What Does This Tell You?

About $7 trillion disappeared in the collapse of the economy in 2008, with 28 of the 30 Dow industrials falling by more than 11 percent. So which two didn't sink so low? Wal-Mart and McDonalds. The value of poor people's commodities remained strong. Or is that just my take on things? (See The New York Times' story.)

For another view of things, take a look at what's happening to the Chinese economy, where ships are leaving ports half full. (See The New York Times' story.)

How Things Work:

We've all heard about the world economy, but few of us have much of a notion about how it works. Carter Dougherty sheds some light on the interconnectedness of the whole thing, focusing on the relationship between American consumers, Chinese manufacturers, and German suppliers, in today's New York Times. Here's the story in a nutshell: Americans buy stuff from the Chinese, who need German equipment to make the stuff. I like my version better, but let's face it—Dougherty is more convincing: he names names.

Profiting from the Bank Bailouts:

Some people expect to get rich (read richer) off the backs of the taxpayers:

Some … former federal officials, like L. William Seidman, the first chairman of the R.T.C., are serving as advisers — sharing ideas with Treasury Secretary Henry M. Paulson Jr. and the transition team for President-elect Barack Obama — even while they are separately directing investors or banks on how to best profit from this advice. (Eric Lipton and David D. Kirkpatrick, The New York Times)

You had to know that Sec. Paulson's rush to dump hundreds of billions of taxpayer dollars into bailouts for the very rich at the end of the Bush period was about something more than improving a failing economy that the same administration had done so much to destroy in the first place.

What is obvious to former R.T.C. officials is that, like the last go around, a great deal of money will be made by a select group of investors and business operators, particularly those with government contacts. The former government officials said in interviews that much of what is motivating them is a desire to help the nation recover from this latest stumble. But they acknowledge they intend to be among the winners who emerge.

“Fortunes will be made here, no doubt about it,” said Gary J. Silversmith, one of more than a dozen former R.T.C. officials interviewed who now are involved in enterprises seeking to profit from bank bailouts. (Eric Lipton and David D. Kirkpatrick, The New York Times)

Finally Someone Is Examining the Costs of Information Tech.:

Randall Stross reports on the pricing of sending texts messages from cell phones. The prices have doubled in the past few years while the amount of texting has skyrocketed. But no one seems to know what the actual cost to the providers is. The best estimate is a penny or less.

Let's face it. Providers of digital information of all sorts have been hiding their costs while pumping up prices all along, and with only four (4) providers in the U. S., you know they've been talking with each other. With a group that small, they don't even need to collude openly. They already know what each other are doing.

Now will someone please look at the cable companies and tie a knot in their monopolistic tales?

Just Say No:

Come on, young'ns, promise to remain virgins until you marry! (Translation: Promise not to practice birth control, 'cause you're gonna have sex anyway.) Studies show that promising not to be sexually active until after marriage has proven to be a collasal failure, not only because kids are having sex anyway, but also because the kids who make those promises are less likely to practice any form of birth control:

"Taking a pledge doesn't seem to make any difference at all in any sexual behavior," said Janet E. Rosenbaum of the Johns Hopkins Bloomberg School of Public Health, whose report appears in the January issue of the journal Pediatrics. "But it does seem to make a difference in condom use and other forms of birth control that is quite striking." (Rob Stein, The Washington Post)

Finally, Real Progress in Education:

Today's New York Times reports on some real progress in education. Karen Cullotta quotes one parent as stating, "'My daughter is learning that the teacher is not responsible for her learning. [She] knows that she is responsible for her own success'."

The story is about a movement in the Midwest to bring children into the parent-teacher conference, instead of leaving them at home. Sounds like the right idea, and a rarity in education where the professionals have tried to make education all about themselves for the past few decades.

The Good News and the Bad:

No one knows what's going to happen to book publishing. The signs are both good and bad. Oprah can create a best seller with her TV show, and the Internet is wreaking havoc with the book selling business. Houghton Mifflin, long considered America's leading publisher, has chosen not to accept any new manuscripts from new writers. David Streitfeld addresses the dilima in today's New York Times. To date, no one has spotted the light at the end of this tunnel.

