Celebrating Labor Day With President Hopey-Changey

Now, let's go over all this again, a bit more slowly, so my Democrat friends can understand it.

Mr. Obama told us in January that if Congress didn't pass his 'stimulus package' (i.e. The Mother of All Pork-barrel Bills) that the unemployment rate would exceed 8%, but that if it did, then 'millions of jobs will be created and saved', 'cuz He said so, and He's always right.

So, now here we are: He got His bill, and the interstate highways are shut down coast-to-coast with construction projects of one sort or another(like fences installed in the medians--truly a necessity!), and the unemployment rate is officially 9.7%.

Mish Shedlock shared this graph from the Bureau of Labor Statistics--and the most telling bit is on the bottom row, on the right-hand side. The true unemployment/dropped-out/working part-time out of necessity rate is now approaches 17%.

Wow, that really worked out great!

In defense of Our Fearless Leader, perhaps all this was baked-in before He ascended the throne. But His assertions that everything will just get better if we just spend-spend-spend and trust Him for the outcome erode the basic confidence needed to put a recovery together.

And He wonders why there is such trepidation about handing the country's health care system over to Him?

People have a hard time feeling confident about future risk if they sense they are not being told the truth in the present tense.

In a way, OldSouth hopes The One is lying, 'cuz that means He knows the truth and cynically chooses not to convey it. In that scenario, there is a glimmer of hope.

After all, Saul of Tarsus was struck down on the road to Damascus, and Change We Can Believe in occurred in that instance.

The really scary bit is that He may really really believe His own version of reality...

A Little Peek Ahead

A few posts ago, I passed along some information for Mom, Dad, and Junior about the future of college admissions.

Once again, thanks to Inside Higher Ed, another peek into the future: borrowing for higher ed has spiked 25% in the past year. Which means that the day when the class of 2014 will be able to climb out from under student debt and purchase that first home will be postponed for some years now.

Mom, Dad, Junior: The best use of junior's time on the time/money scale will be spent on making certain academics and selected extra-curriculars(such as classical music study)are in excellent shape. If Junior is out earning cash, every dollar he socks away is a dollar not borrowed for college, i.e. each of those saved teenage dollars looks more like five dollars by the time he's thirty. He may look cool in the new car with the high insurance payments, but he'll need the purchasing power for that new car fifteen years from now.

Another good use of Junior's time will be to visit daily with Mish Shedlock, who patiently explains what is happening to the economy, and what it well may mean for Junior's adulthood.

Hope, Change, Change, Hope...

A big hat-tip to Jr. Deputy Accountant for passing along this from the Washington Post.

The cogent bits include:

J.P. Morgan Chase, an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

A year after the near-collapse of the financial system last September, the federal response has redefined how Americans get mortgages, student loans and other kinds of credit and has made a national spectacle of executive pay. But no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.

Now, let's review: What happens when any structure becomes top-heavy? Is there not a reason aircraft carriers and battleships have wide keels and only travel in deep water?

What happens to a society when too much power is concentrated into too few (and by definition, fallible) hands?

This phenomenon began years ago, to be fair to the current People In Charge. However, it has accelerated dramatically since January 2009.

We have to assume this is their view of the World As It Should Be.

Heaven have mercy on The United States.

To Begin the Week

1. The Julia Project continues with 'Nun Lob, mein Seel, den Herren', a setting of a hymn tune common in Bach's day. I'm struck by how tolerant Bach was of dissonance, how creatively he moved in and out of those dissonant moments.

The theory texts I endured in school had totally sanitized the dissonances out of the process of learning how to harmonize, while still presenting the material as if it were based upon Bach. No wonder I slept through class!

I browsed through the theory text of a college freshman last week, and nothing has changed about the American approach to theory teaching. Dry, pedantic, and unconnected to the rich realities of Western music. Your tax dollars, once again, at work on campus. Multiply this example by a few thousand, across other disciplines, and understand the task ahead.

