Epilogue

A few observations about the National elections:

• The huge voter turnout was indicative of a restive populace looking for something different than what the current Administration has wrought.  The voters might be called lots of things, but complacent would not be one of them.
• A neo-conservative, ideologically divisive and demagogical approach to politics probably works when the resulting policies actually lead to something constructive.  Otherwise, payback’s a bitch.  In retrospect, George Bush beat John McCain twice.
• Although only a first step, eloquent speaking is a great first step.  Obama’s victory speech sort of puts into perspective the oratorical vacuum of the past eight years.
• If the Democratic Party can turn this campaign’s organizational approach into a repeatable phenomenon then the Republican Party will have its work cut out for it, for many years to come.
• The relative closeness of the popular vote indicates that this country still has a lot of healing to do.  As much as I would like to believe that we are the United States – and not Red and Blue states – much needs to be done to heal the wounds of the past eight years.

Let the healing begin.

Ted Stevens Needs Your Vote

Upon today’s conviction by a jury of his peers, legendary Senator Ted “Internets” Stevens probably worsened his chances of being re-elected to the U.S. Senate.  He certainly can keep his campaign going to Voting day next week, since neither the Constitution nor Senate rules prevent a convicted felon from serving in the Senate.  There is one thing that Stevens can’t do, however.

He can’t vote for himself.  He can’t vote, period.  Maybe.

The State of Alaska prohibits convicted felons from registering to vote until after they have served their sentence, including probation.  At this moment he is a convicted felon.  Since Stevens is already registered, though, does this mean he can still vote?  I can’t find any Alaska precedent to answer this, but my guess is that if he were an ordinary citizen he would be stripped of his right to vote the moment the jury passed judgment.  Some astute reporter ought to get us an answer to this one before next Tuesday.

My Dinner with Newt

Newt Gingrich was the keynote speaker at last night’s BioMed Upstate conference hosted by the Foundation for Healthy Living.  The moderately well-attended (but overly long) conference focused on the barriers our state imposes on the Life Sciences economy and solutions to overcoming those barriers to accelerate growth in Life Sciences.

The sessions drifted off-topic to the various ways the New York stifles economic growth in general and to the great divide between Upstate and Downstate, to which the attendees agreed “Change is needed“.   As to what that meant and who should take responsibility for leading it, those answers were not so clear.  Not so clear at all.  And the conference was pretty dry – academic in nature, almost dispassionate really, and IMHO was very poorly attended by industry representatives who are ultimately the ones who create jobs and/or leave the state.  Numerous academics and government officials were in attendance, but the one group that could really make a difference was way under-represented.

Anyway, Newt was pretty interesting.  He made a point about how poorly the Federal Government doesn’t understand the difference between investment and expense.  He cited that the Baby Boomer generation alone will cost the U.S. $1.6 trillion in health care costs just for treatment of Alzheimer’s patients.  But if treatments could be found that delayed the onset of severe symptoms for just 5 years, the costs would drop $600 billion.  Then he challenged the audience:  If you could save $600 billion over the next 20 years, how much would you spend today?  Newt’s implication was that far too often the government won’t budget for that kind of savings – they won’t make the investment – because today it’s just an expense with no short-term benefit.

Conferences like these raise important questions but rarely do the spawn that passionate white knight who can lead the charge to a new way of thinking, and actually persist long enough to stimulate real change.  How do we convince our political leaders to reach beyond the policies of the past 50 years to something that bears future fruit?  At the conference, we were at a loss to answer that question.

So, What ARE the Fundamentals?

I have been intrigued by the use of the phrase “The fundamentals are strong”.  It’s been used often by the Bush Administration until recently, and just a few weeks ago by John McCain to indicate that our economy is still strong, without ever defining what the fundamentals are.  Ironically, the person who originally coined the equivalent phrase is none other than Herbert Hoover.  Whoa boy.