Living without a Furnace:

Twenty-five years ago, Americans were building houses outside of Chicago (where temperatures currently hover around zero Fahrenheit) without anything more than emergency heating devices. They were homes that used passive heating and cooling to keep them comfortable. I remember watching a program on PBS that illustrated the designs that made this possible, and the homes were quite beautiful, large, and with healthy living spaces. It looked like the wave of the future, but then oil prices started dropping. And Americans began building MacMansions.

Now Germany has taken the lead in building homes with passive heating, while America struggles to figure its economic problems, including the housing market, out. Elisabeth Rosenthal reports in today's New York Times on the building that's occurring in Darmstadt, Germany, where innovation that spans beyond the next quarterly report seems to be valued more highly than in the if-it-itches-scratch-it-now business cycle of the U. S.

In the Meantime:

Back in the U. S., people are starting to heat their homes with coal again, especially in areas where coal is mined. The amount of coal used to heat homes is still trivial and seems to pose no environmental hazard at the moment, but one has to wonder at the choices being made. See the report in The New York Times, and compare the photos of the couple in Sugarloaf, PA, with the photos of the folks in Germany. All things being equal, in which home would you rather live?

Full Disclosure: I've never lived in either of these towns, but I have been to them, and both of my grandfathers were coal miners. They each died as a result of their mining experiences.

More Signs of the Times:

While media is cutting back on reporting of real news, closing overseas offices, failing to report on corruption until after the fact, losing circulation and viewers, it seems to never have a lack of funds and space (whether print or on screen) for all things celebrity. Witness the feeding frenzy over all things Obama. The president elect is vacationing in Hawaii with his family, and already he's being scrutinized for every move he and his family makes, as the press core shadows every move, nuanced and otherwise, as reported by Jackie Calmes in today's New York Times. Pay particular attention to the coverage of whether Obama's clothing got wet or not when he took his two daughters to a water park.

Good News for Rich Folks!

At least for the fearful ones. The Federal Deposit Insurance Coverage on your bank accounts is being raised from $100 thousand per account to $250 thousand. That means if Jesse James robs your local branch bank, you'll be covered for an additional 150 grand per account. It also covers stupid acts by stupid bank managers, a more likely scenario.

The bad news for rich folks is that 1) the interest rates you're currently receiving will remain low and 2) the program is scheduled to last only one year.

For people who have trouble with math, keep in mind that you will only receive the exact amount that you have in the account up to the maximum, so don't start anticipating that you'll receive that maximum should your bank fail. It ain't the lottery.

For my mother, each of your separate accounts are covered. The insurance isn't cumulative. And you don't have enough money for the increase to make any difference anyway.

For my critics, yes, I consider anyone with more than $100 thousand as being rich. In fact, from my perspective the cutoff is much lower than that. Much lower.

NOTE: Some IRAs and certain other retirement accounts will not return to the lower amount on January 1, 2010, but will remain at the higher level. Check with your bank to see if you're covered. Don't ask me.

I Know! Let's Blame China!

Today's New York Times contains a history lesson. Mark Landler explains how China caused America's financial meltdown by loaning the U. S. money that American's spent on Chinese goods over the course of the past decade (or two). In 2005, now Federal Reserve Board Chairman Ben Bernanke explained that the "problem … was not that Americans spend too much, but that foreigners save too much," according to Landler. "The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption," Landler states in explaining Bernanke's theory. Obviously the key here is that the Chinese should have been spending more of their money and loaning the U. S. less.

Bringing Democracy to Afghanistan:

The latest weapon of choice in winning Afghan's tribal leaders over to the American way includes the controlled disimination of … are you ready for this? … Viagra! Yes, while Afghans grow poppies for the American heroin market, American CIA agents are passing out the little blue pills of Viagra to tribal chiefs with multiple wives to please. You can read all about it in today's Washington Post.

Forty years ago today, American astronauts gave us this image.

Islam and the Middle-East:

Few in the west have any clear understanding of what Islam or life in the middle-east is like. Michael Slackman, writing in today's New York Times, provides a glimpse into what it's like to be a young Jordanian college student and the appeal of Islam. As I read the article, I couldn't help but keeping comparing them with young right-wing American religious fundamentalists. While not the same, we're also not exactly talking about square pegs in round holes either.