2. Two Green Shoots Awards candidates: Chicagoland's Brookhaven Market, and New Harmony Indiana's The White House Restaurant. Both are small operations, and fabulous experiences on last week's travels. It is businesses like these, that understand profits are made by truly serving customers(as opposed to raping them!), that will create the next American Renaissance. Three loud cheers for each establishment.

By the way, New Harmony Indiana was an inspiring visit...too long a task to detail now.

3. Speaking of awards--stumbled over an hour of sheer hilarity on CMT--the annual 'Here's Your Sign' Award, honoring the absolutely most stupid moments caught on video this year. My favorite was the guy who sawed off a tree limb while sitting on the part destined to fall...where have we seen that lately?

4. Walked nine holes from the blues, always kept the ball in play, started and ended on the same ball...6 over my goal of 'bogies from the blues'(carrying the bag, persimmon woods). But what fun!

United Breaks Guitars Part Trois

So, I'm putting my kid on a plane to London, with three bags--'cuz he's moving there for a year to spend a gap year.

We step up to the United Airlines counter, knowing there will be a surcharge for the extra bag, but knowing that all bags are well under the weight limit. The website quotes extra bags at $125.

'That will be two hundred dollars please.'

What? I ask--nowhere does it quote $200 for one extra bag.

Oh, comes the reply, we do that by destination, and you have to call us to get a quote...

I hand over the card for my haircut, and grimly say, 'Well, at least he's not taking a guitar...'

The chirpy response: 'Oh you saw that video? We now use it as a training video!'

Words fail. They just fail.

They never made the guitar destruction right, never learned anything from the experience. But they do view the video for training, created at someone else's expense.

What do you think the odds are that I ever, ever, ever spend another penny voluntarily with United Airlines?

But, as a zombie company, it will never be allowed to fail, and join Braniff, Eastern and so many others on the ash-heap of business history.

Thoughts for Mid-American Mom and Dad

For parents and their children who are planning for college: an article from 'Inside Higher Education'(a very informative site in general, by the way), discussing the increasingly competitive environment for university admission.

It is a sobering read.

Eight years ago, I sat in meetings with a high-powered university financial administrator of a major public university. He had a certain black humor about his job, as it was his role to inform all the deans and department heads that the day was approaching(he estimated 12-15 years) when his institution would function as a private university. The twin realities of an inexorable shrinkange of the tax base and inexorably growing demand on those dollars(due to promises made by previous legislatures) could lead to no other conclusion. Every dean would have to think and act aggressively about how to attract and retain both development dollars and high-value students to their public, state-supported university.

He said it made him the most hated man on campus.

The only error in his message was the time-line he projected, shortened dramatically by the ongoing shift in the economy. The deans that took him at his word are weathering the storm. One in particular who did not heed advice is no longer a dean, and his successor has been playing 'catch-up' ever since.

So, Mid-American Mom and Dad, who may have gone to college in the 1980's or 1990's: It is a different world that your children are embarking upon.

Math scores really matter.

The ability to write and converse coherently in English really matters.

Grades, SAT, and ACT scores really matter. AP courses really matter.

Whether your kid had a wonderful time in the umpteen kiddie soccer and softball programs now dangled before you does not matter.

University admission, with substantial scholarship assistance, is not a slam-dunk assumption, and your child's competitor may well be sitting in Shanghai, Hong Kong, Bangalore, or Capetown.

I can assure you, his/her family is paying attention to the list cited above.

Let's Be Careful Out There

If you ever had the pleasure of watching the venerable 'Hill Street Blues', from the 1980's, the character of the old Sergeant stands out vividly in the memory. He gave the morning briefing to the patrol officers in a drug-ridden and despairing neighborhood, and would always end with the admonishment: 'Let's Be Careful Out There'.

Fast-forward to Summer 2009. There is a gentleman named Tim Wood, whose public credits are as follows:


Timothy L. Wood is an assistant professor of history at Southwest Baptist University in Bolivar, Missouri. He is the author of Agents of Wrath, Sowers of Discord: Authority and Dissent in Puritan Massachusetts, 1630-1655 (Routledge).


There is another Tim Wood out there, who posted some sort of rant comparing our current President to Adolf Hitler.

