Baseball, Nebraska, Politics, Wall Street

Margin Call

Posted on by christian

We Never Learn

One particularly chilling scene in the outstanding new film Margin Call takes place when the CEO of a big banking house, played with cool detachment by Jeremy Irons, recounts the cyclical nature of the financial markets. As he ticks off the years when markets have tanked, including 1929, he calmly suggests it is just the way things work in the rarefied world of high, high finance. The biggest, toughest, most ruthless survive, he says.  It’s just the way the world works.

The movie, featuring a terrific cast including Kevin Spacey and Demi Moore, is an examination of one day in the life of a big Wall Street firm that finally must come to grips with its reckless speculation in the type of complicated financial instruments that even the big boss doesn’t understand. (In another great scene, the CEO interrupts a junior risk analyst to tell him that he doesn’t understand this esoteric, but widely profitable financial stuff, but to explain it so he can.)

In the end, the firm decides to unload its entire cache of toxic assets as fast as possible, settling for pennies on the dollar in order to save the firm and peddle, as Spacey’s character says, goods that they know are absolutely worthless. We are left to believe that the firm does survive, because as Irons’ character says at one point, there are three ways to make money in his business: be first, be smarter or cheat. He convinces himself that he is being first and smart – dumping the toxic investments before the markets wise up – but, of course, he is really cheating. We last see the self assured, but completely unself aware CEO lunching alone, enjoying undoubtedly an expensive bottle of wine, in the Executive Dining Room.

Lehman Brothers wasn’t so lucky. Writing in The New Yorker, film critic David Denby said Margin Call is the best film ever made about Wall Street. And Jake Bernstein, a reporter who won the Pulitzer Prize for exposing Wall Street practices that helped fuel the current economic mess, says the filmmaker J.C  Chandor actually doesn’t tell as corrupt a story as played out in real life. Bernstein does note that the CEO character in the film is named Tuld. Lehman’s CEO was Dick Fuld, a man that TIME has suggested should be remembered as one to blame for the current mess.

Chandor is “mining deeper truths than the intricacies of credit default swaps,” Bernstein wrote in a review of the film. “The societal costs of high finance, the power of self-rationalization, and the easy embrace of personal corruption is his terrain.”

Margin Call gets high marks not only for the superb cast and believable script, but, as Bernstein suggests, for the larger points it makes, including that the people who work on Wall Street, at least most of them, are decent, striving, ambitious and incredibly competitive. All the stuff of success in business. What is missing is any sense of proportion; any real self reflection. These folks convince themselves that what they do and how they do it is necessary and that they are worth the million dollar bonuses that they are promised for deceiving their customers. This lack of self awareness is at the center of the film and at the heart of the continuing utilization of massive Wall Street salaries and bonuses derived from essentially creating nothing but a market for investment vehicles even the CEO’s don’t understand.

Also near the heart of the Wall Street-inspired economic crisis that is soon to extend into its fifth year are two elements that history has repeatedly shown are always at the core of a crisis of capitalism: vast money and vast inattention; inattention by both the financial players benefitting from the “system” and the sleepy regulators who always seem a day late. In the end unbelievable risk is tolerated long past the point of reason and ethics and personal values are corrupted because the money is so incredibly appealing. And, as one character in the film notes, the firm should be able to dump its steamy mass of worthless, well, investments because the “feds” won’t wake up until it’s too late to act.  This level of inattention really is art imitating life.

The Hollywood press is abuzz with the notion that the Occupy movement will push Margin Call into serious Academy Award contention. Maybe. Hollywood is often as clueless about the real America as Wall Street, still as Denby wrote, “If Wall Street executives find themselves at a loss to understand what the protesters outside are getting at, they could do worse than watch this movie for a few clues. “

I came away from watching Margin Call thinking again that of the many, many tragedies in the current economic meltdown the one with potentially the most lasting consequence has been the abject failure of the current political class to explain what really happened, why it happened and to hold anyone accountable. Already what “reforms” were put in place in the wake of the Lehman collapse, the TARP bailout, etc. are having their hard edges sanded away. Gretchen Morgenson, another of the journalists who understands more about the ways of Wall Street than most members of Congress, reports, for example, that efforts to create greater transparency in the shadowy derivatives market are currently under attack in Washington. In other words, the people who helped bring about the current economic meltdown are resisting efforts to change their behavior. Self reflection works about as well on Wall Street as self policing.

“Wall Street,” Morgenson observes, “loves to do business in the shadows. Sunshine, after all, is bad for profits.” She quotes the great Wall Street investigator of the 1930’s, Ferdinand Pecora, as saying that then, as now, pitch darkness was the bankers’ stoutest ally.

