Thursday, December 18, 2008

John Sununu TARP Overseer

Senator John Sununu will provide oversight for the TARP. That means counting returns on America's sovereign taxpayer IOU fund. CNBC reported TARP investments are up 3.17%. How does that compare to Abu Dhabi? Sununu is just the man to run the numbers.

Congress passed a bill to provide credit and reign in distorting executive compensation. Bush's implementation did neither. However, the taxpayer provided hundreds of billions to banks, who subsequently cut over a hundred thousand jobs.

Rest assured this Christmas, a 3.17% return sits under Hank Paulson's TARP tree. It makes me feel all warm and fuzzy, or is it hot and bothered?

Tuesday, December 16, 2008

Obama's Pay for Performance in Education Already Tested on Wall Street

America suffers from "pay for performance." Executives optimized their pay, while risking our economic foundation. It began with stock options.

Nearly 30% of CEO's backdated their options. This decade long cheating maxed out the "purest" form of incentive pay. A college professor found the widespread malfeasance, not the Securities and Exchange Commission. Only a handful of egregious offenders were hand slapped for stealing millions from shareholders. The rest, like Apple's Steven Jobs, got off Scott free.

Extrinsic motivators, like money, are well studied. The damage they do is profound. Wall Street's recent implosion is a large fish bowl. Incentive pay caused investment professionals to act selfishly, risking the company and its customers. Their behavior took the oxygen out of customer's portfolios.

Yet, President elect Barack Obama wants P4P to save education and health care. Obama appointed Arnie Duncan, the "chief executive officer" of Chicago Public Schools, as his Secretary of Education. Note the CEO title.

Barack Obama said in his press conference, "If pay for performance works..." The highly educated President elect need only read "Punished by Rewards" by Alfie Kohn . Extrinsic motivators harm. As Dr. Deming said, "Will they ever learn?"

America's intrinsic motivation withers under the oppressive thumb of incentives. P4P will do for education and health care, what it did for Wall Street. Let's hope leaders somewhere "give people a good job to do." Pay them fairly. Quit bribing them. That includes employees, students, and doctors.

Update 3-29-14:  Evaluating teachers using student test scores has been a disaster, driving many experienced teachers into retirement or other fields.  Nevertheless the corporatization of public education charges onward.

Season's Beatings in Democratic Iraq?

One might expect the United States to ensure proper treatment for the reporter who launched two size tens at President Bush's head. The perpetrator's brother says Muntadar al-Zaidi suffered a broken hand, broken ribs, internal bleeding, and an eye injury. The relative also said the reporter had not been offered access to legal representation.

Mr Zaidi was a graduate of communications from Baghdad University and worked at a local television station. "He has no ties with the former regime. His family was arrested under Saddam's regime," the station boss said. Mr Zaidi has previously been abducted by insurgents and held twice for questioning by US forces in Iraq.

"This is a goodbye kiss from the Iraqi people, dog."

Welcome to your open democracy, Mr. al-Zaidi. Beatings on aisle 9...

Monday, December 15, 2008

Bernie Madoff, Rod Blagojevich, Thomas Tamm & Frances Townsend

Investment expert Harry Markopolos asked the SEC to explore Bernie Madoff in 1999. Nine years later Madoff says he lost $50 billion running a Ponzi scheme.

Illinois Governor Rod Blagojevich peddled influence in appointing a replacement for Senator Barack Obama's seat. Favors for friends are common in politics, but it took a wiretap to reveal Blago's egregious behavior.

Thomas Tann ratted the Bush administration for spying on U.S. citizens. The Justice Department ran the illegal spying operation.

Frances Townsend conducted the White House investigation on Hurricane Katrina. She authored the Lessons Learned report that omitted the hospital facility with the highest patient death toll. Two for-profit hospital companies shared Memorial Medical Center. Tenet Health owned Memorial, while LifeCare rented a floor of the hospital for its long term acute care unit. Thirty four patients perished, 10 under Tenet and 24 in the LifeCare unit. The Carlyle Group purchased LifeCare just weeks before Katrina struck. A year after the report's release, Jeb Bush was appointed to the Tenet Health board of directors, earning a handsome annual sum.

All of the above are malodorous. However, Frances Townsend (#4) weighed in on Thomas Tann (#3). She said:

"You can't have runoffs deciding they're going to be the white knight and running to the press," says Frances Fragos Townsend, who once headed the unit where Tamm worked and later served as President Bush's chief counterterrorism adviser. Townsend made clear that she had no knowledge of Tamm's particular case, but added: "There are legal processes in place [for whistle-blowers' complaints]. This is one where I'm a hawk. It offends me, and I find it incredibly dangerous."

