government, in the aftermath of 9/11, reaffirmed its special relationship with the United States and the United Kingdom by presenting the White house with a bust of Winston Churchill, the “Churchill Bust.” The great British leader’s mother was American. President Bush placed the Churchill Bust in a prominent place in the Oval Office. One of President Obama’s first acts was to send the Churchill Bust back to England.

B. When then British Prime Minister Gordon Brown visited the United States, he engaged in the traditional exchange of historically significant gifts. President presented the Prime Minister with 25 American movie DVD’s and two plastic models of Marine I. American DVD’s don’t play in standard British players.

C. A spokesman for the Obama Administration stated: “There’s nothing special about Britain…No special treatment.”

D. When visiting England in February 2010, the President presented Queen Elizabeth a personalized IPod.

E. The President demonized BP during the Gulf Oil Blowout, threatening a major income source to British pensioners.

F. The Obama family believes his grandfather was tortured by British soldiers 6 decades ago during Kenya’s Mau Mau Uprising.

G. The President is a megalomaniac whose presence will detract from the solemnity and beauty of the ceremony.

H. All of the above.

Thursday, February 24, 2011

The Incredibly Shrinking Borders

Tom and Louis Borders founded a used book store in Ann Arbor in 1971. It was a success, and soon they devised an inventory control system to wholesale books to other book stores.

Borders Bookstores filed its long anticipated bankruptcy petition on Tuesday, February 16. It listed $1.27 billion in assets and $1.29 billion in liabilities.

That’s not when it died – only a formal date. Theoretically it still breathes through Chapter 11.

Borders has been on a death spiral for years, just like Circuit City, Pan Am, and A & P. The ever-shrinking Borders shrank from 1,249 stores in 2003 to 642 before the bankruptcy filing. It closed 219 stores in 2009, 45 in 2010, and sold its Ann Arbor headquarters in October 2010 for $18.4 million. It plans to close at least 196 additional stores in bankruptcy and perhaps 75 more.

Did Borders fall prey to Nope. The company even sold its internet operations to Amazon in 2001.

How about when it failed to effectively respond to Amazon’s Kindle, Barnes & Nobles’ Nook, or Apple’s IPad? Not really.

How about when Wal-Mart became the largest music retailer in the United States, followed by Apple with ITunes? Not then either.

How about its last profit in 2006, and hundreds of millions in losses since then? Negative.

How about 5 years of unsuccessful recapitalizations and years of mismanagement?

What about too many long term leases in poor locations?
It didn’t help, but no.

The Border Brothers sold the chain to Kmart in 1992. That was the beginning of the end.

Kmart acquired eight years earlier the mall centered Walden Books Chain. It couldn’t figure out how to run Walden so it doubled down by paying the Borders Brothers for their operation. Most of the management left after the merger. Borders had little more success with Waldens than Kmart.

Kmart, seemingly the most successful retailer at the time, did not know how to manage its business, much less those of anyone else. It went on an acquisition streak, bringing diversified retailers into its corporate umbrella. Payless Drugs was a thriving West Coast discount drug chain until Kmart paid $25/share for it. Kmart peddled it to Thrifty, which then joined Rite Aide. Payless died, as did Builders Square and Pace Membership Clubs.

Kmart sprung off Borders-Walden in 1995. Stores expanded, sales grew, profits rose, but the numbers hid the corporate drag of Waldens.

Only OfficeMax and Sports Emporium survived the Kmart embrace, which ironically filed to invest in a computerized inventory control system.

Borders has sadly been sinking for decades with no happy ending in sight.

The Pope Speaks Up for the Roma

A fire roared through a Roma shack in an illegal camp outside Rome two weeks ago, killing four children. The tragedy received but 4 column inches of coverage in the Los Angeles Times, but that's a a paragraph more than in most newspapers.

The current apartheid by France and Italy against Roma in recent years has gone relatively unreported in the American media.

Pope Benedict XVI in his appearance on Sunday, February 13 in St. Peters Square used the Sermon on the Mount as the opportunity for speaking in support of the Roma:
“Thus each precept becomes true as a requirement of law, and they all come
together in one single commandment: love God with all your heart and love
your neighbor as yourself. ‘Love is the fulfilling of the law, St. Paul writes.”

His Excellence then powerfully stated: “Faced with this requirement, the pitiful case of the four Roma children, who died last week on the outskirts of this city when their shack burned down, forces us to face the question whether a more united and fraternal society, more coherent in charity, in other words, more Christian, would not have been able to avoid this tragic event. And this holds true for many other painful episodes, more or less well-known, which happen every day in our cities and countries.”