Democracy Gone Awry:

Democracy California style has managed to shoot itself in the foot big time. Today's Washington Post carries a story that illustrates how democracy can defeat the best of intentions, and what happens when state voting districts are gerrymandered so that elected officials can hold office in perpetuity. Oh, yes, and then there's the governor who is more interested in being a celebrity than in actually governing.

The Coming Debate:

Should the federal government spend our money repairing roads, bridges and other "shovel ready" projects? Or should "green collar" jobs take precedence? Look for a "battle royal" on a C-SPAN station near you in the coming months. (See The Washington Post story.)

Signs of the Times:

The market for corporate Jets is, according to The New York Times, in a "Free-Fall"; the last remaining SUV plants are closing, and Toyota's world-wide car sales are down by more than 20 percent. In other market news, Wall Street actually rose slightly, but that happens when the government's prognosis on job losses and consumer spending are met, regardless of whether the news is good or bad. Wall Street hates surprises. Which would indicate that keeping one's head out of the sand might be a good practice.

This Just In:

The New York Times reveals that, while Bush is an idiot, Cheney is actually evil. Stay tuned for further developments.

Words of Wisdom:

"As people do better, they start voting like Republicans—unless they have too much education and vote Democratic …" — Karl Rove, chief architect of the worst administration in American history.

Rush Limbaugh Salivates …

over the opportunity to go on the attack against a liberal administration. (See The New York Times' story.) For eight years, conservative talk radio, which asserted itself during the Clinton administration, has been the apologists for the Bush administration. Rush Limbaugh was even declared a king maker after the 2000 election was successfully stolen.

Following a Democratic sweep in 2008, the conservative propagandists of the air waves are poised to go on the attack once again. But will anyone be listening? Advertising revenue is down everywhere and particularly in traditional news sources like newspapers and AM radio, which has been consumed by talk and is no longer listened to by America's youth.

Define Recovery:

Paul Krugman forecasts an economic recovery by the end of next year, but just what kind of recovery will it be and will we even know it has taken place when it arrives (if it does)? Over the past two decades (roughly), the economy has been fueled by "bubbles," principally the stock market bubble of the 1990s and the housing bubble of the more recent past. Mostly these bubbles benefited the top 1 percent.

Protectionism:

Today's Washington Post reports on the growing trend in various forms of protectionism around the globe, from countries passing higher teriffs on imported goods to government funding of local businesses, like the bailout package for the American auto industry that provides an unfair advantage to Detroit over foreign auto makers.

In addition to possibly slowing any world wide economic recovery, this activity stands to harm China the most, as The Post points out, due to that country's reliance on exporting goods.

A Company To Believe In:

While many companies are finding ways to save money that depend on cutting the incomes and benefits of their regular employees, Caterpillar, the heavy equipment maker based in Peoria, Ill., is cutting compensation at the highest levels first. The company announced Monday that it would cut executive compensation by as much as 50 percent. (See The New York Times' story.) Now that's a company you can believe in. Think what the CEOs of the big three automakers might have accomplished if they'd shown up the first time in Washington with the announcement that their own remuneration would be cut by at least half.

Even Toyota Is Hurting:

Toyota reported Monday that it will suffer its first operating loss since 1938, the second year of its existence. The company, according to The New York Times, will lose $1.7 billion in 2008 after having reported a profit of $28 billion in 2007. That's some real money down the tubes.

Best Movie Review of the Year:

Wendell Jamieson recalls the first time he saw It's a Wonderful Life. America's favorite Christmas story as seen through the eyes of a fifteen-year-old isn't the story of redemption that the movie is touted for so much as a forecast of a man's struggles with the compromises made while becoming an adult.

Mr. Jamieson spends considerable time talking about the failed vision of the movie; i.e. Bedford Falls would have been better off in the long run as Pottersville because the only economic growth in the state in the long run would have been as a resort/casino -ville. However, the real vision of the film is as an alegory of America's survival of The Great Depression and World War II. The film attempts to look forward by looking backward, which is precisely the structure of the film.

