Friday, March 27, 2009

So About Last Night...

Okay, so that post about Midwest Bank yesterday? I take it all back.

They moved down the street. So they're still there, just down the street. Maybe their lease was up. Maybe they got a better deal. But the branch is still there. Just a block and a half away.

I'm sorry.

But as I sort of joked about blogs in that post, it does prove a point about the criticisms of blogs. If I were a reporter for a newspaper, I would have to call Midwest Bank and find out what happened. If I had done that, they would have told me that the branch didn't close and they didn't lay anyone off, they just moved down the street. The story would have ended there.

Blogs are different because there is not fact checking process (well not much of one anyway). Observations are useful and provide great insight, but observations need to be checked. Any sort of reporting should actually be reported. Blogs don't work that way, you see it, you write it, you post it. And if it's not true, oh well.

So I'm sorry about that. Midwest Bank, my apologies.

Thursday, March 26, 2009

If it walks like a duck and talks like a duck...

[Note: I totally misreported on this post. Go here to check out my mistakes. But there are a few interesting points about Mr. Beef and TARP that I think are worth checking out so I'm going to keep this up.]

So I hop off the #6 at Jackson (sorry New Yorkers, we're talking about a real city here), cross Michigan Ave on my way to work. And as I'm walking west on Jackson I notice something different.

An empty store front--an empty bank.

For months I walked by the Midwest Bank on Jackson and often thought, "I wonder if I'd be any good at banking..." but then dismiss the thought about a block later... but last week I didn't even get to ponder my banking prospects. Instead I was left wondering what happened.

Everything was gone--the computers, the paper, the waste baskets, all of it. All I saw was a big empty room with a few desks. Gone were the people I'd look at while I walked by, gone was the manger who had her own desk and who I'd see talking to the people she managed. Like a Gob magic trick, those employees of Midwest Bank were gone.

Two thoughts quickly came to my mind:
1) What happened to Midwest Bank? Did it go under? Were all those employees laid off?
2) This was the first tell-tale sign of the recession (well other than my classmates and my own struggles finding a good job even with graduate degrees).

I'll tackle the second half of everything first. I like to say that the exception doesn't prove the rule, but in this case it seemed like it did. The recession was real because Midwest Bank closed one of its branches.

Sudden the recession had a face. And that face was the empty Midwest Bank.

I didn't know those people at Midwest Bank, but I was seriously bummed out walking by the empty bank. I assume (probably incorrectly) that they were all laid off (I'm sure some were relocated and the rest let go). And while I know a few people who have struggled to find work, this felt more real. My daily routine had some how changed even though none of it effected me personally.

Over the years I've seen empty store fronts and I've seen a business close. But this is some how different. This is a bank, and banks don't close. Banks get bigger or they get bought out. LaSalle Bank becomes Bank of America. That's how banks work.

But there I was walking by an empty bank front.

So what happened to Midwest Bank? They've taken TARP money and want to close down Mr. Beef (the Mr. Beef story is actually very interesting). However, the CEO of Midwest Bank believes the bank is in a strong position even if it is taking TARP money. The CEO above is new, and the old CEO isn't going to receive a golden parachute because of the stimulus. And here is more on the Mr. Beef story. (the owner of Mr. Beef went to Congress to say that the big bad bank was screwing over the little guy, of course the big bad bank is a pretty small bank, and who knows if Mr. Beef was paying his bills... but hey, he wants some of that TARP money).

Nothing on Midwest Bank layoffs or closing branches. If I was a real reporter, I'd give them a call, but alas, something tells me that if I did give 'em a ring and say "Hey, it's the Policy Boy from" they would give me the old Chicago run around.

Wednesday, March 25, 2009

The Things People Write When They Don't Understand Economics and Don't Want to Blame Obama For Anything

God I love her. I love Arianna Huffington. Why? Because she's an idiot with a platform. How did she get her? She married rich. Then she made friends with some people in Hollywood and BANG she had a website. And from this website that is loved by people whom I hope to never meet she gives us her opinion about politics and economics! And guess what? She's a complete idiot! So when Arianna speaks, I type.