Here is the real and lasting threat of the real life margin call we continjue to deal with every day: No real and comprehensive Congressional investigations have been done. No candidate for president – in either party – has offered a coherent explanation about what happened in 2008 and earlier. Americans across the specturm from the Tea Party to Occupy Wall Street are mad, and for some good reason, but not out of any comprehensive factual notion of what they should be mad about. Our political system has not, perhaps because of its own vested interest in the essential status quo, offered taxpayers and investors of the nation the explanation that is needed in order to try and correct a system that still presents tremendous risk to the national and world economy.

When members of Congress can speculate and personally benefit from insider information as CBS recently reported several members, including the House Speaker and Minority Leader, have there isn’t much Congressional incentive to crack down on the many, many abuses on Wall Street and in the financial markets.

So, we have once again set ourselves up to experience the obvious consequences of the cyclical nature of the way markets work. What goes up must come down. To the buyer beware. The markets self correct, even if there is a tad bit of economic dislocation associated with the correction. This hard time too will pass, as the Jeremy Irons character says in the movie, and we will go back to making money – by being first, being smarter or cheating. The old ways of money and inattention win again and always.

 

Thanksgiving

Thanksgiving

Posted on by christian

The Year the Johnson’s Integrated Thanksgiving

Note: Happy Thanksgiving to all of you. I’m re-posting a Thanksgiving piece from several years ago about a very memorable day from my long ago youth. Hope you enjoy it …  and a great holiday. Thanks for reading. 

———-

Thanksgiving has always been my favorite holiday; the most American of celebrations dating back, officially at least, to Lincoln and the dark days of the Civil War. It has always meant connection for me – with family, friends, traditions and a profound sense that some of us, the lucky ones, truly are blessed with much to be genuinely thankful for.

I have enduring memories, no doubt ripened over time, of Thanksgivings past. There was the year my Aunt Vera couldn’t quite get the turkey cooked, while my mother – she who knew how to roast a bird – quietly steamed, and not just the brussels sprouts, either.

Mom was like I expect many women of her generation, a great cook of basic good things. No lumps in her mashed potatoes – ever. The gravy, she insisted, must be cooked – slowly. Pumpkin pie filling was eased into a crust made by hand. The dressing never came from a box. Mom wouldn’t have known a tortellini from a duck breast, but she knew how to make a traditional Thanksgiving dinner.

My father, never much of a hand in the kitchen, would marvel as we set down to the feast that Mom, with little more preparation than a  high school home ec course under her apron, could make it all come out just right and perfectly timed. No undercooked birds in the Johnson household. And she loved the compliments and, yes, fished for them. “Is the turkey moist enough?” she would ask just to be re-assured that the old bird was indeed just right.

“How about some more of everything?” she would suggest and often we would pass the platters again. She was the “Empress of Thanksgiving,” completely in command of her kitchen/dining room empire.

Poor Aunt Vera. Mom cut her no slack and I don’t believe we ever had Thanksgiving at her house again.

By the middle 1960’s, we had moved far from family in Nebraska to the isolated outpost of Rock Springs, Wyoming. (Of the many places I’ve lived, Rock Springs is the only town that consistently draws a knowing chuckle. Let’s just say that Rock Springs will never be confused with, say, Sun Valley, Idaho or Bozeman, Montana. Think west Texas with about as much charm.)

I was in junior high school in Rock Springs, the new kid in town with little by way of friends and with even fewer of the social skills that make some teenagers instantly popular with their crowd. Friends were yet to be made and Thanksgiving break that year was just an extra long weekend. What I did possess was a Gail Goodrich autographed model basketball and an abiding love of the game I was trying – slow of foot and short of stature – to master.

Thanksgiving wasn’t on my mind, basketball was. We weren’t going to travel to be with family, so I figured, weather permitting and with little else to do, I’d shoot a few hoops in a school playground after the turkey had been served.

A couple of days before Thanksgiving, Dad brought home news that he’d been asked by a friend at the local community college whether the Johnson’s might be willing to put an extra leaf in the dining room table and roast a slightly larger turkey in order to host two young men from the Western Wyoming Community College basketball squad. Mom, never one to shy from cooking for two or twenty, immediately said yes. I didn’t know what to think.

Welcoming total strangers to the Thanksgiving table was something we had just never done. I’m sure Mom prepared the turkey just as well as she always did. Knowing her she wanted to impress the college boys with the breast meat moist, the drumsticks savory, the mashed potatoes creamy and the gravy rich and hot. The pies were delicious, I’m sure. Frankly I don’t remember. What I do remember were the two big guys, really big guys, who showed up for dinner that Thanksgiving in windy Rock Springs.

Bill Davis was, as I recall, a rather skinny, 6 foot 8 inch post man with slick and quick moves around the basket. Donald Russell was a brawny, but quick 6 foot 2 inch shooting guard who bore a remarkable resemblance to his more famous older brother, Cazzie, the great University of Michigan and National Basketball Association star.