I don’t believe that the fundamentals have been strong for so time, but I wasn’t sure and so didn’t know whether or not to believe either the Bush Administration or John McCain.  So I dug back to my college economics texts to get an idea of what the economic fundamentals are.  To Samuelson, they include

• Inflation (or consumer price index) – the lower, the better
• Economic growth (or gross domestic product) – the greater, the better
• Wages – Higher is better
• Unemployment – the lower, the better
• Industrial production – growth is good
• Worker productivity – more is better
• Balance of trade – Positive is good
• Strength of the dollar – stronger is better

Respectively, in the past 12 months these indicators are up, flat, flat, up, down, up, negative, weaker.  Six of the eight are pointing in the wrong direction, one is neutral, and one (worker productivity) is positive.

I thought so.

“The fundamentals are strong” might not be the wisest of political statements to make, in light of where the economy’s been going.  Nonetheless, the Presidential candidates might be better spending their time talking about it, since all the rest of us are.

Monday’s Election

The election on Monday is close – really close.  Originally the conservative segment looked to be ahead by a dozen points, but in the past few days the liberal segment has gained considerable ground.

In Canada.  Conservative Stephen Harper’s “Stay the Course” rhetoric is causing consternation among many voting Canadians as their economic woes worsen daily.  Their stock market is also tumbling as fast as the U.S. markets and suffered its worst one-day drop in 20 years this past Monday.  Stephane Dion’s Liberal party is four points off the Conservative’s 33% plurality.

Neither the Conservatives nor Liberals will likely get enough votes to create a solid majority, meaning that for the third time in a row, Canada will have to form a coalition government.  It also means that Canada will have a fractious Parliament to deal with fractious issues.

This is important not only to us border states but to the nation in general.  Canada is still our biggest trading partner and we import more oil from them than any other country.  What goes on in Canada generally impacts us more than what goes on in Europe, although you’d never know it from watching the news.

The House Bailout Bill

The House of Representatives added to and otherwise modified 34 sections of H.R. 1424, the so-called bailout bill, passed by the Senate two days ago.  They then voted on and passed it and the President signed it into law about two hours after that.  It took $150 billion in earmarks to sweeten the deal enough for 59 Representatives to change their votes between Monday and Friday.

All told the Bush Administration and Congress have added roughly $1.4 trillion to the national debt since January.  This does not include the 2008 budget deficit, which will add between $200 billion and $400 billion more.  The Dow Jones responded with joy by only dropping another 157 points.

We have crossed the line from Capitalism to Socialism.  Capitalism when the markets are adding to the coffers of the wealthiest institutions, Socialism when taxpayer-funded bailouts are needed to shore up those same institutions because of those markets.  I notice that suddenly, no one is using the term Socialism, but there it is.  Stan O’Neal is probably busting a gut on his yacht right now, laughing at all those Congressional patsies.

One must wonder that a bill, written in a few days with 170 sections and 450 pages, could possibly be cohesive and not swiss-cheesy.  Do you think that big financial companies with leagues of lawyers and accountants will spend a lot of effort to find all those loopholes that will benefit them the most?  I do.

They got their Christmas bonuses early this year.  We got coal.

Nu-cu-ler

Did Sarah Palin say Nu-cu-ler during her debate?  Four times?

Arrggh.

The Senate Bailout Bill

President Bush’s bailout bill was 3 pages in length.  The one that the House of Representatives defeated was 106.  The Senate bailout bill passed on October 1st is 451 pages.  Historians will note that this is a mental health bill with a few additional provisions.

Only the first 113 pages of the Senate bill are actually related to the bailout.  The remainder are essentially pork barrel provisions attached to get Senators to vote for the plan, including:

• Renewable energy credits
• FUTA surtax
• Alternative minimum tax relief
• Tax breaks for teachers
• Investment in Washington, DC
• Something about wooden arrows and children
• and on and on

There are 101 energy, tax, mental health, Federal land and disaster provisions – something for everyone.  It has essentially become an energy and tax credit plan with an oh-by-the-way bailout attached to the front of it.  This is how we legislate.