On February 10th, the New York Times reported that there had been a "spirited" battle within the Obama administration over restrictions on executive pay and bonuses, and over attaching stringent conditions to any bailout money given to banks.

The clash pitted Tim Geithner, who opposed the restrictions and conditions, against David Axelrod, who favored them. According to the Times, Geithner had "largely prevailed."

Nice use of quotations, Arianna. Sweet back handed compliment, Arianna.

In light of what has happened since then, that outcome must now be viewed as a tragic surrender to Geithner, Summers, and the political/Wall Street class -- a "victory" that could lead to the unraveling of the president's entire economic policy.

Yeah. No. But sure. In political movie thrillers, then sure something like the A.I.G. bonuses could bring down the entire country. But in this little thing I like to call reality, I don't think so. In fact, the chances that the A.I.G. bonuses bullshit brings down the Obama economic policy (more on that in a second) are zero.

And speaking of the Obama economic policy... what is it? Yeah yeah, I know, stimulus and more TARP funds and toxic assets off the book, blah blah blah... but it doesn't have a name. It isn't a New New Deal or a New Fair Deal or a Gerater Society. In other words, Obama, like everyone including the FED is flying by the seat of their pants. So to say that the Obama economic policy may fail... well... the problem is there really isn't an economic policy. But it's Arianna's reality and we're just reading it.

Maintaining the public trust is always important for a leader, but especially so during hard times.

I fucking wish I had used this to open my three page paper on FDR in 8th grade history. Fucking fuck. That is an AMAZING opening sentence to an 8th grade paper. Seriously. Read that again. It's 14 year-old gold.

There is a fascinating chapter on Nelson Mandela in Stan Greenberg's new book, Dispatches from the War Room, in which Greenberg writes about how even the revered Mandela suffered a loss of public confidence when change did not come fast enough after he took office. "Don't assume the current euphoria, even with your high approval rating will carry you through," Greenberg counsels Obama, stressing the need to try to build up enough trust so that the public will stay with the president until they can actually experience change.

What? Nelson Mandela? Stan Greenberg counseling Obama? Where is this going? What is happening?

Geithner's feigned surprise at AIG has been a body blow to public confidence in the president. According to Sunday's Rassmussen poll, just 12 percent of those Rassmussen defines as "Populists" have a favorable opinion of Geithner while those Rassmussen identifies as "America's Political Class" have a 76 percent favorable opinion of him.

What is she talking about? Who calls one's self a populist? Where are these people? And secondly, what is her point? What is she trying to say to us? So 76% of the people who follow this stuff think Geithner is doing a good job. Is that her point? Or is Arianna attempting to tell us that she too is a populist? I'm confused. But I love her.

It was painful to watch Obama, just hours after Geithner had admitted his role in the Dodd/bonus loophole affair, go on Jay Leno and say that Geithner is doing an "outstanding job." Even before Frank Rich's Sunday column was titled "Has a 'Katrina Moment' Arrived?," Obama's assessment had more than a whiff of Bush telling Brownie he was "doing a heck of a job."

Wow. Just wow. Look, let's cool it with the Katrina stuff for starters. But I love how everyone is missing the point with the A.I.G. mess. Why is it that only David Brooks understands this? What is wrong with America? Has the 24 hour news really destroyed our intellectual ability? But wait, this is only going to get better.

My dictionary defines outstanding as "excellent, exceptional, superior to others in the same category."

My dictionary defines condsending as "Arianna Huffington".

So how could Obama say that and then, not a minute later, tell Leno that his administration plans to "open up separate credit lines outside of banks for small businesses" and "set up a securitized market for student loans and auto loans outside of the banking system" in order to "get credit flowing again"?

I don't know Arianna, I don't know how he could say such things. Did she cry when she wrote this sentence? Is it fair to picture Arianna, hair messy, mascarra streaking down her cheeks, saying out loud "How could you Barack! HOW COULD YOU???"