Basketball great Cazzie Russell

(These memories of the long-ago Wyoming Thanksgiving came rushing back when I read recently the happy news that the great Cazzie Russell had been inducted into the College Basketball Hall of Fame. He deserves to be there. In jogging my memory of Russell and his brother, I stumbled across a piece written about Russell about this time. He was a great basketball player and is a good man.)

These basketball playing, turkey eating, very big young men towered over my Dad who was all of 5 foot 6. I remember Mom apologizing that the long legs didn’t fit very well under our modest dining room table. I was in awe. College basketball players at our Thanksgiving table. I don’t recall being smart enough enough to ask the questions I would have liked to ask or confident enough to make the conversation I now wish I could have experienced. I was focused on basketball and the novelty of these two guys at our table.

I wonder now what two, rather quiet, even bashful, young African-American men must have thought of our very traditional, Nebraska-inspired menu and ritual? Did they humor us because they had been told to have Thanksgiving dinner with total strangers? They must have missed home and family and we must have been a poor and unfamiliar substitute. They ate well with their long legs under Mom’s table, but was it good food without genuine comfort? What did they really think of us? What did they think of Rock Springs? What did they think of the awkward kid?

I’m going to guess, this part of memory is truly fleeting, that the year the Johnson’s integrated Thanksgiving was 1966. Black Power had entered the national vocabulary in 1966. A half million Americans were in Vietnam. Indira Gandhi became Prime Minister of India, Star Trek premiered and A Man for All Seasons hit the big screen.

Bill Davis and Don Russell came to your house on an important day and, in some small but profoundly important way, I grew up over Thanksgiving dinner. No one would say that my Mom and Dad were pacesetters when it came to race relations, but the fact that my conservative, buttoned down father brought those two guys to our dinner table and Mom fed them the best things she could make left an enduring mark on my heart. It was a truly memorable Thanksgiving.

Bill Davis went on to a pretty decent college career at the University of Arizona and was drafted in the 12th round by the NBA Phoenix Suns in 1968. Don Russell played a little ball for the Wyoming Cowboys, I believe. I watched both young men play several games that season for the local community college and followed them by reading the box scores in the Daily Rocket Miner. I’d had dinner with them, after all. Bill and Don seemed like friends after that Thanksgiving.

Many things to be thankful for this year, including the memory of Thanksgivings past, including one particularly memorable dinner for five in Rock Springs, Wyoming in 1966.

 

Arizona, Church

Winter in the Desert

Posted on by christian

Beyond the Beltway

It can be difficult – maybe even impossible – to think worried thoughts about the failure of the Super Committee, the Greek debt crisis or Newt Gingrich’s rise in the polls when you spend a day experiencing winter’s return to the Sonoran Desert near Tucson. Of course winter in the Arizona desert means a high above 70 degrees, high blue sky, a sunset so wild and colorful that you think Jackson Pollock must have inspired it and a cool evening that requires that a sweater replace your tee shirt.

The baseball Cardinals rule their world, the Arizona football version struggles with a 3-7 record just up the road in Phoenix, but the spectacular northern Cardinal rules the roost hereabouts. The brilliant red fellows perch and preen in a mesquite tree looking for all the world like a super model on a Milan runway. I’m guessing the birds, all duded up in crimson, are less demanding than a skinny teenager wearing Dolce and Gabbana. The bird also puts an exclamation point on what is truly beautiful in a world that all too often seems contrived and phony. Nothing phony about a Cardinal sighting on a sunny day in the desert.

We’re also welcoming back to Arizona the hummingbirds that I choose to believe spend their summers in Idaho. They’ll winter in Arizona like so many snowbirds from Wisconsin and Alberta, and when the days become too hot in the spring they’ll rev up those little engines and head for cooler climes. Today they find the desert just about perfect.

The natural cycles of nature, the birds coming and going, the weather changing and challenging us can slip by without our notice, but they shouldn’t. The cycles can refresh and restore. The birds can inspire with their beauty and independence. The desert seems almost dormant in late November; buttoned down for the cool weather, but not if you watch and listen. The sounds and sights are magic. It’s enough to give you hope that humans can adapt and change, too.

In a season of Thanksgiving, I’ll try hard to set aside the cynical that seems to dominate too many of our days and relish for at least a few hours the magical. Winter is coming to the desert and it renews and inspires. It’s a lot to be thankful for.

 

Baseball, Federal Budget, Immigration, Politics

No Surprise Here

Posted on by christian

Super Committee Fails, Country Burns

At its birthing the Super Committee seemed to have it all – bi-partisan endorsement from both houses of Congress, senior and generally respected bi-partisan leaders, a sense of urgency and a hopeful nation, if not exactly hanging on its every move, at least positioned to accept its verdict.