If a government can run an illegal program with approval from the highest levels, they can run roughshod over whistle blowers, internal or external. Consider Tamm's treatment:

The FBI has pursued him relentlessly for the past two and a half years. Agents have raided his house, hauled away personal possessions and grilled his wife, a teenage daughter and a grown son. More recently, they've been questioning Tamm's friends and associates about nearly every aspect of his life. Tamm has resisted pressure to plead to a felony for divulging classified information. But he is living under a pall, never sure if or when federal agents might arrest him.

My questions are more Markopolos-like than Tammish in nature. As a hospital administrator, I endured in a river flooded Virginia teaching hospital and evacuated a Texas Gulf Coast facility before record Hurricane Gilbert. I submitted my concerns about the sorry White House Lessons Learned report shortly after its publication in 2006 and received no answers from Congressional representatives or any federal agencies.

Are any whistle blowers twisting under a federal thumb? Frances Townsend would be offended if they spoke out. I'm offended by her poor quality work. The resounding silence from all arms of our federal government is equally disturbing.

Bush's TARP Has No Executive Pay Limits

George Bush's craftiness in fleecing America should not be underestimated. Why did the Federal Reserve Bank buy AIG's toxic assets and not the Treasury? Had the Treasury made the purchase via auction, executive pay could be limited. That wouldn't do. The NYT reported:

One sentence in the bill, added at the insistence of the Bush administration, required that executive-pay provisions apply only to firms that hold troubled assets to the government in auctions. But the Treasury Department has switched strategies since then, instead making direct investments in financial institutions.

Recall Bush lectured Wall Street traders at the NYSE over executive pay. George W. consistently looked after his wealthy peers.

A financial firm catering to the high net worth marketplace received TARP equity investment. Boston Private Financial Holdings bragged of their strong capital position. Yet, Carlyle Group affiliate BPFH received $154 million in taxpayer money. This occurred while Carlyle had $40 billion of dry powder and actively searched for financial investments.

In the 1990's George W. Bush served on the Board of Carlyle affiliate CaterAir. Two timer President Bush and his TARP caters to the executive class.

Sunday, December 14, 2008

Democracy is Messy

The first shoe was for 600,000 dead and 1 million displaced. The second shoe was for another 600,000 lives lost and over 1 million more refugees. Pardon any fecal matter. Many Iraqi streets serve as open sewers.

Fishy Meet the Press

David Gregory's inaugural session of Meet the Press addressed Illinois Governor Rod Blagojevich's pay for play politics. David acted like President Bush hasn't operated the federal government on behalf of his rich donors for eight years. Mr. Gregory should know from the fishy aftertaste in his mouth.

He shared Dover Sole at the White House with Queen Elizabeth, alongside 37 high dollar Republican donors. No, he didn't cover the event as the NBC reporter. The Press rep and his wife dined with royalty.

Gregory was occupied with additional assignments when George W. used the Beijing Olympics for a family and rich donor friend vacation. Otherwise, David might have sand in his eyes to go along with the fish taste. Meet the Putz earned its title.

Wall Street Water Carrier

Pay attention to Democratic Congressperson's position on carried interest taxation. The New York Times highlighted Senator Chuck Schumer's close ties to Wall Street and his efforts to maintain investment managers' preferred tax status.

It also stated his key role in the $700 billion Wall Street bailout. Financial firms ponied up $135,000 in campaign donations in support of Chuck's determined leadership.

Senator Schumer drives a hard bargain, much like the President elect's Chief of Staff, Rahm Emanuel. Both take "no", as the first step to "yes". Both are legendary for maxing out donations from wealthy supporters. A close friend calls Schumer a "jackhammer," Emanuel is known as "the hammer."

Rahm worked for an investment bank between the Clinton White House and his service in Congress. Will he join Chuck as Wall Street's water carrier? Stay tuned...

Saturday, December 13, 2008

The Gates Test: Obama vs. Bush

Pentagon Chief Robert Gates warned the world not to test President Barack Obama in his early days in office. Haaretz reported:

Anyone who thought that the upcoming months might present opportunities to test the new administration would be sorely mistaken," he told the Manama Dialogue conference, organized by the London-based International Institute for Strategic Studies.

"President Obama and his national security team, myself included, will be ready to defend the interests of the United States from the moment he takes office on January 20th."

Ironically, his words at the Bahrain security conference pointed to the failures of his current boss, George W. Bush.

He repeated longstanding appeals for Sunni Arab states to support Iraq's U.S.-backed government with full diplomatic relations and forgiveness of Saddam
Hussein-era debts.

