Monday, December 8, 2008

The Worst of All Worlds

If we are stuck with the belief that "government is bad" whoJustify Full do we have left? Private industry? I had a conversation many years ago with an ex-friend, a friend at the time, who insisted with a totally straight face that the leaders of industry were good, well intentioned people who left to their own devices would keep the ship of state afloat and prosperous. This from a man who had, at the time been awarded the largest settlement in history for blowing the whistle on a corporation cheating the government of around 15o million dollars. According to the news reports from the time my ex-friend walked away with around 22 million dollars (of which one third must have gone to his attorney who decided to use the proceeds to fund pro-bono defense of capital murder cases). My ex-friend and I fell apart finally when I accused Colin Powell of lying during his famous uranium speech at the UN. "Lying? You think the Secretary of State is lying?" my ex-friend spluttered. "That or he is reading a speech written by liars," I said, and we parted ways. The fact that history proved me right was not much comfort. I lost a friend and the country lost thousands dead and injured and trillions in treasure.
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I read today (naked capitalism) that AIG is still supplying bonuses to its leaders after receiving a $152 billion dollar check from we the taxpayers. They did the deed before Thanksgiving so we wouldn't notice (we didn't!) and somehow that's supposed to be okay. I am no fan of the automaker's bailout but they are small beer ($34 billion total?), and they offer people real jobs, compared to the crud that festers in the financial industry. I find it astonishing that we can be so prosperous as a nation (the lights came on as usual this morning! That's good news...) and be led by such morons. They must think we are the morons. Where's my pitchfork?
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The problem is, if not them, who? The mistrust of government that has been put about by the same press that failed to notice the bonuses, is eating us up. The problem as I see it is that the people in government aren't bureaucrats, they are people from the industry sector. The reason the Treasury Secretary black mails the country into handing him carte blanche for the disbursement of the $700 billion is because he is one of them. He came to the Administration from Goldman Sachs the investment bankers and rivals of Lehman Brothers who he allowed to fail and thus they disappeared! The rest of the bail out plan? Who knows!
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So, let's review. The Credit Default Swaps are still floating around unclaimed and not dealt with so banks won't loan money as they still aren't sure what they or their clients will need in reserve to pay them off when they come due, eventually. In the absence of loans business is drying up, so we are getting record unemployment statistics, the official U-6 measure of unemployment (unemployed and under-employed) stands at 12.5%, half the generally accepted level which indicates a Depression. We the people have been screwed coming and going by business and the government who are passing around our money and peeling their retirement bonuses off the top. We trust no one. African states don't trust western powers so even though 150,000 people in Zimbabwe have cholera they don't want foreign intervention to depose Dictator Mugabe. Mugabe has managed to give the white minority racist government a good name because Rhodesia was a food exporter twenty five years ago...Greece is in flames because police shot a kid over government education policies (!) and an international aid agency says the Taliban are back in Kabul and all our military intervention there was for naught. Oh and despite billions spent to prop it up Venice is sinking ( exceptional pictures on A1A News) again.
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And then people write in and tell me I am unduly pessimistic! My supply of Irony is full to overflowing, anybody want any?

Villa Mill

I had a moment last month when we got a call about someone passed out at Villa Mill Lane. My colleague who took the call said out loud: "Villa Mill Lane..?" Which was my opportunity to pipe up and explain it was off United Street...and thus I looked good once again to my incredulous co-worker. Ha, little did Noel know my wife used to have a job in the building shown in the photo above. Then they moved the Department of Juvenile Justice to Stock Island and she had to move out. But I remembered where Villa Mill Lane was.There really is no reason to know why this lane exists unless one happened to live or work there. It has little of special significance, and even the architecture isn't much. I guess I just needed a break from impossibly cute lanes in the pretty parts of town. It's not that Villa Mill is ugly or anything, there is lots of greenery and stuff:And this, though what this is exactly I'm not too sure. It looks like a brightly colored fish made out of cloth, serving an indefinable purpose:The entrance to the lane is marked by these poles bright scarlet and very visible:
And there are pretty enough homes of course, some scarred by the intrusion of modern technology:And then there was the cat, imperiously licking itself clean in a public place:And that was that for Villa Mill. It wasn't even sunny, so you can see even the Keys have the capacity to suffer from nasty winter weather..