As was probably all too predictable, it came to ashes. No one – Democrat or Republican – was willing to risk the wrath of the most unreasonable in their party. The entire idea of a Super Committee was badly flawed, possibly even unconstitutional, but what to expect from a Congress that can only think as far ahead as the next CNN debate or next week’s Sunday talking head shows?

It hasn’t always been so. In the spring of 1964 it seemed to many observers utterly impossible that the United States Senate, still dominated by southern conservatives who held key committee positions, could possibly join the House of Representatives and pass a civil rights bill. But, in 1964, the U.S. Senate had real leaders: Mike Mansfield of Montana for the Democrats and Everett McKinley Dirksen of Illinois for the Republicans. Utilizing his mastery of Senate rules, Mansfield first prevented the civil rights bill, a legislative priority of President Lyndon Johnson, from being referred to the southern-dominated Judiciary Committee where the wily former copper mucker from Butte knew that it would die a quiet death.

With the bill on the Senate floor for consideration – and filibuster – Mansfield patiently puffed on his pipe, let the Senate work it’s will and effectively involved his Republican counterpart in every step of strategy. By the time the bill passed after a 54 day talkfest, Dirksen thought the whole thing had been his idea. Mansfield used quiet persuasion, senatorial courtesy, time and history to pass the bill with 73 “yes” votes.

Mansfield’s aides objected that their boss had let Dirksen have too much of the credit, even going so far as to – perish the thought in today’s Washington – walk to Dirksen’s office for meetings and press availabilities. Dirksen made the daily comments to the press. Dirksen was quoted. Dirksen was engineering the strategy. Or so it seemed. Mansfield even stood in the back when LBJ signed the landmark legislation in order to stay out of the celebratory photographs. The great Senate leader explained to his staff that he needed Dirksen more than he needed the publicity. That is how history used to be made, at least once in a while, in the United States Senate.

It has been the good fortune of the United States of America when faced with moments of great challenge, indeed even peril, to have emerge from our messy politics the right leader at the right time. Would independence have come in the first place without a Washington? Would the Union have survived without a Jackson and a Lincoln? Would a Great Depression and a world war been wiped without a Roosevelt? The times we face are hardly as tough as the Civil War or waging World War II, but the lack of real leadership –  leadership in the broad public interest –  has rarely seemed as lacking as it does today.

A real test of leadership – political or otherwise – is to have the courage to go against the dominate direction, especially the dominate direction of your friends. Some would argue that the folks on the Super Committee never had a chance since the Congress is such a toxic place and the influence of those with single and very special agendas so dominate our politics. Maybe. Then again, if you go back over the record of the last several months of effort to craft a budget and debt deal, you’ll find that neither side really tried to get a deal. The talking points were so predictable, so scripted, that this show might as well have followed the Kardashians on reality TV.

As Politico’s Mike Allen noted on Sunday, the last time the Supers met as a committee was on November 1st! Allen, who admits he was initially optimistic, as I was, that the group would find some common ground, now concludes the whole thing was a bit of a sham.

The deficit remains. The nation’s fiscal house is not only not in order, but remains in a seriously fragile state. All political eyes, meanwhile, are singlemindedly fixed on 2012 and how to carve the narrowest possible advantage from the politics of the moment. Yet a serious sense remains that the broad middle of the country is truly ready for serious leadership; leadership that takes risks, makes decisions, talks truth to the fringes of both parties and compromises with the other side.

Is that person – persons – out there? Let’s hope so. The nation yearns for the kind of leadership Mike Mansfield and Everett Dirksen once provided. We need it again.

 

Books, Football

Penn State

Posted on by christian

Where to Begin

There is an old story about the very last in a long, long list of speakers at one of those interminable political dinners that go on and on into the wee hours. This last guy finally gets his chance to stand before the crowd and all he can think to say is that “everything that can be said has been said, it’s just that not everyone has said it.”

I feel that way about the Penn State scandal. It seems like this story, and the commentary about it, has been with us for a year rather than a little more than a week. Maybe it’s all been said, but here goes.

There is much tragedy here; indeed almost Shakespearean in its scope. The young men abused and likely marked for life by their ordeal. The legendary coach brought low because of his inattention or something worse. The public institution in the glare of intense national attention struggling to right itself. The appalling violence by students reacting to the news that Coach Joe Paterno had been sacked. The palpable sense that Paterno stayed too long and could have with a few words and even fewer actions taken greater responsibility or perhaps have even prevented a tragedy.