Read it here if you’d like.  It’s a PDF document.

Yet the non-bailout riders in the House plan will wildly top this.  I am wildly disgusted and will torture myself by poring through the House bill as soon as I can find it.

Throw the Bums Out

I’ve been trying to come up with the right words to say how I feel about the $700B giveaway to Wall Street.  It is clear that measures to increase confidence in the markets are necessary and that the alternative – hanging all those Wall Street dealers by their balls – would not be civil (although it might make for good reality TV).  It is unclear to me that a monetary bailout is either prudent or effective.

What bothers me greatly is that the issue of a housing market and lending bubble has been obvious for years, yet nothing was done to oversee or regulate those that were taking advantage of it.  Even a television show was created to profit from the hysteria surrounding unsustainable home price escalation.

Wall Street and personal greed notwithstanding, this was a preventable calamity had Congress chosen not to look the other way until the crisis was upon us.  Indeed, it appears that that the U.S. governs by crisis, that politicians have only enough political will to hope the problems away – until they are, too late, already in the belly of the beast (and us along with them).

To make it worse, bailouts create the expectation of future bailouts.  This is an ever-tightening spiral that has us already circling the drain.  We saw it in the 80′s with the S&L bailout and the creation of Resolution Trust; we see it today with Fannie Mae, Freddie Mac and AIG.  Tomorrow it will be the airlines and automotive industries, and then the medical system.

I am so steamed about this because the people who are supposed to be leading this country have contorted the definition of leadership to the very exclusion of it.  They bloviate whenever a camera is rolling, bicker about the other party throwing up roadblocks, pass pork-filled budgets and then have the gall to run for office based on proven leadership.

It’s time to throw the bums out.  All of them.  Every. Single. Incumbent.  Maybe, just maybe, the next group of politicians will get the message that we’re fed up and just won’t take it anymore.

Un-Bailout

Okay, so the Dow is finishing up 485 points after being down 777 yesterday, and the government still hasn’t done anything?

Oh, wait.  The government hasn’t done anything about this pending crisis for the five years that it’s been pending since Wall Street began putting bows on shit.  I’m finding myself in the camp of those who think we should just sit on our hands a little longer and watch the market take care of itself.  After all, if a government bailout is so good for the public, then why aren’t major investors lining up to invest as well?  Maybe it’s because they’re so close the smell is getting to them.  Maybe it’s because they know better.

I understand there is a long line at the Lowe’s near Wall Street for hemp rope.  And that Darien, Ct (median income:  $168K) is really going to suffer from the fallout.

Counties with the Heaviest Tax Burden

Niagara County residents carry the heaviest property-tax burden in America, according to a new report from the Tax Foundation.

This week’s Buffalo Business First article (not yet available on line) reports that the average Niagara County household pays 2.92% of the value of their home to taxes.  It amounts to 5.0% of the homeowner’s yearly income, $2,802 on a home valued at $96,000.  [Note to self:  It also means your average home is not worth twice your annual income].

The noticeable thing about this article was that of the top 12 counties, 10 of them are in New York.  Erie County ranks 7th nationally; we pay 4.7% of our income in real estate taxes.  By percentage of home value, the most taxed California county ranked 570th out of 788.

But surely, Californians must pay lots of taxes because their home values are so huge, right?  Nope.  If you rank the counties by amount paid, the first California county to make the list comes in at 25th.  There are 6 New York counties ahead of it (including #1 and #3) and combined, New York/New Jersey take 21 of the top 25 spots.

In 2007 the U.S. median real estate tax was $1,838.  In Erie County it’s $2,822.

When we add school and state income taxes to our annual burden it’s little wonder that our take-home pay doesn’t go far, why businesses have difficulty staying in and coming to New York State, and why so many people leave.  And yet in 38 days, nearly every one of our incumbent state legislators will be re-elected.