Back in January, after the Senate voted to release the second $350 billion tranche of TARP money, Obama had told the nation that he was "gratified" he'd been given the authority to "maintain the flow of credit to families and businesses."

Now, here he was, just over two months later, basically admitting that we have to find other ways to "maintain the flow of credit to families and businesses" -- completely contradicting a central tenet of the bank bailout, expressed by Axelrod in January when he told George Stephanopoulos that the president was "going to have a strong message for the bankers. We want to see credit flowing again. We don't want them to sit on any money that they get from taxpayers... And we have to make sure that the money doesn't go to excessive CEO pay and dividends when it should be going to lending."

Then Geithner happened. According to the Times, during the internal debate the Treasury Secretary "resisted those who wanted to dictate how banks would spend their rescue money." And we see how well that turned out.

Wait, Geithner was the only guy saying that the government shouldn't tell the banks how to spend their money? Isn't this the real story here? But that aside, let me say this, and I'm only going to say it once: life is not a fairy tail. I'm sure Obama, like everyone else in this country, hoped that the banks would lend out the TARP money. But then a little thing I like to call reality set in (and yes, I know I said that already, but the ObamaHeads need to hear that word a lot). Reality said this: The Banks are Screwed and need to balance out their sheets. When banks don't have a balanced bank sheet, they can't lend money. And yeah, it sucks. It stinks. It's too bad that we can't go into a bank and say, "Hey banker, don't you think I need $50,000 bucks to buy flat screen TVs and new jackets and a vacation to Disney World?" But those days are Ovar. Because banks don't have money. And this might actually be a good thing since the United States as a whole was completely and totally out of it's collective mind from 2003-2008. Cheap money is gone. That's okay. That's good.

The AIG bonus backlash is the first serious threat to the Obama administration. It has created an opening that allows conservatives to storm the populist barricades, suddenly acting like the second coming of Huey Long or Upton Sinclair.

Don't you love it when populists, conservatives, and Huey Long are all used in the same sentence? Should we tell Arianna that Huey Long was more leftist and less conservative? Should we tell her that the conservative moment is lost in the woods? Should we tell her the last conservative populist was George W. Bush?

Shameless opportunists like Mitch McConnell, Richard Shelby, and Eric Cantor, who have all argued against limiting executive pay and bonuses, are now positioning themselves in front of the populist parade, railing against AIG and pointing the finger at Obama for allowing this to happen on his watch.

Notice the non-ironic tone she's using with "shameless opportunists".

But the issue isn't Geithner's delivery, it's what he's delivering: an approach to the crisis that is as toxic as the assets that have hamstrung the economy. Geithner, brilliant and hardworking though he is, is trapped within a Wall Street-centric view of the world and seems incapable of escaping.

She does know that at this point this is a banking and financial crisis and having a guy who is stuck in Wall Street mode isn't a bad thing right?

That's why every proposal he comes up with is déjà vu all over again -- a remixed variation on the same tried-and-failed let-the-bankers-work-it-out approach championed by his predecessor, Hank Paulson. For Paul Krugman, this "insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won't notice? That is, are they stupid, or do they think we're stupid?"

It's official, we are in Blame anyone but Obama mode! Anyone but Obama! Tim Geithner is from Wall Street! Blame him! Anyone but Obama! Chris Dodd, you're an idiot asshole! Anyone but Obama!

I don't believe Geithner thinks we're stupid (although he almost certainly doesn't think we're as smart as he is). He just can't change who he is: a creature of Wall Street, habitually sympathetic to the people at the top of the financial system, who he clearly thinks were born to run the world.

Geithner's actions throughout his career are proof that the toxic thinking that got us into this mess is part of his DNA.

Okay, seriously. What. The. Fuck. Tim Geighner was the head of the Fed of New York. He worked for a consulting firm in DC. He worked for the Treasury Department. He worked for the IMF. He did not work for a Wall Street bank or firm.