American football fans – and I’m one, occasionally – love the mythology of the college game. “Student-athletes” giving their all for old State U, the stern college coach – think Rockne or Bryant – giving the inspirational half-time speech, the cheerleaders, the spectacle, the perfect Saturday afternoon in the fall. But, increasingly those myths seem like shiny Hollywood gloss on the NCAA football story. The historian Taylor Branch’s recent investigation of college football highlights many of the problems and in light of the Penn State story deserves to be read as a forecast of more troubles to come.

The lessons from the Penn State story are many and none very good. It’s said that Paterno, the Ivy Leaguer, with his decades of football success, helped drag Penn State from a dumpy state school to a legitimate research university. That might even be true, but it begs the question of just what events emanating from Happy Valley over the last 10 days have anything to do with higher education?

College football at the Penn State level is pure and simple about the money. Paterno’s program earns $50 million annually for the college. Joe Pa is Penn State football and he rode the juggernaut all the way to a grand jury.

Seems to me the key thing to watch in the next few days is whether fundamentally anything changes at Penn State – or elsewhere in college football – as a result of the child abuse scandal. Great universities are supposed to be places of exploration, discovery, renewal and reflection. Time is wasting on any and all of that at Penn State. In this case, actions really will speak louder than words.

A real statement of Penn State’s values would have been to dedicate the revenue from the school’s last three games to a child abuse prevention or counseling program. The school could announce today, as Joe Nocera and others have suggested, that it won’t participate in a bowl or championship game this year and then cancel the entire 2012 season in order to review – top to bottom, side to side – what it wants from its intercollegiate sports programs.

If Penn State wants to reclaim it “core values” as its acting president has said over and over again, then it needs to stop, assess, look back and reflect.

Ultimately a former assistant coach will likely be held to account for his alleged crimes, but a higher education institution built on a foundation of the myths of the college game must do more, much more, to reclaim its soul.

Don’t hold your breath.

 

Christie, Economy

What Does It Mean

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Mindless Protest…or Something More

What to make of the “occupy” protests?

Is it the fad of the moment; the “trust fund” demographic playing at protest against the consumer and corporate culture they quietly and passionately embrace? It can be hard to be credible as part of the 99% while sipping a double macchiato from Starbucks and resist the autumn breeze in your Patagonia fleece.

On the other hand, it’s hard to warm to a Treasury Secretary in a Democratic administration who hasn’t always paid his taxes and seems intent on insulating Wall Street from real scrutiny and real reform. Beyond sullying parks from New York to Portland, we must credit the 99% with raising the issue of income disparity to the national conversation.

But what to make of a “movement” with no goals and no leader? Maybe it’s just mindless anger addressed toward a political and business culture that seems more and more remote from the daily existence of many Americans or it may just be – may just be – the vanguard of a new progressive movement; the type of which has always come in our history on the heels of capitalism behaving badly.

Three examples, all in the news in the last two weeks, that should take even the cozy and comfortable down to the occupied zone.

Former New Jersey Senator and Gov. Jon Corzine’s political afterlife found him settling in at a “futures brokerage firm” that recently declared bankruptcy after it was disclosed that $633 million of the firm’s client’s money had gone missing. I can understand accidentally dropping a $20 bill, but $633 million? More than 1,000 employees of MF Global were cut loose on Friday. Corzine, a Democrat who once ran Goldman Sachs, obviously knows both the ways of Wall Street and Capitol Hill. He may soon know the ways of a federal crossbar hotel.

As Robert Mintz reported in The Guardian, the MF Global meltdown is most likely another example of an inadequate regulatory system that failed to assess the risks that greed will run.

“One of the hallmarks of the financial crisis was the degree to which firms became so highly leveraged that a run on the bank became almost inevitable,” Mintz wrote. “The level that MF Global was permitted to leverage itself should have raised red flags, but didn’t.”

Greed has also been batting clean-up in the epic demise of the one-time blue chip franchise that used to be the Los Angeles Dodgers. Like the Corzine caper, Frank McCourt’s looting of the Dodgers has yet to be fully documented, but it seems pretty clear he turned the team’s cash drawer into a personal slush fund. McCourt will eventually lose his team, Dodger fans will undoubtedly lose another season and the sleazy owner will walk. Being greedy is rarely a crime, apparently.

That brings us to Nancy Pelosi. The House minority leader and former Speaker of the House has some explaining to do today after a truly devastating piece last night on the CBS broadcast 60 Minutes. Correspondent Steve Kroft, reminding us of the old Mike Wallace, asked Pelosi how she could justify having what is in effect insider stock information that allowed her and her husband to benefit handsomely on an initial public offering. Kroft’s report also examined the benefits of insider information in the hands of current Speaker John Boehner and House Financial Service Chairman Spencer Bachus.