Sunni Arab powers have harbored deep reservations about the Baghdad government, believing it to be sectarian and too close politically to Shi'ite-dominated Iran.

Gates said Sunni states should welcome a chance to forge close relations with Iraq, partly to prevent Iran from doing so.

"There is no doubt that Iran has been heavily engaged in trying to influence the development and direction of the Iraqi government - and not as a good neighbor," he said.

"Iraq wants to be your partner," he told his audience. "And, given the challenges in the Gulf, and the reality of Iran, you should wish to be theirs."

Five years after freeing Iraq, the Middle East remains unstable. America plans for troops to stay indefinitely, despite an agreement saying otherwise. Western interests in the region are vast. Fighting piracy is a huge concern. It validates the huge U.S. military presence. How will that stick be mobilized? It depends on the test. Bush-F, Obama-?

Friday, December 12, 2008

Bush Advises College Grads

President Bush spoke at Texas A & M's graduation. The commencement speaker offered the following:

"Remember that popularity is as fleeting as the Texas wind. Character and conscience are as sturdy as the oaks on this campus," he told the graduates and their families at Reed Arena. "If you go home at night, look in the mirror and be satisfied that you have done what is right, you will pass the only test that matters."

Where does omitting the hospital with the highest patient death toll from the White House Katrina Lessons Learned Report fit? Is it a Fran Townsend skirt blowing in the wind moment? Or was Bush a stand up oak on behalf of for-profit hospital companies, Tenet Health and LifeCare Hospitals? The Carlyle Group purchased LifeCare just weeks before landfall. Carlyle shares a Pennsylvania Avenue address with the White House, 1001 vs. 1600.

The Texas wind blew Jeb Bush onto the Board of Tenet Health in April 2007. Or did the Bush family grow roots in for-profit health care? Uncle Bucky sits on the WellPoint board.

Wind, oaks, popularity, character, conscience? I leave this mix with you. Good luck figuring out how a "robust investigative report" omits the hospital with the highest death toll. If you drop the "ro", that leaves "bust", which sums up the Bush Presidency.

WSJ Cites Daschle's Duel Appointments

President George W. Bush said, "Childrens do learn." Some children grow up to write for the venerated Wall Street Journal.

Former Senate Majority Leader Tom Daschle is being named to duel posts this morning: secretary of health and human services, and head of a new White House office on health reform, giving him a prominent perch for a major push for health care legislation. For Daschle, the double duty is meant to avoid the scenario that unfolded in the Clinton administration, where the White House took the lead on health reform and left Donna Shalala, who was HHS secretary, largely in the sidelines.

Duel, double duty? The correct word is dual. Unless, Tom Daschle has multiple personalities, with several at odds. Is that what's to come from Rupert Murdoch, an internally conflicted Daschle? Or, did one of Bush's childrens learn? Stay tuned...

Thursday, December 11, 2008

Thirteen Senators Can Be Eliminated, Eighty Seven Remaining Millionaires Deserve Pay Cut

The Senate voted 52-35 to bring up the auto bailout bill, short of the 60 votes needed to advance the bill. Eighty seven senators voted, leaving the total thirteen short.

If American auto workers need to be reduced in numbers and wages moved to the average paid foreign car employees, then Congress should lead by example. How many fired Senators would send the right message? And how much can we cut pay for the millionaires enriching their families via their plum political patronage?

People are livid over America's sorry leadership at all levels. Greed killed investing and it's taking a serious toll on politics. A pox on the Capital and the White House as they pursue the lowest global common denominator on pay and benefits, political and business leaders excepted.

South Carolina Senator Predicts Riots from Auto Bailout

"We’re going to have riots. There are already people rioting because they’re losing their jobs when somebody else is being bailed out."-Jim DeMint 12/10/08 at a press conference

Assume Senator Jim DeMint (R-SC) is serious about his prediction that widespread job loss will cause riots. Maybe, he should take action to keep people employed. At a minimum, he should be quiet. A leader would work behind the scenes with police and National Guard to minimize any threat.

But giving billions to companies to fire tens of thousands of workers? Mr. DeMint's Senate did just that.

CitiBank-got $45 billion in TARP money, plus $306 billion in loan guarantees-53,000 layoffs
Bank of America/Merrill Lynch-received $25 billion-plan to fire 35,000 employees

Try planning a bailout that saves jobs, Mr. DeMint. America's reverse economic development is funded by a U.S. sovereign multi-generational IOU fund.

Companies that got unions this past century, generally deserved them. If a riot breaks out in front of Senator DeMint's office, I won't be surprised.