While President of the New York Fed, he eliminated two key regulatory measures -- a quarterly risk report and a ban on major acquisitions -- that may have prevented (or at least lessened the impact of) the unraveling of Citigroup, which his office was responsible for supervising. Then, together with Hank Paulson, he was instrumental in the original bailout of AIG and the creation of the TARP plan. And he was a key player in the decision to let Lehman Brothers fail.

Look, Arianna knows nothing about what's going on. I don't know all that much. But I can tell you one thing: We need banks. These guys are a lot smarter than you or me when it comes to this stuff. So to have Arianna Huffington second guess the moves by these guys is sort of like any of us second guessing the placement of the bridge in a Beatles song. It's stupid.

And maybe Arianna missed the whole "HOLY FUCKING SHIT THE SKY IS FALLING" moment back in late September and early October when the credit markets totally stopped, the commercial paper market froze and the financial world was at DEFCON 5. But do you know why that is? Because Lehman failed. People got scared and they freaked. Well guess what? A.I.G. is bigger and even more important. If they fail it's gonna be Medieval Times for everyone (hyperbole).

Arianna writes some more stupid shit, but honestly... I can't do this any more. It's over. I can't take the bashing of anyone but Obama. I can't take the Obama can do no wrong BS. I can't take blaming Tim Geithner when he's dealing with half a deck of cards. I can't take Arianna talking about economics when it's clear that she has no clue what's she is talking about. I can't do this any more.

I'm breaking up with Arianna.

Thursday, March 19, 2009

Why do airlines charge passengers to check bags?

I know the country is gripped with the biggest wave of Populism since the early 20th century, but I'm sitting in the Atlanta airport half pissed off because I had to check my bag. It's a backpack, and there was nothing that I needed in the bag for the next leg of my journey (ATL to DC). HOWEVER, backpacks should not have to be checked. They're small and flexible. But since I was one of the last people on the plane, there was no room in the cabin above the seats... and my bag is somewhere in Atlanta.

Enough of my bitching... let's get to the point. Why do airlines charge for passengers checking bags? It seems to me that it would make more sense for airlines to charge for any bag that is not checked. The reasoning is simple.

Airlines can cut costs if they turn the plane around quickly. This cuts down on all sorts of costs--the faster an airline can get the people off the plane, do a quick clean, and then get the next group of passengers on the plane allows them to fly more flights with the same plane, which could possibly eliminate airplanes entirely.

But when passengers bring bags--especially those hard cover, one person weekend getaway type rollers--on to the plane, they store them in the overhead. And it takes forever for people to get those things into the overhead bins and it takes them even longer to get them down and off the plane. Don't believe me? Fly on an international flight sometime. On those flights it seems like they can unload a Boeing 777 or 747 in about five minutes. Yet a Boeing 737 takes about ten minutes to unload.

But airlines give passengers every incentive in the world to not check their bags. Wouldn't airlines be better off to have passengers waiting for their bags at a claim then to have hundreds of people waiting either on the plate or at the gate? Why not charge passages five bucks for ever hard covered, rolling bag? Sure passangers are going to complain because the airline "always loses their bag" (simply not true). Really they're just upset about waiting for their bags (yet anyone who's sat in the bag of a plane knows, by the time one gets off the back of a plane and walks to the baggage claim the bags are there).

It would be a simple system. If you have a bag that is 12" by 24" (or 14" by 28" whatever it is), you can check your bag for free or pay a five dollar fee. If the airline loses your bag, you can claim ten bucks for the inconvenience (and honestly, they could give you twenty bucks because not that many bags are lost so they'd easily make the $20 from people paying to not check their bags). Planes deboard and board quicker... everyone wins. Save the white business guy who is on his cell phone the up until the second the plane takes off. You know that guy. He probably sells insurance. And he isn't that big of a deal because he's sitting coach. But he wants you to think he is. [Editor's note, TPB went on for about 100 words more, but I cut that; END]

Friday, March 13, 2009

Reflections of/the way life used to be

Something caught my eye the other day when President Obama signed the $410 billion spending bill. Obama signed the bill BUT included a signing statement. No big deal right? Overall, yeah. Who cares. A signing statement is basically the President saying, 'this is what I would have done if I was dictator and I may or may not enforce that part of the bill'. It really doesn't effect or change anything. But it exists. He can do it.