None of the lawmakers, of course, sat for an interview to explain themselves, but the bumbling answer Pelosi gave when Kroft confronted her during a news conference was a classic of the “I don’t know what you’re talking about, but you must be wrong” variety. The lawmaker’s ultimate defense, again of course, is that the insider information members of Congress have access to, and can trade upon, is not illegal. It’s just wrong.

It can be difficult to see a popular uprising as it unfolds. It took us a while to catch on to the Arab Spring. When the end came, the Soviet Union collapsed much faster than anyone could have predicted. The backlash against the greed and excess of the Gilded Age of the 1890’s unfolded over more than a decade through the administrations of three presidents – Theodore Roosevelt, Taft and Wilson. The raw speculation and lack of regulation in the 1920’s ushered in the regulatory reforms of the New Deal.

We’re still sorting out – and will be for a long time – the real consequences of the financial and housing meltdown of 2008. I’m not sure I completely agree with those, like Columbia economist Jeffrey Sachs, who contend we are on the cusp of a new progressive era that will, as Sachs wrote Sunday in the New York Times, will usher in an age of renewal.

I also don’t know if the Occupy crowd watches 60 Minutes or cares a fig about the future of the Dodgers, and I don’t have a clue as to whether they have any substance to offer to the national debate, but they do seem to have identified simple and time-honored truths – greed is not good and a modern representative democracy will not function well when those in positions of real power behave so very badly.

In another context, I’m reminded of the famous words of the lawyer who finally put Sen. Joe McCarthy in his place. Joseph Welch, with guts and eloquence, glared at McCarthy during the famous televised hearings and asked, “Senator. You’ve done enough. Have you no sense of decency, sir? At long last, have you left no sense of decency?”

A good question for Corzine, McCourt, Pelosi, et al. Indeed, they have no sense of decency.

 

Baseball, Federal Budget, Immigration, Politics

Super Committee

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Turkey and Dressing

You thought perhaps that Thanksgiving was all about Grandma’s cranberry relish, Aunt Mae’s pumpkin pie and a nap on the sofa while a football game hums in the background. Not this year. The Super Committee, the 12 Senators and Representatives charged with saving the Republic, may finally prove decisively that turkeys can’t fly. The Committee, ceded the authority of the rest of the Congress in order to come up with a deficit, budget and revenue deal, is due to report November 23 just in time to spoil the real turkey day. Gobble, gobble.

Senior lawmakers are already predicting failure for the scheme that was hatched as part of the dubious deal earlier this year to raise the debt ceiling. It looks like the Gang of Twelve won’t fare any better than the other 523 members of Congress in crafting a sensible, bipartisan plan to control federal spending without destroying the still fragile U.S. economy.

Give some serious credit to guys like Idaho’s Mike Simpson and North Carolina’s Heath Shuler for seeming to buck their leadership while calling for the Super Committee to “go big” with a plan that will actually accomplish something for the long term. Simpson and Shuler are signers, along with 98 other bipartisan House members, of a letter to the committee that urges them to be serious about finding middle ground, while leaving – Thanksgiving-style – nothing off the table. No sign the Super Dozen are listening.

As we edge closer to the actual Presidential Election Year, expect to hear more and more references to two other elections in the 20th Century – 1936 and 1984. In both those years, incumbent presidents – Franklin Roosevelt and Ronald Reagan – were facing re-election hampered by high unemployment  and a sluggish economy. Both won re-election with historic landslides. (The White House loves this history lesson, you can bet.)

In Roosevelt’s case he squandered his mandate with an ill-consider and historically awful idea about expanding the Supreme Court. Reagan turned his attention to foreign policy. Reagan did little, despite much revisionist history today, to control federal spending. FDR, pushed by his conservative Treasury Secretary Henry Morganthau, got nervous about the growing budget deficits spurred by New Deal spending and he quickly applied the brakes in 1937. The resulting Roosevelt Recession sent unemployment back up and the economy stalled. More agile than any politician today, Roosevelt quickly reversed course and start spending money again to create economic activity.

There is a school of economic thought that holds that the Super Committee would do the economy a favor by failing to concoct a grand plan since any grand plan will ultimately reduce federal spending – think defense – and eliminate many jobs. That may prove to be just the combination of policy solutions that the U.S. economy doesn’t need right now. I’d be happy with almost any plan the Supers deliver before turkey day, because no plan means no certainty, no political direction, more drift and more disillusionment for voters.

Even Greece – Greece? – has found a way to create a new coalition government aimed at addressing that country’s severe fiscal and budget challenges. Enjoy the turkey this year and be thankful for any abundance, but don’t look to Washington for sane and sober thoughts on the future of our economy. Maybe the Super Committee ought to spend Thanksgiving in Athens.

 

2016 Election, Supreme Court

Supreme Power

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Executive-Congressional Powers Square Off

The United States Supreme Court will hear arguments today in a case that has it all for we separation of powers fans. The briefing in the case also features the work of Idaho’s premier Constitutional scholar, Dr. David Adler, the Director of the McClure Center at the University of Idaho.