Sunday, December 7, 2008

Loan Modification

My wife spent Friday night with a couple of girlfriends while I was dragging myself through the last shift of an awful week. She had some interesting news for a Saturday lunch. She told me one of her buddies, a property appraiser had sent Bank of America and appraisal on a home where the bank was offering to reduce the interest rate to 4.5 percent. All the home owner had to do was pay a few hundred dollars for the appraisal and sign the papers. Bank of America paid the costs of the refinance operation. "We're calling Wells Fargo!" my wife said with a gleam in her eye.
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Then I read an item in Mish's Financial Monitor, a well known observer of the economy, one of those voices that sits outside the mainstream CC/Fox/WSJ arena. He had an item reporting that investors in Countrywide, the mortgage company bought by Bank of America in one of it's more stupid moments, are now fighting Bank of America's mortgage modifications. Investors in Country wide could legally force Bank of America to buy outright $80 billion dollars-worth of loans. This, because the investors in Countrywide are having their own stupid moment. Bank of America hasn't suddenly gone soft, it just figures it's better to keep people in their over priced homes paying a monthly nut, even a reduced one, rather than having them step away.
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The investors in Country wide must be thinking this is their way to get paid off and escape the crisis, but instead if they block the loan modification program they will end up pushing more and more people out of their mortgages with predictable consequences. I shudder as I think of the estimates 600 homes in foreclosure proceedings in the Lower Keys. I have not added up the number myself let me hasten to add, but that is the number currently bandied about.
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The thing that struck me about this story was that my economic mentor Ty sent me a complicated paper some weeks ago describing this dilemma precisely. The discussion mentioned the fact that most mortgages are being used to back investment packages that ultimately control the loan, and should the federal Government chose to modify the terms of the loans the holders of the investment packages can legally force the government to buy the loans outright. And guess what? Here it is- happening exactly as predicted!
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This economic crises is much more far reaching and complex than a lot of people want to think it is. I hope we get a new set of l;eaders who can talk truth to us and invovle us in what they plan to do.

The Holiday Spirit

I don't suppose it comes as much of a surprise but a theme of the recent Thanksgiving business of giving thanks around the table involved being grateful for where we are. Anyone who wants blizzards and low gray skies for the November holiday might as well not show up in the Keys. This year the weather was perfect, around 75 degrees when the sun was up and only a little cooler as the sun sank out of sight.I think there were about 25 of us gathered around the table in the expansive home in Cudjoe Gardens. Everyone brought dishes as is the way, and of course there was too much to eat but I found my favorites in the corn pudding and baked mushrooms, even though my wife's spicy sweet potatoes elicited some interested enquiries.
It is easy enough to give thanks while sitting down to an overly full plate in shirt sleeves and we duly did just that, thanks for family and friends, for ease of living and so forth.To me the gathering had an air of unreality that belied the parlous nature of the economy and our own future in it. In some ways this sense of living through an interim, between the easy going past and a darker future puts me in mind of similar periods in history when human events took a sharp turn. As the sun set across the canal I heard voices raised, alongside wine glasses, in optimistic promises of whatever the future "we will pull through" and in quieter conversations I heard from people afraid of what may be to come in the next year. My buddy Robert, our host, is one of those that tend towards the optimistic side of the scale and he sat back after the round of thanksgiving with a beatific smile on his face as he watched his friends dig in.Robert moved to the Keys in 1976 lived on a boat, made friends and worked where he could. Once he had made it down here he knew he never wanted to leave. He used to tell me he didn't care if he never went north of the Seven Mile Bridge again. He has made it out of the Keys a few times and nowadays he's engaged to be married to a woman who positively revels in travel so he crosses the bridge more often than formerly. But Robert remains anchored in the islands, and he's seen lost of difficult times which gives him the confidence to know that the future won't be as bad as it could be. He keeps on keeping on,working for the Marine Sanctuary, organizing beach clean ups, educating boaters and keeping the Team Ocean program busy out on the waters of the Keys preserving the environment.Part of the getting-to-know-you routine of these kinds of gatherings is finding out where people are from. So there I am with almost no knowledge of any place between California and Florida and Robert is reminiscing with Rebecca about her home town in Wisconsin that goes by the unlikely name of Lake Geneva. Imagine my surprise when one of the people at the table not previously known to me sidles up and starts in about Northern California. She misses her artists cabin in the Santa Lucia mountains of the Big Sur coast where she lived wielding a potter's wheel and now her family ties have dragged her back to the Keys, where she lives pining away for a her California fog. I felt bad for her, but she's on her own, I'm glad I'm here. Even the egg nog tasted good, though perhaps the shot of rum accounted for that:Gradually the guests took their leave, the Swedes, the kid who cut me the most enormous slice of chocolate cake, the dude from keys Energy who explained how the tie line from the mainland works which answered a nerdy question that had plagued me for a while, and the unhappy California potter, among others,leaving Robert and Dolly along with the wife and myself to talk trash about the early departures. We actually didn't have anything to say about the other guests and i got instead to learn about something called Tivo, a way to record television programs off cable and watch them at a time of the viewer's own choosing. Technology still manages to surprise me. My wife and I have graduated to watching films downloaded from Netflix directly to the laptop in addition to ordering discs to view in the traditional way. I expect it won't be too long before video discs will be replaced entirely by electronic memory cells transmitted by wireless. I remember when video cassettes made their entry into my life and they seemed extraordinary with their ability to recreate television programs that used to be lost forever once broadcast.I have been viewing my neighborhood through the lens of distorted economics through which we are currently living and it seems as though the grasses are growing more rank by the day, "For Sale" signs are drooping and my sense of unease makes me excessively sensitive to these negative signs sprouting around the canals of the Lower Keys. This was a Thanksgiving that made me especially sensitive to how well off I am these days. I'm not alone:It's funny to me that I am chewing my lip worrying about the economy and a house up the street has a big hole alongside waiting for an in ground pool to be dropped in.More power to them I say, it is a job and work and money into the local economy for construction workers who aren't over worked these days. I keep seeing cement stilts on empty lots sitting there waiting for a home to be placed on them,and so far...nothing. The serenity of a Thanksgiving evening can't be that serene if you don't have a job.
We had planned an evening off in the bright lights of the big city but before we could get to Key West we got a call from Lisa and Jacques who wanted help, they said decorating their tree. These two are teachers with tenure in the district,they've moved to the Lower keys after many years of travel and adventure teaching around the world and they like where they are living and what they are doing. It was rather cool to be invited around to do what my (Jewish) wife and i never have done together: We decorated for a while and the wretched little lights worked just fine, which they never seemed to when I was a kid (before Lisa and Jacques were born) so we sat down and drank wine and ate some rather toothsome pumpkin trifle and wondered about the state of the world.I like their company because they are a happy couple and they make a serene and safe place to visit even at the holidays when tensions rise and people get short with each other. I can let my guard down and that for me is the value of Christmas. I hate the expectations of consumer shopping and I hate the misery that poverty brings with it at this time of year when parents are supposed to go over the top for their kids. I read somewhere that the average age of a homeless person in the US is ten years of age and that is so wrong it takes one's breath away.Jacques is a powerhouse, not just of wine drinking but also bio-diesel and his contribution to the greening of the Keys is development of a bio-diesel program for the school district. He has several degrees and a background in science and he managed to give me some modest explanation of bio diesel involving fat and lye and precipitation, which made me want to go out and buy a US military diesel powered motorcycle. I tried a chocolate cup cake instead.
The good vibes of Thanksgiving and tree decorating will have to carry me through the entire holiday season I guess and see me pop out the other end ready to face whatever credit crunch is squeezing our collective testicles in 2009. Friends are what will get us through. Friends and a job, that would be good to have.

