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"The road is cleared," said Galt. "We are going back to the world." He raised his hand and over the desolate earth he traced in space the sign of the dollar.
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Saturday, April 26, 2008
MAYBE LARRY IS RIGHT!
Larry Kudlow has been saying for some time now that the dollar should become an issue in the presidential campaign. Maybe he's right. Here's a picture snapped on Broadway yesterday outside the NASDAQ building by Mike Darda.
And here's one making the rounds on email, sent to me by Jameson Campaigne.
KUDLOW REPLAY
Here's the YouTube video of Thursday's appearance, in two parts. The great thing about Larry's show -- which is the best hour on financial television -- is that he has guests who are actual market practitioners: investment managers, hedge fund managers, economists, and the like. Because they put their own money at stake in markets every day, they have to know what they are talking about. They might be right, they might be wrong -- but they take strong views, and can support them with facts. Sadly, there is another class of guests, as well: the journalists. These people are mere scribes, observers, bystanders, gawkers and wannabes. They don't have to take real positions. They don't have to know the facts. They just have to assume a jocular, extroverted, infomercial-style persona, and the viewing public is expected to assume they are experts. But they are not.
In part one is Bob Gage of Forbes. On Thursday the Shanghai stock market was up 9%, coincident with the news that the government would be setting the stamp tax on stock transactions -- basically a small commission paid to the government on each trade -- back to 0.1% from 0.3%, where it have been temporarily set last year to discourage speculative trading. Gage was quick to pander to Larry's (and my) love of tax cuts as economic stimulus, by declaring, all falsely, that the tax was "gone altogether," that this removed a "barrier to domestic investment" that had limited "how much folks can invest." Wrong. All wrong. Just uninformed blathering, and I set him straight. I'm not sure he even understood he'd been corrected -- he just went on about how a stamp tax is the equivalent of a capital gains tax, which it is absolutely not (since it is assessed ad valorem on each trade, irrespective of whether the trade represents a gain or loss).
Note in part one that I had to correct non-journlist, too. Economist Joe Lavorgna seemed to think that LIBOR (the interbank interest rate that determines many mortgage payment rates), is higher today than it was last summer. In fact, it is at 2.88%, and last summer it was as high as 5.8%. Later on I'll post part two, in which Herb Greenberg illustrates my point about journalists all too well.
POLLING THE "BITTER" PEOPLE ABOUT CAPGAINS
Our DC-insider friend "Mick Danger" forwards some research from the RNC:
A recent Rasmussen national telephone survey found that 65% of Likely Voters oppose an increase in the Capital Gains tax and 52% believe hiking the capital gains tax would hurt the economy. Among those voters who own at least $5,000 worth of stocks, bonds, or mutual funds and would be directly impacted by an increase in the capital gains tax, 71% are opposed to a capital gains tax increase.
Most voters (60%) believe that if a candidate promises to increase the capital gains tax, that candidate would increase other taxes as well. In addition, if the capital gains tax was increased, 48% say their own taxes would go up.
Mr. Obama is befuddled and angry about the national reaction to what are clearly accepted, even commonplace truths in San Francisco and Hyde Park. How could anyone take offense at the observation that people in small-town and rural American are "bitter" and therefore "cling" to their guns and their faith, as well as their xenophobia? Why would anyone raise questions about a public figure who, for only 20 years, attended a church and developed a close personal relationship with its preacher who says AIDS was created by our government as a genocidal tool to be used against people of color, who declared America's chickens came home to roost on 9/11, and wants God to damn America? Mr. Obama has a weakness among blue-collar working class voters for a reason.
His inspiring rhetoric is a potent tool for energizing college students and previously uninvolved African-American voters. But his appeals are based on two aspirational pledges he is increasingly less credible in making.
Mr. Obama's call for postpartisanship looks unconvincing, when he is unable to point to a single important instance in his Senate career when he demonstrated bipartisanship. And his repeated calls to remember Dr. Martin Luther King's "fierce urgency of now" in tackling big issues falls flat as voters discover that he has not provided leadership on any major legislative battle.