Blago & Conaway: Pay to Play Brothers?

In light of Illinois Governor Rod Blagovejich's "pay to play" antics, a review of Representative Mike Conaway's Albertine earmark is in order. John and James Albertine are professional lobbyists. They also started Global Delta, a defense research company in 2003.

The 2008 Defense bill included a $1.6 million earmark for Global Delta. One of the sponsors of the earmark is West Texas Congressman Mike Conaway. His office has an interesting pattern of donations from the Albertine brothers and their spouses as the Defense bill wound through Congress. The Albertine's donations are in italics in the timeline below:


Title: To authorize appropriations for fiscal year 2008 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes.

3/13/2007 John Albertine of Fredericksburg, VA donated $2,500 to Mike Conaway and received a $200 refund.
3/13/2007 James Albertine of Bethesda, MD donated $500 to Mike Conaway

3/20/2007 H.R. 1585 Introduced in House
5/11/2007 Reported (Amended) by the Committee on Armed Services. H. Rept. 110-146.
5/14/2007 Supplemental report filed by the Committee on Armed Services, H. Rept. 110-146, Part II.
5/17/2007 Passed/agreed to in House: On passage Passed by recorded vote: 397 - 27 (Roll no. 373).

5/21/07 John Albertine of Fredericksburg, VA donated $500 to Mike Conaway, but received a refund that same day
5/21/07 Mona Albertine of Fredericksburg, VA donated $500 to Mike Conaway
5/29/07 James Albertine of Bethesda, MD donated $500 to Mike Conaway

9/30/2007 James Albertine of Bethesda, MD donated $1,000 to Mike Conaway

10/1/2007 Passed/agreed to in Senate: Passed Senate with an amendment by Yea-Nay Vote. 92 - 3. Record Vote Number: 359.

10/4/07 John Albertine of Fredericksburg, VA donated $1,000 to Mike Conaway, but received a refund that same day
10/4/07 Mona Albertine of Fredericksburg, VA donated $1,000 to Mike Conaway

11/26/2007 James Albertine of Bethesda, MD donated $1,000 to Mike Conaway, but received a refund that same day
11/26/07 Anne Albertine of Bethesda, MD donated $1,000 to Mike Conaway

12/6/2007 Conference report H. Rept. 110-477 filed.

12/12/2007 Conference report agreed to in House: On agreeing to the conference report Agreed to by the Yeas and Nays: 370 - 49 (Roll no. 1151).

12/14/2007 Conference report agreed to in Senate: Senate agreed to conference report by Yea-Nay Vote. 90 - 3. Record Vote Number: 433.

12/14/2007 Cleared for White House.

12/19/2007 Presented to President.

12/28/2007 Vetoed by President.

H.R. 4986

1/16/2008 Introduced and passed in House

1/22/2008 Passed in Senate

1/28/2008 Signed by President

2/15/2008 James Albertine of Bethesda, MD donated $500, but received a $200 credit
2/15/2008 Anne Albertine of Bethesda, MD donated $200 to Mike Conaway
2/15/2008 Mona Albertine of Fredericksburg, VA donated $500 to Mike Conaway

Blagojevich and Conaway, two birds of a feather or of the same political "pay to play" school? Maybe not, but something's fishy...

Wednesday, December 10, 2008

Boorish Pay to Play's Cretin Sibling, Pay to Perform

America's business and government leaders need to be "paid" to do their job. Salary and benefits don't qualify as pay, more juice is needed. It could be:

1. Incentive compensation (bonus, stock, etc.)
2. Golden parachute
3. Cushy consulting arrangement
4. A high paying job in an affiliated nonprofit or think tank
5. Seat on a corporate board (or two)

Extrinsic motivators caused America's financial sector to package and sell junk. Commissions compounded with securitization fees. They crescendoed into magnanimous CEO incentive compensation. But the system blew up.

Investing is dead. People don't trust financial products or the institutions that offer them. Financial statements can look fine, while lurking off balance sheet are credit derivatives, capable of destroying a company overnight.

Pay to play politics, the Red version, expressed as K Street. The Blue team finds the Illinois governor running a bidding war for a U.S. Senate seat. Soon politics will be in the same place as Wall Street.

Due to poor leadership, whole markets have been destroyed. With a lack of trust, people quit investing. When will they quit voting? When will the system give us leaders willing to do good work for a fair day's pay, and no more? That's when America has a chance to recover. Otherwise, welcome to Pottersville.