Saturday, December 6, 2008

In Memoriam

We said good bye to Keith yesterday, one more step on the road to dissolution in the bond between our world and his. It was a beautiful day in the Keys, warming up under hazy sunshine as a massive crowd gathered outside and in, at the church on William Street, with law enforcement from every agency showing up to help in the process of letting go:It was a slow shuffle into the church, trying to keep one's mind on higher things, allowing the mind to veer away and not to let slip the feelings that have been swirling the past several days. Its a strange way we have of attending these kinds of functions in the western world. I've seen Indian widows on the sidelines of their husbands funeral pyres throwing up their arms in a whirlwind of emotion, casting out the inner demons in shrieks of despair that rend the air. In Latin America I've seen similar volcanic eruptions of feral anger and sorrow. We, on the other hand stand around like mannequins and pretend it's just another sunny day in paradise. If, God forbid, tears start to roll we apologize, embarrassed and turn away. Stupid, I know, but I'm as bad as all the rest and wear my mask of silent indifference.I stood over Keith's mortal remains a moment, marveling at his composure in the face of so much love, so much emotion all through the church as he lay in his final resting place, his dark blue K9 uniform solid in contrast to the clouds of white silk surrounding his body. Then I marched out stoically in proper mannequin style to the sunshine outside.
Make no mistake, the memorial service was good bye but it was also a promise to the young man whose career has ended so prematurely. Keith won't be forgotten and those of us that live on and remember him will be reminded who he was at every turn. That was brought home to me when I showed up for work last night, a little bleary eyed I admit from lack of sleep and surfeit of emotion and I was greeted thusly:Sergeant Brandenberg, his fellow K9 officer caught me admiring the display and asked what I thought. Overwhelming was my response and he smiled. "It took them two days to make that," he said with pride pointing to the particular wreath:"Will you do that for me, when my time comes?" I asked, trying to lighten the tone. "You can't have the K9," said the canine sergeant. "That's ours. But we'll think of something for dispatch." I'll bet they will too. They flew flags across the county at half staff for Keith, making room as is the way, for the flag of Death to fly at the top of the pole:I nearly broke down when I saw Keith's patrol car parked in front of the church, his partner's name Daxo, printed on the side. The older I get the more I prefer dogs to the company of humans which reminded me of the times Keith came into dispatch with Daxo. "Don't do that!"Keith would yell at me when I went to pet Daxo. "I keep telling people not to touch a K9's head. He's going to hurt you!" Bugger off Keith, I said, dogs like me, and Daxo did, nuzzling my crotch offering me his nose and behaving like a pet which perhaps may have pissed off his handler ever so slightly. It was a distraction having a large panting German Shepherd sloping round the computers while we tried to dispatch, and it was all too easy to mind Daxo when it was Keith and one of his stories wanting attention.