Nevertheless, Mr. Jamieson nails it when he says the real power of the film comes with George's steady breakdown that leads him to the bridge, where he can only be saved through divine intervention. Or blind luck. For my money, the most powerful scenes in the movie take place in the home, when George begins to lose it with his wife and children, and his weaknesses start to dominate the film. This is some of the best dramatic irony Hollywood has ever achieved.

Bailout? For Whom?

Half of the $700 billion bailout has already disappeared down the black hole of the banks and Wall Street without anyone being able to explain where it went. Treasury Secretary Paulson asked congress to release the second half of the money this past Friday, again without any oversight.

Congress struggled with demands for all sorts of oversight on a nickel's worth of that amount of money to help out the auto industry, with tens of thousands of jobs at stake, but no one seems to be questioning where all of this far larger some of money is going for the banks and Wall Street.

In the meantime, some economists are forecasting job losses as high as 4 million. The country could be facing an unemployment rate of 10 percent by the end of Obama's first year in office.

The Obama team is preparing a $775 billion stimulus package to begin as soon as he takes office, and that money, at least, can be tracked. Shouldn't we demanding the same oversight for the massive bailout of the financial sector. After all, they are largely responsible for the current state of affairs.

A Trillion Here, A Trillion There …

Is that real money or not? Yesterday the value of the dollar dropped in comparison with the Euro and the Yen. More money is being printed in America to try to encourage the banks to loan it to home and auto buyers, but the banks are reluctant to release the cash when unemployment continues to mount.

According to Washington Post writer Lori Montgomery, the Obama team plans to stimulate the economy with $850 billion in a variety of programs. That's on top of the $700 billion the bush administration has dumped into the banks and Wall Street. You can just see the next Madoffs rubbing their palms together in the wings.

In the meantime, Minnesota still doesn't know who its next senator will be and may not be able to seat one by January 6, when the next session starts. Senators are, as you know, the representatives of property. Each state has two senators, so Wyoming (Dick Cheney's home state) has the same number of senators, the same government voice, as California. Wyoming's population is less than 600,000 while California's population is well over 36 million. That's fair and balanced, don't you think?

So, have you bought your new flat-panel TV yet? Sales are expected to fall off next year. Flat panels were about the only things that sold during Black Friday. I guess when you've bought one you don't need to rush right out and buy another one. The down side for consumers is that reduced sales will translate into a flattening of prices instead of the usual continued drop that occurs in technology hardware. In other words, if you're waiting for the prices to fall dramatically, they probably won't.

What Makes Caroline Kennedy Qualified:

"Uh, she's not Rod Blagojevich?" Maybe it's time to look outside the normal channels for leadership at the highest levels. Normally, I like to back the guy with experience, not because I trust him to do the right thing, but because I know what he's about. But the last eight years have turned the whole political spectrum on its head.

Look, you all were asking the same question about Mr. Obama, but now you're standing on the beach, ready to watch him walk on water. Go ahead, New York, you could do a lot worse than another Kennedy. You have often enough.

Fed Tries New Approach To Push Banks To Make Loans:

The Fed announced this morning that it will begin printing additional money in an attempt to urge banks to make loans in order to stimulate the economy. (See the NPR story.)

The one strategy the Fed has yet to try is outright paying the banks money in order to encourage them to make loans.

Public Opposes Fat Cat Bailouts: The Washington Post reports that their polling shows that 55 percent of Americans are against a $14 billion bailout of the big three automakers. If lawmakers want to have the public behind them, they need to make it much clearer why failure for the automakers will hit the public's pocketbook much harder than not bailing them out.

If the automakers were serious about their appeals, one would think that they would be leading the charge in, first, informing the public of what it means if their companies are forced into bankruptcy, and, second, making public a thoroughly vetting plan for reorganization that would include major cuts to the profitability of being a bad CEO.

Hey! The banks and Wall Street didn't need to do that, and they got fifty times more taxpayer money than the automakers are asking for.

In other news, the media is agog over Caroline Kennedy's interest in taking Hillary Clinton's soon to be vacated senate seat. "Is she qualified, or is it just the Kennedy name?" the pundits all want to know. (She is an American citizen, and she is over the age of thirty, and she is a resident of New York.) Being "qualified" to hold office has always been a Kennedy bugaboo. Was her father qualified to be president? Was her uncle qualified to be attorney general?