Mr. Obama has not been a leader on big causes in Congress. He has been manifestly unwilling to expend his political capital on urgent issues. He has been only an observer, watching the action from a distance, thinking wry and sardonic and cynical thoughts to himself about his colleagues, mildly amused at their too-ing and fro-ing. He has held his energy and talent in reserve for the more important task of advancing his own political career, which means running for president.
But something happened along the way. Voters saw in the Philadelphia debate the responses of a vitamin-deficient Stevenson act-a-like. And in the closing days of the Pennsylvania primary, they saw him alternate between whining about his treatment by Mrs. Clinton and the press, and attacking Sen. John McCain by exaggerating and twisting his words. No one likes a whiner, and his old-style attacks undermine his appeals for postpartisanship.
Mr. Obama is near victory in the Democratic contest, but it is time for him to reset, freshen his message and say something new. His conduct in the last several weeks raises questions about whether, for all his talents, he is ready to be president.
"His inspiring rhetoric is a potent tool for energizing college students..."
Political pundits & newscasters alike call Obama an inspiring speaker -- as opposed to an articulate one, for the latter allegedly smacks of racism. Huh? Since when is calling an African-American "articulate" racist? Does this somehow imply that to praise him would be confused with thinking that he otherwise is stupid?
As for me, I think it best not to listen to the experts. Am I a racist to say that Obama is not articulate? Listen to any of his debates -- I've lost count how many times he said the words "uh" and "uhm!"
KUDLOW REPLAY
Here's the YouTube replay of yesterday's appearance. Boy, it's tough to get a word in edgewise with Jared Bernstein sucking up the oxygen. Now he's not only paid by his union-boss masters to talk it up, but by CNBC as well (he's now designated a "CNBC contributor," an oxymoron meaning that the network pays him for his "contributions"). With two paychecks coming in, must he think he's being paid by the word? Think of how much the unions and CNBC could save if they paid him by the concept, instead.
JUNK JOURNALISM, NEAR-JUNK RATING
The New York Times Magazine this coming Sunday will feature a story titled "Triple-A Failure," detailing "How Moody’s and other credit-rating agencies licensed the abuses that created the housing bubble — and bust." Coincidence or conspiracy, when it emerges today that Moody's has downgraded the debt of the New York Times Company to the lowest possible rating still above "junk," because of "declining advertising sales" and "Moody's view that cash will be used to fund capital spending and the $132 million annual dividend..."
SOME PEOPLE WILL SAY ANYTHING TO GET PUBLISHED IN THE MAINSTREAM MEDIA
And you've got to say some really crazy stuff to get into the Los Angeles Times. Here's Shawn Mercer:
I know you two have gone round-and-round on other subjects, but how can any honest supply-sider who wanted permanent tax cuts in 2003 instead of temporary cuts say this?
Republicans respond that they had no choice; they didn't have the votes to enact permanent tax cuts, so it was temporary cuts or nothing. This is not true. They could have made them permanent, but that would have required bipartisanship and more political capital than Republicans were willing to spend. So they took the easy way out, figuring that Democrats wouldn't dare oppose extending the tax cuts when the time came, lest they be accused of favoring a vast tax increase.
Ah, yes, that salve of prissy good government types everywhere: "bipartisanship." He even concedes there were, "good elements to the tax cuts, such as the reduction in marginal tax rates." You're telling me Bartlett honestly thinks any of that would've survived a "bipartisan" deal, which by definition had to win the votes of tax-loving Republican squishes like Voinovich and Snowe, let alone Democrat votes? And if having Dick Cheney break a tie vote over a cacophony of protest and soft poll support isn't "spending political capital," what on earth is?
The U.S. economy has, for many weeks, had Americans (and their politicians) talking recession: The economy grew only marginally, 0.6 percent, in the fourth quarter of 2007—and may have dipped into negative territory in the first quarter of 2008.