I do not expect tax equity to come from within the marble halls of Albany’s legislative complex.

The Surge

“This strategy has succeeded, and we are winning in Iraq.”

– Senator John McCain, September 26th, 2008

The Surge certainly appears to have reduced overall violence and death in Iraq this past year.  I am grateful for the reduction in violence.

But is it the Surge, or is it the forced segregation of Kurds, Sunnis and Shiites and the exodus and displacement of over 2 million Iraqis to other countries that is the real reason?  The eventual withdrawal of U.S. troops from Iraq will tell.

My bet is that Iraq will fall into a very bloody civil war no matter when we withdraw.  I pray I’m wrong.

Big Numbers

My head is just spinning from all the big numbers.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

The Treasury spokeswoman is referring to the $700 billion Wall Street bailout number.  Which in reality could be any really big number, like a trillion dollars or even more, or maybe less but probably not.  Doesn’t matter, as long as it’s big.

I appreciated the $600 rebate check that I got from my government last May.  But given the cause of the ongoing economic crisis I don’t see how giving me money (and spending $170 billion total) could possibly have been a solution to it.  But it was only $170 billion.

Then the government gave $29 billion to JP Morgan, $200+ billion to Fannie/Freddie and $85 billion to AIG and is about to give a whole bunch of money to Wall Street; to the same financial institutions who gave themselves $38 billion in bonuses last year while losing $74 billion for their shareholders.  We’re about to reward their greed, and their failure, with a really big present.

There is one group that has publicly stated

We do not support government bailouts of private institutions.

But they will, along with everyone else in Congress because this three-year-old debacle has now turned into a crisis so large that there is no way out.

So the past 72 hours have seen a Congressional debate of historic proportions, based on a number that someone pulled out of his ass, to salvage a set of institutions that gifted their executives in one year more than the entire budget for the National Institutes of Health.

Hmmm.  Very generous.

Campaigns 2

Some of the more interesting campaigns are the personal ones.  I’m particularly impressed with this person’s attempt to qualify Barack Obama in as few words as possible.

From just four words I believe I can characterize this individual as

• Not interested in reading or research
• Barely able to finish high school
• A beer drinker who perfected the burp at 14
• Set in his ways

During this Presidential runup I’m going to scour the Internet for campaign signs like this; it shouts volumes about our electorate.  And it’s fun, too.

Campaigns

It’s not about the people; it’s about winning.

It’s not about what’s best for the country; it’s about winning.

The Presidential election is, like all other elections, a popularity contest.  I dread the next fifty-some days of attack ads, vitriol and general lack of specifics that will lead us to November 4th.

The primaries were a warm-up.  It embarrasses me how we run them, and run our elections.  Whatever happened to platforms and issues?

Someone knock on my closet door when it’s over.

In the Meantime…

…There is OTHER news in the world that does not involve U.S. Presidential campaign politics.  Important news.

This coming Sunday Stephen Harper (he’s the Canadian Prime Minister) will announce new elections on October 14th, the soonest he can call by Canadian law.  His opponents – and there are many:  he’s not the most popular Prime Minister Canada ever had – are making several interesting claims about him, starting with Harper’s attempt to hold these elections quickly to avoid the possibility of investigators uncovering more unscrupulous campaign activities than they’ve already uncovered.  Harper’s Conservative party calls the claims bunk.  The Conservative party has a plurality but not a majority, and may have to form yet another minority coalition government if they wish to stay in power and for Harper keep his position as PM.  This would be the second minority government in a row, something that has happened only once before in Canadian history.  With the Canadian economy in a funk, moving from a surplus to a deficit in Harper’s two years as PM, he is not at all a shoe-in for the job after October.