The case – Zivotofsky v. Clinton – involves questions of presidential power, the authority of Congress to direct the president on issues of foreign policy, the use of “presidential signing statements” made almost routine during the Bush years and a very personal question for 10-year-old Menachem Zivotofsky and his parents – where was he born.

Since 1948, when President Harry Truman recognized the new state of Israel, American presidents have carefully refused to recognize Jerusalem as part of any country. The ancient city, after all, is sacred ground for three great religions. Jews, Muslims and Christians all have a claim to Jerusalem and to keep that issue from clouding the already cloudy issue of an enduring peace in the region, every president since Truman has constructed our foreign policy to reflect the unique nature of Jerusalem.

Congress stepped into the issue in 2002 when it tucked a provision into the Foreign Relations Authorization Act – subsection 214(d) to be precise – that ordered State Department officials to record a U.S. citizen’s place of birth as “Jerusalem, Israel” if the citizen’s legal guardians so request. George W. Bush signed the bill containing subsection 214(d), but also issued one of his frequent “signing statements” saying that as the chief executive responsible for foreign policy he would not enforce the provision.

Ari and Naomi Zivotofsky beg to differ. They are U.S. citizens who live in Israel and maintain dual citizenship. They want their son, Menachem, to have a passport that states, what in their minds is clear; their boy was born in Jerusalem, Israel.

As NPR’s Nina Totenberg reported when she previewed the case: “Jewish natives of Jerusalem, who are proud of being born in Israel, may not, according to the State Department regulations, have Israel on their passports, says lawyer Nathan Lewin, who represents the Zivotofskys. The result is that the passports may only say Jerusalem.”

The Obama State Department, following the same line of argument of the Bush Administration, argues that the case is both beyond Supreme Court review since it’s clearly a “political question” and also encroaches on presidential power. The briefs for the State Department – that’s why Hillary Clinton is named in the case – say that the Constitution assigns to the president a “broad range of foreign affairs powers,” including recognizing foreign nations and accepting the credentials of ambassadors.

Lawyers for the Zivotofskys argue if the issue of Jerusalem’s status is so important to U.S. foreign policy President Bush should have done the Constitutional thing and just vetoed the bill back in 2002. The case is obviously being watched closely by American Jewish groups.

Dave Adler’s work, by the way, is prominently cited in a brief filed in support of the Zivotofskys by the American Association of Jewish Lawyers and Jurists.

This case is fascinating on many levels, including the obvious tension between the powers of a president and the role of the Congress in the making of foreign policy. It’s also a useful reminder that such big questions often involve the real and personal issues of normal folks.

It will also be fascinating to see if the increasingly activist Roberts Court really get to the point of deciding this case on the details. The case only got to the Supreme Court after lower courts ruled the fundamental issues political in nature. In short, those courts told Congress and the president to go figure this out without bringing the fight to the third branch. Now the nine will decide about Menachem Zivotofsky’s passport and potentially so much more.

 

Andrus Center, Baseball

Tony LaRussa

Posted on by christian

Knowing When to Quit

The World Series winning manager was on David Letterman’s show last night – he’s earned a victory lap – talking about his unlikely last season in the dugout and his retirement as manager of the Cardinals. As I listened to the interview, I couldn’t help but reflect on the importance of having the self awareness to know when to hang it up.

There is a lot to be said for going out on top. LaRussa has.

Not everyone liked the PETA-defending, pitcher yanking, bibliophile. David Lengel quotes a friend as saying had he known LaRussa would quit after winning the World Series he would have cheered for him all along. Like him or not, the guy is a winner, as in 5,097 times a winner.

But back to knowing when to hang it up. DiMaggio did it right, Mantle didn’t. The great Willie Mays stayed at least a year too long. And knowing when to quit isn’t just confined to baseball. Newt Gingrich is trying to stretch it out for goodness knows what reason. He did many things poorly, but Lyndon Johnson knew when to quit. Theodore Roosevelt didn’t. Guys like Mike Gravel and Harold Stassen hang around to the point where they become a punchline.

Robert Reich, the former Labor Secretary in the Clinton Administration, quit at the top of his game, a decision he explained in a radio interview a while back. Turns out he really did want to spend more time with his family. How many times have we heard that as the all-purpose excuse for a CEO or politician who has to quit rather than wants to quit.

My mother used to say that every plant needs to be re-potted once in a while. LaRussa is proof of that old truism. Already it’s reported that Jerry Reinsdorf wants to talk to him about a front office job with the White Sox.

Knowing when to quit can also open lots of new doors.