Or the chatter might be a false alarm. We were struck over the weekend by a punchy post from economic forecaster Donald Luskin on SmartMoney.com: "Economic Recovery Already Underway." His thesis: "What a difference a month makes! . . . Compared to the bleak expectations then, even just hanging in there would have been an upside surprise. But it's more than that. Things actually are getting better."
The wealth of up-tilting data Luskin cites won't silence the gloomiest Jeremiahs. But it plays havoc with their recent fun: predicting a second Great Depression.
MURDOCH TAKES ON THE TIMESNewsweek thinksMurdoch's Wall Street Journal is now in an old-fashioned newspaper war with the New York Times:
In his daily contest against The New York Times, Murdoch appears poised to use his playbook from the 12-year showdown between his upstart Fox News and the entrenched CNN, formerly owned by Ted Turner. Murdoch marketed "fair and balanced" Fox as an alternative to what he deemed CNN's liberal bias. And certainly The Wall Street Journal's conservative leanings are a foil to the Times's liberal voice. But the Journal-vs.-Times war seems unlikely to get as personal as Murdoch vs. Turner (he neglected to take his lithium, Murdoch once said of the manic-depressive Turner; he's like Hitler, Turner said of Murdoch). Murdoch says he and New York Times Co. chairman Arthur Sulzberger Jr. aren't friends, but there's no hostility between them, either. Sulzberger declined to comment for this article.
Things may not be hostile, but they are certainly feisty. For years, Murdoch has targeted Sulzberger for tabloid harassment. The Post regularly runs a "Sulzberger meter" alongside stories about negative developments at the rival publishing company, featuring a head shot of Sulzberger sporting a black eye. The Journal joined the fray last December, after Murdoch had clinched the Dow Jones deal, accusing his critics of "commercial" and "ideological" motives and blasting the Times for giving credence to concerns that Murdoch would turn the Journal into a mouthpiece for his own business and right-wing political interests. The Times, like numerous other media outlets, has been critical of Murdoch for allegedly using his media properties to pursue personal business and political ends—a contention that Murdoch vehemently rejects. "I've never, ever done that," he says angrily. "I challenge anyone to show that I did. My bloody papers won't even review Fox films favorably."
The Murdoch camp is particularly miffed about two back-to-back front-page investigative stories in the Times that endeavored to detail the history of Murdoch's conflicts of interest. Murdoch also contends that Sulzberger misled him about the tone and content of an upcoming Times editorial about him when the two men encountered each other at a party aboard Internet mogul Barry Diller's yacht to celebrate Murdoch's Dow Jones victory. The way Murdoch tells it, Sulzberger assured him that he needn't worry about the editorial, which would be running in the next day's paper. But when he opened the Times, Murdoch cringed. The editorial reprised an oft-repeated anecdote about the mogul's once booting the BBC from a Murdoch-owned satellite television service, Star TV. The accusation was that Murdoch had pulled the BBC's news service as a reprisal for stories it carried critical of the Chinese government; at the time, he was trying to curry favor with the Chinese to ease his entry into the exploding Asian market. In an interview, as he has previously, Murdoch contended the network was pulled for financial reasons, not for its China coverage. Murdoch fired off a letter to Sulzberger, the content of which still rankles the Times scion: "Dear Arthur, It was a pleasure to see you last night ... I don't know how many times I have to state that I didn't take off the BBC ... Let the battle begin!"
“I have a really interesting political point of view, and it’s not always something I say too loud at dinner tables here, but you can’t go from a $2,000-a-night suite at La Mirage to a penitentiary and really understand it and come out a liberal. You can’t. I wouldn’t wish that experience on anyone else, but it was very, very, very educational for me and has informed my proclivities and politics every since.”
(Suffice it to say he is not one of the Hollywood types who weeps over innocents trapped behind bars.)