Tuesday, December 09, 2008

Blue Blagojevich's Bank of America Boondoggle

Illinois Governor Rod Blagojevich threatened to punish Bank of America for their role in bankrupting a Chicago manufacturer. The next morning he was arrested for corruption, which he selfishly earned.

The Democrat's "pay to play" schemes were way too overt for more subtle blue Chi-town politicians. His gauche self interest stood on display for a political party trying to turn back the sickening "K Street" project, sponsored in just as bold a manner by the red team. Citizens just voted against shameless corruption.

Rumor has it, Rahm Emanuel pulled the plug on Blagojevich. The President elect's Chief of Staff received $10,000 from Bank of America's PAC for his House run. Barack Obama's Presidential run garnered $254,167 from the same BOA Political Action Committee.

Meanwhile $7 trillion in financial interventions and a $1 trillion stimulus package have corporate America foaming at the mouth. Blue lobbyists circle Capital Hill, trying to steer some of that largess to their clients.

Obama isn't sworn in, but the mess that needs cleaning up keeps growing. The New Yorker indicates Rahm Emanuel and Barack Obama coached Blagojevich in 2002. David Axelrod wouldn't help, citing concerns about Rod's governing abilities. Those came to pass.

The question isn't which way this disturbing story will be spun, that's away from Emanuel-Obama. It's whether there is anything left to save. Is our federal government one big boondoggle?

Pelosi's Small Amount of Money

House Speaker Nancy Pelosi spoke of last chance aid for America's auto manufacturers. She termed the $15 billion as a "small amount of money." Really, Mrs. Pelosi?

That sum is nearly half of hospital uncompensated care, $31 billion at last check. For two years, Nancy didn't budget a small amount of money to help struggling Americans or financially strapped safety net providers.

America has a crisis of leadership, and it's far worse than the credit crunch. Board rooms, executive suites and both political parties are infected with hypercompetition, greed, and addiction to extrinsic motivators. Profound knowledge is needed in our profoundly suboptimal times.

Rahm Has Work to Do with Blag's Downfall

The Chicago boys are likely mixing concrete for Illinois Governor Rod Blagojevich. His arrest for influence peddling stands to taint the Democratic machine.

Rod implemented a pay for play scheme worthy of Tom DeLay's K Street. The indictment mentioned Blag's arm twisting for a public-private toll road project, funding for a children's hospital, and the chance to serve in the U.S. Senate.

The question is how fast the Governor sinks. Will his shepherding by President elect Barack Obama and Chief of Staff Rahm Emanuel come to light? One only has to read a New Yorker piece to find:

That year, he (Obama) gained his first high-level experience in a statewide campaign when he advised the victorious gubernatorial candidate Rod Blagojevich, another politician with a funny name and a message of reform. Rahm Emanuel, a congressman from Chicago and a friend of Obama’s, told me that he, Obama, David Wilhelm, who was Blagojevich’s campaign co-chair, and another Blagojevich aide were the top strategists of Blagojevich’s victory.

He and Obama “participated in a small group that met weekly when Rod was running for governor,” Emanuel said. "We basically laid out the general election, Barack and I and these two.” A spokesman for Blagojevich confirmed Emanuel’s account, although David Wilhelm, who now works for Obama, said that Emanuel had overstated Obama’s role. “There was an advisory council that was inclusive of Rahm and Barack but not limited to them,” Wilhelm said, and he disputed the notion that Obama was “an architect or one of the principal strategists.”

David Axelrod, the preĆ«minent strategist in the state, declined to work for Blagojevich. “He had been my client and I had a very good relationship with him, but I didn’t sign on to the governor’s race,” Axelrod said. “Obviously he won, but I had concerns about it. . . . I was concerned about whether he was ready for that. Not so much for the race but for governing."

Rest assured, David has a strategy to divorce Obama and Emanuel from Blagojevich. Will they turn him into a raving madman? Might it involve copious amounts of silence from an underwater Blag, sporting his new shoes. Or, will Rahm end up as hero?

FBI Nails Blag, Ignores Bush

The Federal Bureau of Investigation arrested Illinois Governor Rod Blagojevich (D) and his chief of staff for corruption. They conspired to gain financial benefits for Rod or his wife. Swimming in dirty political waters? Hmmm...

Not long ago, I contacted the same FBI. I shared concerning facts:

1. The White House Lessons Learned report omitted the hospital with the largest patient death toll after Hurricane Katrina.