When the pundits ask the politicos about Ms. Kennedy's qualification for being a U. S. senator, the reply always comes down to speculation about her ability to run for office once Clinton's term is up. No one talks about what kind of senator she would make.

The Blagojevich Saga: Was he making plans or just talking? David Johnston of The New York Times raises the question about whether the Illinois governor is actually guilty of something or not. Was he actually soliciting bribes, or was he just talking about the possibility of doing so?

What if you and I sat down together in the local diner and, as a matter of idle speculation, began discussing robbing the branch bank down the street, not that either one of us would ever commit such a crime, and the waitress overheard us and told the cop sitting at the counter what we were talking about? Would the cop be justified in arresting us? Probably the cop would wait to try to actually catch us in the act.

So where's the smoking gun, Mr. Prosecutor? Guess we'll have to wait to find out, but I'm guessing that one of the other politicos that the prosecutor was after turned state's evidence here. Maybe even the governor's own father-in-law, in which case I'm betting Mrs. Blagojevich will escape the fire.

Now, you have to ask yourself, when will this become an HBO mini series? And if that mop of hair hanging in the governor's eyes makes you wanna gag, now you know how your parents and grandparents felt when the Beatles appeared on the Ed Sullivan Show. (Okay, that's just not right!)

The New Journalism:

In Baghdad, a journalist finally figures out the proper way to address George W. Bush. For Iraqis, the most insulting thing you can do to someone is put them under your shoe. So one twenty-eight-year-old journalist tried his best to put the American architect of the fiasco known as the Iraq War under the soles of his shoes during a press conference yesterday. Surely you've seen the pictures, they'll be on the Web for years to come. You can print the pictures from The New York Times' site in case you're inclined to make your own poster.

The $100 Billion Failure:

Need something to read today? The New York Times has made a draft copy of the "unpublished 513-page federal history" of the failed rebuilding of Iraq available. In the Times' words, the document reveals that when problems developed "the Pentagon simply put out inflated measures of progress to cover up the failures." Just a little more evidence, I guess, that Dick Cheney and company have been utterly successful in re-fighting the Vietnam War.

In the meantime, as Frank Rich points out, we're all agog over the blatant behavior of the Illinois governor who seems to have barricaded himself inside the governor's mansion.

Update: Osama bin Laden still at large. This weekend marked the fifth anniversary of the capture of Saddam Hussein in Baghdad.

When Sex Has Less Value Than Conversation:

Sounds like a house on the city limits of Las Vegas, but according to Charles Blow, writing in today's New York Times' Op-Ed pages, today's teens are more likely to "hook up" than to date.

In today's parlance, to "hook up" means to momentarily go bump in the night. Interestingly, when I was a young man the term meant "to leave." It was introduced in the military, co opted from airborne units who "hooked up" before jumping out of a perfectly good airplane.

The evolution of the term is interesting and suggests something about the current concept. Today's teens don't "make love" or even "have sex," they simply "encounter" one another from time to time, reducing the matter to a simple bodily function, as it were.

In other news, there are now more female college students in America than male ones; and China is currently America's absentee landlord. I'm not sure any relationship exists between these facts, but the times are full of change, to coin a phrase.

On the sixty-fifth anniversary of Pearl Harbor, the Dude had this to say: "Make no mistake about it, I understand how tough it is, sir. I talk to families who die." — George W. Bush, Washington, D.C., Dec. 7, 2006. (Now that just proves he would be fun to have a beer with, provided you weren't one of the dead people he talks to.)

Yes, America, Friday the 13th did fall on Saturday this month. (Thank you, Pogo.)

World's Biggest Ponzi scheme collapses:

In the shadow of the Blagojevich scandal comes the news that Bernard Madoff has confessed to having stolen as much as $50 billion with a fake hedge fund, which he admitted to his sons was nothing more than a Ponzi scheme (an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones [after Charles Ponzi (1882?-1949), Italian-born speculator who organized such a scheme (1919-1920)]).

The question now is how many more hedge funds are nothing more than Ponzi schemes. (See The Washington Post story.)