Turns out that there is more at stake than just a matter of good taste, or even having minimal respect for public figures. Turns out that those heads of Bush and Cheney portrayed on the UK cover are artworks, and that the artists were neither credited nor compensated by Krugman or his publisher. Would things have been different if the artists were represented by a union favored by the Democratic party?
StreetRec [the artists' group who created the heads] was surprised to find out about the book cover especially since it was so clearly a marketing move. The images on the cover of the book had not been re-done at all and were being used for profit however critical the book may have been. One member of StreetRec contacted the publishing company to discuss a possible honorarium or credit and asked for at least a few copies of the book for their files. If this book had been a not-for-profit venture, than it would have been another of the exciting re-printings of StreetRec’s work.
StreetRec weren’t the only people concerned with Krugman’s cover. Regardless of the books’ exclusion from the US market, right-wing journalist Donald Luskin at the National Review choose to highlight the cover images in his column as a way to discredit Krugman’s ideas. In a November 24, 2003 piece called “Running From Cover” at www.nationalreview.com, Luskin writes, “It took a simple picture for the New York Times to finally distance itself from America’s most dangerous liberal pundit…It’s a photomontage showing the face of President George W Bush with huge Frankenstein sutures across his mouth and brow, and the word ‘Enron’ stitched into his forehead. Vice President Dick Cheney’s face sports a Hitleresque mustache; the words “Got Oil?” are scrawled on his forehead. It is a hateful, shocking, and disturbing image.”
Even the Republican National Committee weighed in on this cover. Spokesperson Christine Iverson stated in the New York Times (“One Book, Two Very Different Covers,” Nov 23, 2003, Books p 2) that, “The fact that they are using a much different cover here in the United States is proof that his tactics are offensive to mainstream Americans.” The New York Times also attempted to distance themselves from it, spokeswoman Catherine J. Mathis stated, “ . . .we were never even shown the cover.” And finally Krugman himself, in the same Times story said, “It is a marketing thing, not a statement…I should have taken a look at that and said ‘What are you doing marketing me as if I’m Michael Moore?’”
Certainly if Krugman only was to benefit from the images as a marketing device, perhaps the company could have done some research about who to attribute the art to. But, protest art and underground culture is constantly appropriated wholesale by the market. If he planned to reprint the original photos by Annie Leibowitz, certainly he would have paid for rights, but grassroots art functioning in public space is easy for corporations to use without fear of repercussion. Regardless, the images had reached higher places of power and controversy than any of the artists could have imagined.
WHO IS OBAMA?
Jesus Christ, Mahatma Ghandi, Martin Luther King, Abraham Lincoln, John F. Kennedy and Robert F. Kennedy all rolled into one? Our old friend James Crystal thinks otherwise. Try George McGovern. And then... try Jim Jones.
The real impetus for the bill...was to help the SEIU organize employees of ManorCare, a nursing home chain owned by the Carlyle Group private equity firm. Kohlberg Kravis Roberts, another private equity outfit and owner of the Hospital Corporation of America, has also been a major target of Mr. Stern's campaign.
The SEIU wanted to ratchet up the pressure on Carlyle and others by cutting off two gigantic sources of private equity capital: the California Public Employees' Retirement System (Calpers) and the California State Teachers' Retirement System (Calstrs), which manage $240 billion and $167 billion of assets, respectively.
...a list of human rights violators that included Singapore and Abu Dhabi but not China raised eyebrows. It turned out that [SEIU head] Mr. Stern included Singapore and Abu Dhabi because they invest with Carlyle. China got a pass because its sovereign wealth fund invests with the Blackstone Group private equity firm, and the SEIU has negotiated janitorial agreements with Blackstone real-estate companies.
In other words, human rights were at best an afterthought for Mr. Stern, whose real goal was expanding his own political clout. Mr. Stern's campaign against private equity is typically expressed in moral terms on behalf of "working families," but in Mr. Stern's moral universe all is forgiven if you play ball with his union. And once this became clear he began losing political support.