Memorial Medical Center-10 deaths
LifeCare Hospital (rented a floor)-24 deaths
Total MMC deaths-34

2. Memorial was owned by Tenet Health, a for-profit hospital company known for serial ethics abuse.

3. The Carlyle Group purchased LifeCare Hospitals from GTCR Golder Rauner just weeks before Katrina struck. President George W. Bush served on the board of Carlyle affiliate CaterAir in the 1990's. GTCR Golder Rauner's LifeCare executives paid $200,000 in federal election fines for illegal campaign donations from 1998-2002.

4. Frances Townsend submitted the report to the public in February 2006. Jeb Bush was appointed to the Tenet Health board in April 2007.

I solicited the FBI's help. They never replied. Neither did Rep. Mike Conaway, Senator John Cornyn or Senator Kay Bailey Hutchison. What's Patrick Fitzgerald doing next?

Sunday, December 07, 2008

Bush Acts on Financial Crisis

Meet the Putz

Tom Brokaw introduced the new host of Meet the Press, David Gregory. Many know David from his White House reporting years. During his tenure Gregory watched 1600 Pennsylvania Avenue turn in a bawdy Corporawhorehouse.

One of his final gigs involved sharing Dover Sole with Queen Elizabeth, a cubed version of Clinton's Lincoln Bedroom. Thirty seven diners ponied up major Republican ka-ching. The five news persons in attendance failed to note the comparison. Was that a requirement of their invitation?

The chance to rub elbows with royalty is a heady thing. David proved his ability to pull stories. How many punches will he pull at Meet the Press? Stay tuned...

Saturday, December 06, 2008

General Jeb to Ride in from the South?

With no credible Republican national leaders, a move is afoot to claim regional territory. Political pundits pose a Mel Martinez resignation, opening the door for Jeb Bush in the Senate. Jeb would have to give up those cush private sector appointments:

Lehman Brothers Private Equity adviser
Tenet Healthcare Board of Directors
CNL Bancshares Board
Rayonier Board of Directors

Jeb's cousin, George Herbert Walker, came out on top in the Neuberger Investment Management bid. Tenet, CNL, and Rayonier all have deep Florida connections. Jeb approved numerous financial settlements with Tenet as Florida's Governor.

President George W. Bush did Tenet a huge favor by omitting any mention of Memorial Hospital and their 34 total deaths from his Hurricane Katrina Lessons Learned report. Twenty four of those deaths belonged to renter, LifeCare. The Carlyle Group purchased LifeCare just weeks before landfall.

The big money, big political boys look after one another. Brand Bush should be Tainted Tylenol. Jeb's running for anything shows the shallowness of our national leadership bench.

Update 1-29-12:  Jeb is being refloated, given the current toilet bowl of Republican candidates.  

Friday, December 05, 2008

Did Tyler Tunnel in Transportation Department?

News reports show Bush political appointees burrowing their way into the federal bureaucracy. The Transportation Department is poised to spend trillions on infrastructure projects, boosted by an Obama stimulus package.

Might Bush public-private partnership (PPP) proponents bury themselves in Transportation? They could steer big money to their private sector friends.

Tyler D. Duvall worked hard to push PPP's as Under Secretary of Transportation. The White House appointed Robert A DeHaan on November 17 to take Tyler's place. Yet, no stories pointed to Tyler's new resting place. Did he go underground? Does he have access to the same Treasury vault as Hank Paulson? When will Tyler come up for air? Stay tuned...

Update: Tyler is a Senior Advisor at McKinsey & Company

Update 6-16-11: Duvall spoke on the National Infrastructure Bank at the New America Foundation.  He clearly supports the role of huge private equity firms.  He raised the usual PEU threat of capital going to other countries. 

Innovation: From Wall Street to Minnetonka

Wonder where those creative financial gurus landed after their precipitous fall from towering Wall Street? Did one migrate west to Minnesota? Minnetonka based UnitedHealth Group's "first of a kind" product has that familiar vaporware ring. The Star-Tribune reported:

For these economically uncertain times, Minnetonka-based UnitedHealth Group has a "first of its kind" product: The right to buy an individual health policy at some point in the future even if you become sick.

Called UnitedHealth Continuity, the product is not actual medical insurance, but is aimed at people who may have insurance now but are worried they may lose it -- and may not be able to get replacement insurance on their own.

People who are already sick will generally not be eligible for the new product. Those who do pass a medical review will pay 20 percent each month of the current premium on an individual policy to reserve the right to be insured under the plan at some point in the future.

"What this product is designed to do, for a very modest premium, is to essentially protect your insurability for the future," said Richard Collins, president of UnitedHealth's individual insurance unit, who says he is the first policyholder.

Funny, administrative expenses and profit roughly comprise 20% of health insurance premiums. UnitedHealth guarantees their goodies without providing any coverage.