It was just another sunset in the Keys the end of another day, the beginning of another work night for me, another round of dispatching, talking on the radio, herding hedgehogs and keeping those youngsters with guns safe. And this morning at the end of the shift when I take off across those same Saddlebunch Keys towards home there won't be the K9 car bounding home ahead of me with Keith and Daxo, like Calvin and Hobbes concluding another night of adventures together. Not today, not anymore.

Friday, December 5, 2008

La Dolce Vita

Suppose you wanted to be a pharmacist when you grew up and you had the misfortune to grow up in Europe somewhere, let's say Italy. You'd go through school paid for by the government on a promise that you'd get a pension and no charge for the schooling if you worked until you were 66 (men) 62 (women) though as budgets shrink those numbers are subject to change. You have your degree and you complete an apprenticeship period in a pharmacy and you get the position because your father knows the pharmacist that owns the shop. Suppose you then want to open your own pharmacy, like all good ambitious young people are wont to do. The thing is the government won't give you a license because all the pharmacy licenses planned for your community are full. It doesn't matter if you see an opening or believe you can undercut an inefficient operation already on the ground. The government has planned X number of pharmacies for your area and they are taken. That's that.
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To an American that sounds crazy, but welcome to the world of social democracy Western Europe style. I kid you not, the land where central planning rules. It used to be a bit looser but even when the seminal French Revolution hit the streets central planning was the objective. The French Republic has always been about the state, with the people, in liberty, fraternity and equality, working together to benefit the central government which then takes care that no one falls off the apple cart. The American Revolution was also about liberty etc... bit it posited a system of free will and minimal central government to allow individuals to grow as they saw fit. The American system took a hit with the Great Depression when actual live suffering swept the land and regulations were laid down to prevent such catastrophes re-occurring. The French system got a nice reinforcement when World War Two brought catastrophe to France thanks to the weakness of government and the central planning and firm direction of France's perennial enemy Germany.
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After World war Two Western Europe, a smoking ruin was rebuilt thanks to central planning and introduced cradle-to-grave welfare to prevent a repetition of such horrible suffering in any one's lifetime. In the US cheap abundant oil and a n industrial base untouched by war time bombing created wealth aplenty for everyone carefully regulated by the New Deal still in force.
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The youth revolutions of 1968 created a demand for freedom in Europe that went largely unanswered so the War leaders were slowly discarded while in the US the civil rights riots slowly forced an unwilling and wealthy white population to yield. But the Depression was a long way behind us and people had forgotten starvation and catastrophe and the Reagan/Thatcher combo came to power and respectively dismantled the New Deal and the Inheritance structure of their countries. And so the house of cards grew in an atmosphere of fake wealth and the Ponzi scheme of useless regulation and no oversight. And now, here we are.
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I have long held the opinion that short historical memories are what caused Americans to embrace Reaganism, a theory of economic freedom that would only work in limited fashion if overseen by tight government oversight. Instead the mantra that "government is bad and big government is worse" has brought about a catastrophe that is going to equal that of the Great Depression. On top of the conomic failures we have climate change still underway and the low cost of oil is likely to shrivel up the search for alternatives. If petroleum is being sold at $45 a barrel how can solar wind and geothermal compete? Will they need to? Will total economic collapse postpone climate change? I hope not because I don't want to suffer that much, thanks.
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You know we have reached the end of the economic rope when the health insurance companies in the US are proposing their own national insurance scheme incorporating all those features that we have demanded for so long and have been stymied by them. My wife had wrist surgery last year brought about by the deterioration her rheumatoid arthritis. She has excellent health insurance through the school district yet our share of her bill was almost $7,000. And we still get paperwork and bills and and questionnaires a year later. My step mother died in England a decade ago of throat cancer after a lifetime smoking. She had her jaw surgically removed and when that failed she had round-the-clock home nursing and home visits by her doctor to administer pain medication until she died. Not only was there no cost, there was NO paperwork. So, as you stare into the abyss of economic destruction, which way do you want to go? Central planning or free market economics? Low taxes or VAT?