This is important especially to us border states.  Much of Homeland Security’s border philosophy, for example, comes about from current Canadian immigration policies and, some claim, Harper’s fear-mongering tactics.  In that regard he is often called Canada’s Bush.  Canada is also our largest trading partner.  We get more oil from them than any other country.  Harper and Bush consider each other very strong allies.

It is very unclear if any of the potential candidates from the other three Canadian political parties would be any better with regard to Canadian/US border policy (and by that I mean:  “Would they stand up to the U.S.’s demands to restrict movement across the border?”), but because the Canadian election process will last all of 37 days the election itself will be much less painful to watch and research than our two-plus-year election process.

…Meanwhile, Zimbabwe‘s inflation rate is now estimated at around 50 million percent, the equivalent of a economic half-life every 14 days.  They are now down to bartering gas coupons for anything else tangible, as the currency has essentially no holding power whatsoever.  President Mugabe doesn’t seem overly concerned.  Probably not enough deaths from starvation yet.  Besides:  He controls all the guns.

Lately, I get my news from the BBC and the Toronto Star.  Their reporting does not seem to be nearly so one-dimensional.

Why Kevin Gaughan is Misguided

Yesterday it was announced that FEMA got its new phone system hacked, to the tune of $12,000 dollars in long-distance calls worldwide, including Asia and the Middle East.  FEMA put out the warning about America’s vulnerability to this very threat in 2003.  It’s the same FEMA that handled the preparations for and the aftermath of hurricane Katrina, the same FEMA that then housed thousands of displaced hurricane victims in formaldehyde-laced trailers.  The same FEMA that is not accountable to the American voter.

Today it was announced that the Department of Homeland Security has halted an immigration program aimed at reuniting African refugees with their families because of widespread fraud:  Only 20% of the refugees claiming to be families were related by blood.  Now, DHS doesn’t appear to take into account that most of these refugees come from areas that have been decimated by civil war, disease and starvation, and that perhaps, just perhaps, many of these so-called families comprise men and women who have taken homeless and orphaned children in as their own.  DHS can do this at will – just as they can dictate the terms of the Canadian/U.S. border crossings – because DHS is not accountable to the American voter.

The New York State Thruway Authority has been denounced by many – for years – as a lackluster, bloated haven for patronage jobs and overpaid managers.  Yet they can and do raise the Thruway tolls at will; in fact, all 640 of New York’s authorities can and do use taxpayer money as they please because they are not accountable to the New York State voter.

Okay, now to Kevin Gaughan.  He has been trying, and failing, to convince Western New York town and village governments to reduce their overall size.  The local boards vigorously responded that they are the last places that people like Gaughan should be looking to decrease the cost of government.

Gaughan is hammering the one set of governmental boards that are (generally) held accountable for their actions.  The average town councilman lives in town, goes to church there, does much of his/her business there.  He/she is visible to their constituency.

This is not true at all of government at the county, state or federal level, and absolutely not true of the New York Authorities, FEMA, DHS or most other Federal agencies.

If we are to reduce government bloat we have to do so at the highest of levels, not the lowest.  That’s where the waste is occurring; that’s where the money spigot needs to be tightened.  Because we have control over town and village governments, they are incentivized to be frugal with our taxes; or else they will be out of office.

If Kevin Gaughan put as much energy into fixing Albany or agencies at the Federal level we’d be a lot further ahead.  But what he’s doing is penny-wise and pound-foolish.

Georgia on My Mind

I haven’t cared much for politics these days and I can’t wait for November 5th.  But the Russian invasion of neighboring Georgia and the various political responses made my eyes go a-rolling.

George Bush was exactly right when he said:

“Georgia is a sovereign nation, and its territorial integrity must be respected.”

It’s unfortunate that we as a nation no longer have the moral or global standing to give that statement any teeth.

Get Your Passport Applications in Early!

Today’s criticism of government caught unaware comes courtesy of this article in the Buffalo News, which highlights congressional investigators’ findings that the State Department “has not developed a ‘comprehensive, long-term strategy’ to modernize its passport application process.” The investigation argues that unless changes are made quickly, the new passport regulations that go into effect in 2009 will create similar headaches for millions of Americans (which, unfortunately, includes me).