The Pope had previously criticized France on its deportations of the Roma.

The record of Pope Pius XII in the Holocaust is highly controversial. The basic question is did He do all he could to save, much less even speak out for, the Jewish victims of the Holocaust, not to mention the Catholics and Roma similarly persecuted by the Nazis.

Pope Benedict XVI is not similarly reticent with the apartheid and genocide unfolding against the Roma in two European countries today.

Sunday, February 20, 2011

The Wisconsin Idea in Reverse

President Charles Van Hise of the University of Wisconsin proposed the Wisconsin Idea in 1904. The public university (Wisconsin) existed for the benefit of the people of the state. The University, working with the legislature, would advance reform legislation – progressive legislation in what became known as the Progressive Era.

The great Governor and United States Senator, Robert M. LaFollette, Sr., advanced the progressive causes of labor and women’s rights. The states became the laboratories of democracy. A significant share of FDR’s New Deal built upon the lessons learnt in Wisconsin.

The American Federation of State, County, and Local Employees (AFSCME) was chartered by the AFL-CIO in 1936 in Madison, Wisconsin. The State in 1959 was the first to grant collective bargaining rights to public sector unions. The first Earth Day, April 22, 1970, was centered on the Madison campus.

The history of progressivism continued. Wisconsin was a deep blue state.

But then came the election of November 2010. Wisconsin, like much of the upper Midwest, turned a bright red as Republicans swept the governorship and legislature. A conservative Republican defeated an 18 incumbent, Russ Feingold, for the Senate seat.

Elections have consequences. Just as President Obama’s 2008 progressive tide allowed the Democrats at the national level to roll over a defanged national GOP, the new Republican majority in Wisconsin have their cause to advance as Obama’s tide swept out.

Governor Scott Walker made no secret of his goals. He was going to essentially break the public employee unions. He didn’t use those words, but that was the message.

These unions face a conundrum nationally. How much, if any, do they give back, especially in pensions and health benefits as these costs drain state and local treasuries? The public through is not infinitely deep. A shrinking private sector cannot sustain a swelling public sector. The public, especially taxpayers, understands this reality.

Illinois may be resorting to tax increases to fill the budget gap, but California and Massachusetts proved that doesn’t work. Connecticut’s new governor is looking to raise taxes, but Connecticut never fully recovered from Governor Lowell Weicker’s imposition of an income tax.

Governor Walker asked the public employees to contribute 12.6% of their health premiums (up from 6%) and 6% towards their pensions, up from zero.

The Wisconsin unions are willing to agree to these terms to help reduce a pending $3.6 billion state budget deficit.

However, they are drawing the line at the remainder of the package, which in one swoop will repeal much of their rights in Wisconsin, and serve as an incentive for similar legislation in other states.

The Governor’s proposals exempt police and fire unions, but include all the other public workers.

Collective bargaining goes to the heart of union rights. If they can’t bargain over these rights, then they cannot legally strike over them.

First, the collective bargaining rights of the unions will no longer include health or pension benefits.

Second, while they can continue to collectively bargain on wages, any wage increases above that of the consumer price index would have to be approved by public referendum.

Third, the unions will have to stand for annual certification elections.

Fourth, the unions will now have to collect their members’ dues directly from the members. No longer will the state or local governments collect the dues through payroll deductions.

At least Governor Walker did not propose a right to work state.

The unions cannot stop the proposals from enactment, short of the 14 Democratic state Senators fleeing to Illinois, depriving the Senate of a quorum.

The Republicans are not in a mood to compromise for they must strike while the iron is hot.

Democracy is a two-way street. Sometimes you make major gains, and sometimes you lose big time.

So much for the legislators’ belief in representative Democracy!

If the unions lose in Wisconsin, the birthplace of much of their rights, they will ultimately lose in almost every state. And with their loss comes the loss of power for the national labor movement and the Democratic Party.

Private sector unions have shrank to 6.9 % of the private workforce, and are now outnumbered by the growing ranks of public sector employees with a 36.2% unionization rate with 7.6 million public sector union members. The traditional industrial, trade and crafts unions are disappearing, partially with the export of jobs.

Teachers have called sick-ins to demonstrate, sometimes bringing their students with them. So much for their plea “It’s for the children.” Most teachers continue to teach outside Madison.

Demonstrations reached between 55-70,000 people Saturday, including children, college students, scallywags and carpetbaggers. That’s not a lot historically for Madison, and certainly not for a state of 5.7 million.