Calling it a "very modest premium" is inaccurate, as no insurance is provided. One is only buying the right to pay insurance premiums in the future. I see no lock in pricing guarantees, just the right to buy.

By denying coverage for the most spurious of reasons, UnitedHealth drives in fear. Their "innovative" product mines that very fear. America has a bad aftertaste from other recent innovations.

The Wall Street boys ruined investing for years to come. Tainted Tylenol financial products should be off the shelf, but Goldman Sachs & company can't stop securitizing or selling "non-insurance" credit coverage. Balance sheets remain opaque, while derivatives sit outside financial statements ready to pounce in asset slashing fashion.

Imitation may be a great flattery. However, beware UnitedHealth of what you create. On Wall Street, no one is buying.

Thursday, December 04, 2008

Political Links to Hurricane Katrina's Memorial Medical Center

Weeks before Hurricane Katrina struck the Gulf Coast, two private equity firms inked a deal for LifeCare Hospitals. GTCR Golder Rauner sold their majority stake to The Carlyle Group. The sale closed before the Category 3 storm sideswiped New Orleans. Thirty four patients perished in Memorial Medical Center in the sweltering toxic aftermath. Twenty four were LifeCare Hospital's responsibility and ten were Tenet Healthcare's. LifeCare rented a floor in Memorial.

Tenet is a large for-profit hospital company, while LifeCare's niche is long term acute care. Influential politicians are associated with the firms' past and future.

GTCR Golder Rauner

Between his service in the Clinton White House and his Congressional position, Rahm Emanuel worked for an investment banker. GTCR Golder Rauner's chairman advised Mr. Emanuel on his career. GTCR was Rahm's account. His silence has been golden.

Tenet Healthcare

Ex-Nebraska Governor and Senator Bob Kerrey sat on the Board of Directors since 2001. Tenet is a serial ethics abuser. Their SEC filings show numerous settlements with states and the federal government on billing and financial practices. The company never admits any wrongdoing, they just pony up millions in fines.

Ex-Florida Governor Jeb Bush joined the Board in April 2007. This came roughly a year after the White House omitted any mention of Tenet, LifeCare or Memorial Medical Center from their Hurricane Katrina Lessons Learned report.

Serial ethics abuser Tenet settled with the State of Florida several times under Governor Jeb's term in office. Tenet hired lobbying firm Quinn Gillespie to discuss "corporate governance changes" with the Executive Office of the White House, before Jeb's enriching appointment. Did President George W. do some "horse trading", an omission for a commission?

LifeCare Hospitals

Company executives were found guilty of illegal campaign contributions in three election cycles, 1998, 2000, and 2002. Fines totalled $200,000. The company paid $50,000 of this amount. Donald Boucher and David LeBlanc were fined individually for their improper acts. Most donations were to Republican candidates, but a number of Democrats received funds.

The Carlyle Group

This private equity underwriter (PEU) is legendary for its political hires and access to America's hallowed halls of government. Carlyle shows as a top 10 donor for Rep. Rahm Emanuel and Senator Evan Bayh. A small sampling of their Blue credentials shows numerous Clinton White House connections. President Clinton privatized USIS, which Carlyle flipped for large profits.

With all that political gunpowder and ManorCare grease, Memorial Medical Center and their 34 patient deaths are but a distant memory. LifeCare deaths warranted not one mention in Congressional hearings on Carlyle's purchase of ManorCare. Rahm Emanuel sat on the House Ways & Means Subcommittee on Health. He never uttered "ManorCare," much less "LifeCare."

If Carlyle could fail one of twenty one LTAC's in a time of crisis, what might they do with 500 facilities, most nursing homes? The Carlyle Group knows how to keep their good name.

Rest assured, their interest in adding health care companies is strong. They even have an Axelrod exploring new opportunities. How deep does the rabbit hole go?

Bush Relation Lands on Top of Lehman's Crown Jewel

George W. Bush's cousin and brother came out in high cotton from Lehman Brothers' bankruptcy. Cousin George Herbert Walker will be CEO of an independent Neuberger Investment Management. The firm manages $160 billion in assets.

Brother Jeb Bush advises Lehman's private equity funds, included in the Neuberger spin off. Jeb is on a winning streak. His name was mentioned as a possible Senate candidate and he landed a spot on the Rayonier Board of Directors. That's in addition to his board seats at Tenet Healthcare and CNL Bankshares.

Lehman's bankruptcy was a precipitating event for the mid-September credit meltdown. Many financial experts call it a bad move, but it seemed to benefit the Bush boys. George W. avoided egg from saving his near relations' firm. George Herbert Walker and Jeb Bush can get a chunk of $2 billion in segregated bonus money and own part of a stand alone Neuberger. Another Bush league victory in their no cash down deal!