And boy-oh-boy did George W. Bush do it. Bush issued a staggering 1,200 signing statements. That's right, on over 1,200 of the bills W signed, he added his own personal opinion on each one! And you guessed it, the Democrats didn't like it! Including Sen. Obama!

So yeah, like anyone who cares about these things I was bummed out:

At the same time, after Democrats criticized former President George W. Bush's signing statements, Mr. Obama issued one of his own, declaring five provisions in the spending bill to be unconstitutional and nonbinding, including one aimed at preventing punishment of whistleblowers.

Presidents have employed signing statements to reject provisions of a bill without vetoing the entire legislation. Democrats and some Republicans have complained that Mr. Bush abused such statements by declaring that he would ignore congressional intent on more than 1,200 sections of bills, easily a record. Mr. Obama has ordered a review of his predecessor's signing statements and said he would rein in the practice.

Sure, Obama has about 1,199 signing statements to go before he catches up with Bush, but that isn't really the point. And while Obama was wise enough not to say never, the Obama Presidency has a feeling, fifty days in, that it's going to do some of the same things that W did.

And that's the real tragedy here (if you want to call it that). We can't go back. Well, we won't go back. Bush used signing statements. Therefore it's here to stay. For the rest of our lives, Presidents are going to issue signing statements like it's no one's business. That means the President from here on out isn't going to enforce the laws that Congress makes, he/she is going to pick and choose which laws he/she wants to enforce.

Just like George W. Bush.

I think that's what so many people don't realize about the Bush Presidency. He went places that no President had ever dared to go... and was never ever reigned in for such attempts. When Truman attempted to seize the steel industry, he was rebuffed. When Nixon refused to hand over the tapes, the Supreme Court stepped in. Their attempts to expand the President's powers were at least resisted.

But with W, that was almost never the case. Congress, who has been letting the President get away with more and more over the last seventy years, didn't even bother to stop Bush until the Democrats took over in 2007. But by then, it didn't matter? Bush had expanded the authority and power of the President.

And this is what I never ever understood about Obama's Change message... change what? He is really going to give up the powers that W had taken?

That was (and is) always going to be Obama's greatest struggle (after the economy) once he became President. Does he have the character to return some of the powers that aren't explicitly granted to him in the U.S. Constitution which Bush had taken? Would he return the civil liberties? Would he be less secretive?

So far? The answer is mixed. It is apparent that he is going to try and have a more open Presidency with more transparency and is less secretive. But he's already issuing signing statements. He's spending like Bush yet other than letting W's tax cuts for the rich expire, there are no plans to raise revenue.

I was cautiously optimistic about Obama back in November and December. I'm downgrading. I'm now neutral. I don't regret my support but I also believed that Obama had the character to resist the temptation of power...

It's early and things can change. But early returns seem like change isn't coming all that soon.

Tuesday, March 10, 2009

Chicago now just as expensive as New York

I find it hard to believe, but the Economist says so:
On the other hand, the strengths of the dollar and the yen have made American and Japanese cities comparatively more expensive in the last five months. This accounts for Tokyo's rise to the top of the ranking and Osaka's surge to second place. But despite the fall of the euro, Western Europe still dominates the table and supplies seven of the top ten cities. Chicago, Los Angeles and New York are the dearest American cities, in joint 23rd position.
I've always noticed New York (at least Manhattan) to be outrageously over priced. And after five years in DC, I found Chicago thankfully cheap (of course I was using the beer and McDonald's index). So I'm shocked to see that Boston and D.C. are not on the list.

Tokyo is the most expensive city now. There just isn't any good news coming out of Japan, eh?