The investigation cited the passport debacle in 2007, which clearly showed that the State department was not ready for the inrush of passport applications due to the Western Hemisphere Travel Initiative established by Homeland Security.

Department officials have acknowledged underestimating the high demand for passports last year, but said it was a historic change in behavior by Americans that was not predicted.

Not predicted?  The WHTI Final Rule came out in November, 2006 with explicit passport requirements for air travel that affected the Caribbean, Bermuda and other highly-popular off-shore vacation spots, starting in January 2007.  Every vacationer or vacationer-wannebee was affected by that change, as were regular (read: many thousands of) air travelers to Mexico and Canada.  Officials in the State Department had no comment other than to say that they couldn’t predict the demand and therefore couldn’t prepare for it.

You mean sort of like how FEMA couldn’t prepare for Katrina and its effects on New Orleans because the effects of such a storm couldn’t have been predicted?

Being caught unaware – or unwilling to prepare, or cutting budgets that hinder preparedness – has been pervasive and significant and largely irrelevant to this Administration (for a left-leaning eye-opener, read this article); one wonders how the Executive Branch continues to rationalize its decision-making process by denying the problem.

The current Administration’s propensity to do so until it’s way too late is, hopefully, something that will be addressed by the next Adminstration, whoever ends up leading it.  If there is one thing that I’ll remember this Administration for, it’s for the lack of a Plan B.

Ignoring the Opportunity

So, you get a sudden influx of potential buyers for your product.  You know that the window of opportunity won’t last forever, so you jump at the opportunity to take advantage of that market share while it exists, right?

Not if you’re in Western New York government.  They’re more attuned to simply ignoring the opportunity.

Yesterday’s Buffalo News article on Toronto’s attempts to lure airline passenger traffic back to Canada (and away from Buffalo) made no mention that ticket pricing and ease of travel are cyclic and fleeting.  Not very long ago Buffalo was one of the worst places to travel from because of inordinately high pricing and few choices.  Today it ranks in the top five nationwide for low-cost airfares.  It will not stay there forever.

Meanwhile, the obvious growth in international traffic to and from the airport would look to be an opportunity worth exploiting yet little (if anything) has been done to exploit it.  Erie County in particular should be taken to the woodshed for all the politics and the stonewalling of funding for the Convention and Visitors Bureau, a bureau already established to market Western New York.  A few simple and low cost CVB market initiatives might include:

• Just making the entire airport experience better (like in Charlotte, where they put white rocking chairs in the terminals) would be an inexpensive and attractive public relations coup.  I suggest Amish rockers instead.  With various local restaurant advertising on the seat backs. And maps.
• Reduced parking at intentionally faraway lots (like Grand Island or Fort Erie) that include free and regular bus service and a tour guide to describe historical places and events within Western New York, for the 20 minutes that passengers would be a captive audience.  College kids would suck this up for easy money.  Guys on the comedy circuit could hone their material.  Politicians could even make guest appearances.
• A flood of airport literature and television advertising focused on the Canadian market and things you can do in four hours or less.  Like shop at the Galleria, or visit the Casinos.  Or visit Letchworth State Park in the fall, or Taste of Buffalo in July.

Others would have far better ideas than I.

There is a cost to every idea and a calculable return on investment.  It does not take rocket science to figure that if one million Canadian passengers a year are using our airport, convincing just one or two percent to come back – or to extend their time in the area for just a few hours – means importing dollars from 10,000 or 20,000 more tourists who would otherwise simply use our expressways to and from Canada.

At the Buffalo Airport this morning I saw nothing to make me believe that after three or four years we have done anything to take advantage of this market.  Toronto clearly wants to recapture that market and has started down that part of doing so.  We are running out of time to turn a departure point into a destination.