Another Illinois Governor Going to Jail:

Several years ago, when Illinois Gov. Rod Blagojevich was running for office, Republican friends —yes, I have some of those, but I try to keep them at arm's length—warned me that he was an even bigger crook than the current Republican governor was.

Because I'm not an Illinois resident, there wasn't much for me to do or say about it at the time. Frankly, I suspected their objections were merely sour grapes, but Blagojevich has proven them more than correct. National Public Radio has been reporting all morning long about the governor's arrest for, among other things, attempting to sell President Elect Obama's senatorial seat. Hubris, thy name now has an even more difficult spelling.

To Bail or Not To Bail:

That no longer seems to be the question. Instead, we seem to be—pondering is deffinately not the right word here—in a full fledged, wild eyed argument about how much to provide and under what conditions.

David Sanger ignited a firestorm of bloggers in today's New York Times by arguing that the country is about to go "soviet" under Obama. If bailing out the banks provoked disdain, then financing Detroit has ignited a civil war of words and ideology.

For the moment, it appears that the passengers on this Titanic have chosen to debate while the ship is sinking. As I recall, that earlier ship had too few life boats for too many passengers.

On the other hand—I know what you're thinking—haste doth inevitably make waste. Damn those rocks! And just when we've found ourselves in a hard place. (See The Washington Post's coverage of the $15 Billion loan.)

533,000 Jobs Disappear in November:

Not since December 1974, when Gerald Ford was placed into the White House after the failed Nixon coup, has the American economy seen a month as bad as the last month has been. According to The New York Times, almost 2,000,000 jobs have been lost in the past year, and even George Bush is now using the term "recession."

Can the Gov't Run the Auto Industry:

Was it really almost twenty years ago that people were celebrating the fall of communism, the failure of governments to run their countries' economies? America's big three auto makers are on the verge of collapse and in Washington, where they are trying to convince congress to give them 34 billion dollars. It's hard to imagine the government dumping that kind of money into an industry without imposing oversight. (See The New York Times' story.)

Apparently, it doesn't matter just a whole lot what sort of economic system is in place. People seem to be prone to screwing things up no matter what.

Honda announced that it is pulling out of Formula One racing, after its November sales fell off by 32 percent compared to November of last year. Even good cars, it appears, are having difficulty selling.

So Is It a Good Time To Buy a House?

Ron Lieber suggests in today's New York Times that this might actually be a good time to buy a house if you're a first time buyer. Nobody knows for sure when the market is going to bottom out, but when it hits that point, it will be the right moment, provided your job is secure. At some point, the economy will rebound. Will that be in six months? Or six years?

What You Always Suspected:

Passing wind is more harmful to the environment than driving your car. Yup, belching and farting—even the words are too disgusting for polite society—are much worse than the exhaust that comes out of your car or the smokestack of your local power plant. And it's not the smell we're talking about here.

Methane gas—pew—is 25 times more effective at trapping heat in the atmosphere than carbon dioxide. And the worst culprits aren't the fellow you're trapped in the elevator with but the cattle and hogs that are being raised to feed a burgeoning human population that more and more demands to eat meat. According to The New York Times, the demand for red meat "is expected to double globally between 2000 and 2050." Cows and pigs are regular methane gas factories.

One solution is to harness all of that gas to generate electricity. But it should be remembered that it requires two to three times the plant protein in order to create red meat protein from pigs and cows, not a very efficient means of feeding large masses of people.

A Beautiful Light Goes Out:

As Christmas lights go up around the country, one beautiful light has ceased to shine: Odetta died today. (See the NPR story: Hear the Remembrance)

What You've Been Thinking for Months Turns Out To Be True:

The final results are in now. It's official. The American economy is in a state of recession. The New York Times' headline reads, "Dow Plunges 680 Points as Recession Is Declared."

Now that's not like "war has been declared." It's not like the recession has just started. On the contrary, the recession, we are told, actually started about a year ago, in December of 2007. Surely, you're not missing the irony here, and if you didn't get it before now, you certainly realize that the stock market is governed by—caution, pun warning—pure speculation. Ouch! Well, retirement never did seem all that appealing, did it?

Looking for a Job?

Over thirty museums are currently seeking directors. Must be knowledgeable, enthusiastic, and most importantly really, really good at raising money. (See NPR.org.)