Some teachers are allegedly using phony doctors’ excuses. So much for civics and the rule of law! President Reagan would have fired these teachers.

Demonstrators are bussed in from neighboring states. Solidarity forever!

President Obama is supporting the unions for they own him. 2008 may have been the Progressives Last Hurrah for an extended period.

The demonstrations have been peaceful to date, but the Governor has been called a bully, scrooge, Mubarak, and Hitler. So much for the new civility in politics!

Sooner or later the state Senators will return home. The die is cast in Madison.

(By way of disclosure, my wife is a classified employee with the Tustin Unified School District, and served until recently as treasurer of the local chapter of the California School Employees Association, the state union for classified employees.)

Monday, February 14, 2011

Happy Valentine’s Day

What to give? What to Give?

If you’re reading this blog late on Valentine’s Day, it’s too late.

Give your loved one something special, unique, personal, from the heart, or perhaps the kidney, to show you really understand and love him or her. If you can’t give a piece of your heart, then what about a kidney? Ron Spanier and Amy Anderson are engaged. She is donating a kidney to him. That is true love – much more than a paper valentine.

Valentine’s Day is a special day in which it’s not better to give than receive. This should be a day of equal giving and receiving.

Chocolates are nice, but they’re addictive and fattening, whether they’re from Godiva or Whitman Sampler. A red heart shaped box full of chocolates may be a big seller for CVS, but it lacks that special touch.

Overpriced roses are trite red.

How about dinner at an expense account restaurant with ambiance, a view, fire place, and fine wine?

If so, either kneel down on your knees, pull out the ring, and pop the question, or recognize that if you need this venue for romance, it’s either going nowhere or already dead.

Be wary of getting too involved with Cupid. He’s underaged and borders on kiddie porn. I prefer Eros myself.

Go back to the days of yesteryear, when the romance was blooming. A singing telegram would be nice.

Do not send Valentines from Ashley Madison or Craig’s List. A replay of the St. Valentine Day’s Massacre is too bloody to behold. If you personally croon, don't post it on YouTube unless you have a great book.

Try a corny personal poem, perhaps plagiarized from John Donne (only Ph. D’s will recognize it). Just don’t post it online.

Jewelry is always appreciated, but be wary of the priceless jewelry from Danbury Mint. It is truly priceless – as you learn when you try to resell it on EBay when the romance fades.

If you are a lothario, be careful to remember her name. A Hallmark Keepsake valentine doesn’t remember names.

Indulge your true love. What’s their thing – gardening, NASCAR, mud wrestling? Join them. It’s but a small sacrifice on your part, but a meaningful commitment.

Here are the two gifts that mean the most:

The most personal gift of love is free – just listen.

Give a meaningful gift – a weekend without the little ones.

Still perplexed? More to Iran or Malaysia; they have banned Valentine’s Day.

Sunday, February 6, 2011

Has the White House Really Dropped 23.6% in Value?

The Zillow Real Estate firm estimated the White House was valued at $167,861,500 when President George W. Bush entered office in 2001, and peaked with the housing boom three years ago at $331.5 million.

Zillow estimates, using calculations known only to itself, that the value of the White House dropped 7.2%, $23 million, by the end of President Bush’s term, and 23.6% in the middle of President Obama’s term. In short, President Obama drove down the value of the White House from $308,058,000 to $253.1 million.

The White House has 55,000 square feet in six stories, bigger than your normal KMart, 16 bedrooms, 132 rooms, 35 baths, and 28 carbon dioxide emitting fireplaces. It is handicap accessible to accommodate President Roosevelt’s wheel chair. It has a swimming pool, doctor’s office, barber shop, tennis court, basketball court, bowling alley, a horseshoe pit favored by President George H. W. Bush, putting green, jogging track, movie theater, the latest in telecommunications, cable and satellite hookups, the red line to Moscov,HD and closed circuit TV's throughout the complex – all the amenities of a Beverly Hills Mansion or nuclear aircraft carrier, and perhaps a surface to air missile camouflaged by the vegetable garden planted on the roof by Jackie’s Executive Chef, Rene Verdon. It contains guard shacks, servant quarters, an office building, and on-again, off-again solar panels.

The White House has a 1950’s bomb shelter, presumably with a copy of the classic “Kiss Your Ass Goodbye“ poster.

The 18 acres are prime open space, suitable for 13 story condos, coops, and office buildings for the burgeoning bureaucracy. A public park across the street, Lafayette Park, and federal office buildings on three sides preclude further construction in the area. The site is unique.

No comps can be used to value the residence.