 

 

Baseball, Politics

Prophets Without Honor

Posted on by christian

We Should Make Use of the “Formers”

I have always thought it was a statement of the character, decency and political astuteness of Harry Truman that he developed a genuine working friendship with the former president that Democrats still love to vilify – Herbert Hoover.

The photo is of Truman and Hoover chatting it up in the Oval Office about the time President Truman tapped the former president to head what became known as the Hoover Commission; a vast effort in the late 1940’s to reorganize the Executive Branch of the federal government. When Truman asked Hoover, a man still regarded by many as the do nothing administrator who timidly looked on as the Great Depression ravished the economy in the early 1930’s, to head the commission many regarded it as a very strange choice. It was unusual and also brilliant.

Truman also called upon Hoover at the end of World War II for his advice about food relief for a Europe devastated by war. Hoover had made his reputation as a skilled manager of the massive effort to provide emergency food assistance at the end of World War I.

Both men were sharp tongued partisans. Both suffered by comparison to Franklin Roosevelt. Each had something to prove. They became close friends. By the time Truman left office in 1953, the Executive Branch of the federal government has come to look pretty much as it looks today. Truman, with Hoover’s help, had created the modern Department of Defense, the Joint Chief of Staff, the Central Intelligence Agency and the White House Council of Economic Advisers. Truman needed Republican help to get those jobs done and he was smart enough to seek the help – and political cover – the former Republican president could offer.

This little bit of political trivia begs a question: why don’t we use the talents of “former” political leaders more often? In every other human endeavor, experience – having been there and done that – is considered among the most necessary and desirable characteristics. In politics and public policy, once out of office the “former” typically becomes a relic, a footnote of history. It shouldn’t be so.

Think about some of the national politic figures of the recent past whose experience and judgment would be valuable in some capacity today. Bob Kerrey, the former Nebraska governor and senator, served as a college president. Former Oklahoma governor and senator David Boren runs the University of Oklahoma. He’s has a master’s degree from Oxford and was a Rhodes Scholar. Do you think they might have something to add to the national debate about educational improvement?

President Obama did press former Wyoming Sen. Alan Simpson into service to co-chair a deficit commission and then promptly ignored his recommendations. Simpson ought to be in the Cabinet, regardless who sits in the Oval Office. His recent salty opinions about Obama’s “abrogation of leadership” on the deficit make it certain he won’t be asked for more advice by the current White House resident, but I seriously doubt whether any Republican would call on the lanky guy from Cody, either. He’s too blunt, too outspoken, which is just one of the characteristics that would make him so valuable to any president.

I have never been a great fan of former California governor, senator and San Diego mayor Pete Wilson, but his resume alone should get him on any list of “formers” who could help with something somewhere.

The list could go on and on: former governor like Jim Thompson, Mike Sullivan, Marc Racicot, Mike Dukakis and Tom Kean and former senators like Evan Bayh, Bob Graham, Bill Bradley (perhaps he should be NBA Commissioner), Elizabeth Dole and Gordon Smith would all have something to add as formal or informal advisers to any president of Cabinet secretary.

All of these folks have other lives, of course, in law, lobbying, running policy centers. etc. and some have done the occasional stint on this or that blue ribbon commission. Most would gladly answer the call again, particularly if their work and advice were really taken seriously by current elected officials. Ignoring such talent, expertise and experience is a little like being a high school football coach with a retired Vince Lombardi living down the block and not being smart enough to invite him to practice.

I’ve always thought one of the real and enjoyable powers of being president would be the ability to issue an invitation to anyone, literally anyone in the world, to come to the White House for dinner and a talk. If I had that power for just one day, I’d invite the cast of former political characters I’ve mentioned just to hear their take on the issues of the day, which is pretty much what Truman did with Hoover back in 1945.

As historian Donald McCoy wrote in 1990 in the newsletter of the Truman Presidential Library, the two old, experienced, partisan, but very decent public servants forged a lasting bond.

“During the winter of 1962-1963, two old gentlemen exchanged deeply moving letters,” McCoy wrote. “Herbert Hoover wrote Harry Truman that ‘yours has been a friendship which has reached deeper into my life than you know … When the attack on Pearl Harbor came, I at once supported the President and offered to serve in any useful capacity … However, there was no response … When you came to the White House within a month you opened the door to me to the only profession I knew, public service, and you undid some disgraceful action that had been taken in the prior years. For all this and your friendship, I am deeply grateful.’ Truman replied, ‘You’ll never know how much I appreciated your letter … In fact I was overcome, because you state the situation much better than I could. I’ll quote you, ‘For all this and your friendship, I am deeply grateful.'”

It takes a particular type of political courage – perhaps character is a better word – to ask another politician for advice, particularly advice across the partisan boundary, but a little more of that type of courage would make our politics a whole lot more productive.

For that we would all be deeply grateful.