Someone, with waaay toooo much time on his/her hands, decided that Timothy Wood, the professor, and Timothy Wood the wearer of tin-foil hats, were the same person!

(Which they definitely are not!)

Timothy Wood the professor has been bombarded with email from all corners, and his life has been disrupted by thousands of gullible people who assume: 'Well, it's on my email, it must be true!'

Take a moment to read his account, please.

It's insightful, both as to how this sort of lunacy gets underway, and why it can flourish so easily.

Let's Be Careful Out There!

United Breaks Guitars Part Deux

Dave Carroll continues his musical saga with United Airlines.

It's truly a 'Lemonade from Lemons' sort of story, and in the Bigger Scheme of Things, Mr. Carroll may well look back upon his guitar's destruction as the best thing that ever happened to him.

Of course, there's a lesson or two to be drawn here.

1. A creative, imaginative, and humorous response to a stupid situation such as this is usually quite effective. Great writing, and the audio is slickly produced. The video keeps a 'home-made' flavor, well-done within a small budget. (His mom provided catering services!) Great product does not necessarily cost a fortune to create, if the creator has the chops.

2. United Airlines is willing to sustain hundreds of thousands of dollars (at least!!) of lost goodwill before it will quietly make certain this passenger's complaint is addressed. That's because they know that they can always go to Timmy Geithner and BHO, 'cuz They're Just Too Big To Fail, and they'll be the recipients of hundreds of millions of taxpayer dollars(or dollars borrowed in the name of the taxpayer, at least), when top line revenues go seriously south in the coming months.

3. What if the CEO of United, instead, were to (a)call Mr. Carroll up, apologize, and quietly write a check (out of his own pocket) to the luthier of his choosing, and (b) fly to Toronto, take him to dinner, apologize again, and negotiate a deal with him to produce quirky folk-songy ads for United Airlines?

Maybe United could brew some lemonade for themselves out of this embarrasment.

WTF?

It continues to be quietly reported that the S&P is selling for 140 times earnings.

(And coincidentally, that 13% of the mortgages in the USA are at least one month overdue...)

(And, by the way, the FDIC just took over a three billion dollar hit today, closing three banks.)

(That makes 81 for the year, with at least another 150 or so to go.)

Where were we??? Oh yeah--the S & P...

Well, okay, this chart says it's only selling for 129 times earnings....that makes it all ok, right?

Silly ole' me was raised with the idea that 12 times earnings was the benchmark, and 10 was preferable. I mean, if one was to sell a business in its entirety, what sort of premium would a prudent person pay?

So, the question here isn't about money--lots of people profoundly qualified to enlighten us all about money.

The question is cultural: What happened to our sense of prudence? Our sense of what is proportional and appropriate? How much is enough? How much is too much, for our own good?

I just read a letter from a buddy on academic sabbatical overseas. He took his bride out for a splurge dinner at a famous restaurant. They had saved up for the evening's indulgence, and it was everything and more than they could have ever expected, a magical evening. I was so happy for them.

At one point though, he wondered out loud 'about the propriety of it, in a world of such turmoil and poverty...' In other words, had they gone overboard?

This sort of thing is why I've admired him so for thirty years--he lives his life always working to strike the balance between living generously and responsibly, and making certain he takes the love of his life to a fabulous restaurant for her birthday.

People like him don't buy $800,000 houses on a teacher's salary, or toss their money onto a 129x earnings bonfire..

...or encourage others to do that sort of stuff, so he can make the kind of money that affords him the ability to eat at that sort of restaurant weekly.

How do we create more like him?

And We Wonder Why Kuhlifornia Is In Bad Shape

On the way to somewhere else, I tripped across this nugget from ABC News, about the ready availability of marijauna in Los Angeles. (You'll need go to the bottom of the page, and click on 'High Times'.)

All perfectly legal, with a doctor's note.

And doctors perfectly willing to issue that note for any number of reasons.

In 1992, one of Bill Clinton's inside circle kept hammering home 'It's about the economy, Stupid!'.

He was wrong.

It's about the culture, always has been, always will be.