Only the Biltmore Estate in North Carolina and William Randolph Hearst’s San Simeon in California can come close to matching it. San Simeon is now owned by the state of California, which lacks funds to maintain its properties.

Conversely, the White House is probably the only building owned by the National Park Service that is not suffering from deferred maintenance.

The White House is often confused with the People's House, but that is the House of Representatives a few blocks away.

How can any public housing be worth hundreds of millions of dollars?

How can the White House be valued at only $253.1 million when President Obama intends to raise $1 billion for a new 4 year lease on the White House?

The history, the tradition – the only colonial house where George Washington never slept.

The historic status of the White House is incalculable.

How, for example, do you place a value on America’s first African American President occupying a house partially build by slaves?

How do you value the White House swimming pool where President Kennedy exercised his libido at night with naked young women while Jackie turned a blind eye?

How do you value the Monica foyer in the Oval Office?

What is the rental value of the Lincoln Bedroom to President Clinton for campaign contributions?

Priceless is President Nixon’s farewell helicopter ride.

The deals, promises pacts, betrayals sealed within the walls of the White House.

And yet it can’t be that valuable! It’s a do-over. The British burned and gutted it
in 1814 – so much for our “special relationship” with the Brits.

Friday, February 4, 2011

The Coming Energy Shortage is Now

Governor Susanna Martinez of New Mexico declared an energy emergency Thursday because New Mexico residents could not receive adequate electricity and natural gas during the cold snap. Texas is short of electricity during this cold wave.

California ran out of electricity nine years ago. Populations rise, demand grows, and no new generating facilities come on line. Throw in an economically bankrupt, political “deregulation bill,” and energy traders, and the electricity stopped flowing.

Gas at the pump hit $5 per gallon in 2008, prior to the Housing Collapse. The trucking industry, especially the independent haulers, was crippled. Detroit was headed to bankruptcy.

Cries of “Drill, Baby Drill” were blocked by the Green Lobby and the election of President Obama. He was quoted three years ago as saying his only problem with the high price of gas was that it went up too quickly.

The President has long been opposed to the oil industry, and even today is trying to cut off subsidies to the industry. His mantra is green. He used the BP Blowout to shut new development in the petroleum rich Gulf. ANWAR remains closed to oil exploration, and just yesterday Shell announced because of regulatory delays it was abandoning plans to drill for oil in the Arctic waters this summer.

The opponents of ANWAR always say it will take 10 years to bring the oil to production. Had we started drilling during the Clinton Administration, we would now have benefited from over a half decade of production.

And yet, gas prices are rapidly increasing to the levels of three years ago.

Crude oil was less than $30 a barrel barely two years ago. It passed $101 a barrel on Monday. It had risen $30 since summer, prior to recent events, because of the world’s recovering economy. Any distress in the Mideast, in production or transportation through the Suez Canal or the Gulf of Hormuz, and $5 gas and $2 heating oil will seem a bargain.

The reality is one of basic economics. If demand exceeds supply, prices will rise and rationing set in, driven by market and political forces.

The United States is the OPEC of coal, but environmentalists oppose it at every turn. Thus, few new coal plants are built in the United States. President Obama also made it clear he opposes coal. Several large coal plants have shut down.

Natural gas is odorless and clean burning, but New York is fighting development of large gas reserves in the state. Former Governor Richardson of New Mexico issued an executive order blocking gas development in the state.

Hydro is clean and renewable, but we are slowly tearing down our dams rather than building new ones.

Nuclear is clean, but it is going nowhere and NIMBY forces will fight any new proposals.

Wind and solar have limits. Solar does not heat homes in the dead of a Frostbelt winter.

Green energy will require new transmission facilities, but these too are blocked.

The United States possesses large reserves of oil, but development is increasingly blocked both onshore and offshore. The oil is there, but the will is not. Indeed, Cuba will be drilling for oil off of Florida, but we can’t.

Californians love SUV’s, but don’t want production off the coast. We pay the highest gas prices in the Continental United States, serving as a hidden tax on an already overtaxed state.

Green does not propel cars. Electric cars will need power plants generating electricity. Green will not end on dependency on Mideast oil.

Conservation only goes so far.

Our economy was built on cheap energy. Those days are gone, ending forever with the Arab Oil Embargoes of the 1970’s.

As prices go up, inflation and unemployment will rise. Heating oil prices will sap households’ discretionary spending. And every dollar we spend on imported oil will go to Russia, Saudi Arabia, Hugo Chavez, and Al Qaeda.

President Obama may become the reincarnation of President Carter.