Wednesday, December 03, 2008

WMD & NAC Reflect Homo Sapien's Ability to Divide

Two news stories show people's ability to divide and harm. A WMD Commission report predicts a nuclear or biological attack on a major city in the next five years. U.S. Senator Bob Graham called necessary preparations a "civilian on civilian war" in his CSPAN interview. Government diminished as a responsible institution, especially when the Bush administration thwarted the commission’s access to classified intelligence on nuclear proliferation.

Another story dealt with a different hegemonic force in the world, religion. The U.S. Anglican Church plans to start a new chapter. Conservative Episcopal churches drafted a constitution for a new North American Church. Faith dimmed as a uniting, uplifting institution.

How religion and countries can exist together in the same global communion is looking increasingly problematic. Our structures look increasingly fragile and incapable of optimizing on behalf of the whole. Officials practicing division lead the way. Humanity would deliver much, much better.

Tuesday, December 02, 2008

Bush's Heavy Hand Smacks Federal Employee Unions

President George W. Bush denied collective bargaining rights to 8,600 federal workers in law enforcement, intelligence, and agencies involved with national security. Combine this with his eight year war on whistle blowers, and federal employees are literally on their own.

Bad management historically ended up with unions. President Bush qualifies as "such a manager." Rather than give employees recourse, George W. imposed a structural barrier. With the swipe of a pen, Bush issued an executive order.

Consider it a Christmas present for the U.S. Chamber of Commerce, currently up in arms over a proposed new method for union organizing. Bush had the Chamber's back in 2007, with his executive order making it more difficult for private sector whistle blowers to prevail. Consumer recourse took a back seat to pharmaceutical and medical device makers under Bush's FDA preemption.

At varying times in American history, our federal government helped balance unfair power differentials. The current version clearly favors corporate rights.

Monday, December 01, 2008

Bob Kerrey's Unusual Corporate Connections

Ex-Nebraska Governor and Senator Bob Kerrey, the highly respected 9-11 Commission co-chair, surfaced not long ago as a corporate board member for Tenet Healthcare, Genworth Financial, Jones Apparel and Scientific Games Corporation.

Conde Nast Portfolio mentioned Mr. Kerrey in a story on Pete G. Peterson of the Blackstone Group, the Council on Foreign Relations and the Peter G. Peterson Foundation. It quoted Kerrey under the topic of government deficit reduction, increasingly unlikely as our economy implodes.

Bob Kerrey, the former Nebraska senator and a close friend of Peterson’s, puts it this way: “It’s like coming up with a really good welfare-reform plan for New Orleans, and then Katrina hits.”

Bob was in a position of responsibility when Katrina struck. Tenet Healthcare owned Memorial Hospital, the facility with 34 total patient deaths. Twenty four deaths came from LifeCare Hospital's long term acute care unit. LifeCare rented a floor from Memorial.

Unfortunately, the White House did not perform a really good investigation of Katrina. Frances Townsend's Lessons Learned report made no mention of Tenet's Memorial Hospital. It also omitted LifeCare, the hospital with the highest death toll in the storm.

The Carlyle Group purchased LifeCare Hospitals just weeks before Katrina's landfall. The two corporations divied up liability in a secret settlement. Their attorneys blamed rogue clinicians. When that failed before a grand jury, they targeted the federal government. LifeCare claims patients became wards of the government when FEMA evacuation teams set up in New Orleans.

Tenet sold Memorial Hospital and Carlyle closed their LifeCare unit. Both firms stayed out of the limelight, thanks in part to White House silence in their February 2006 report.

Spring 2007 found Jeb Bush appointed to the Tenet Healthcare Board of Directors. Funny, the State of Florida fined Tenet numerous times for unethical behavior. Was Jeb's appointment in gratitude for past preferential Florida treatment or George W. Bush's White House investigative silence?

Genworth Financial imploded along with the rest of America's financial sector, losing 94% of its stock value. It recently purchased InterBank, a savings & loan, to gain access to Hank Paulson's TARP funds. How much will Genworth draw?

Scientific Games tapped Mr. Kerrey's board skills in 2008. The company provides state lottery and other gaming services. People need distractions while they're being fleeced. What does Scientific Games have on tap? Stay tuned, the red and blue franchise contests are clearly in play...

Sunday, November 30, 2008

Obama Moves from Eight Years of Private Healthcare Solutions

President Barack Obama promised to address America's legions of uninsured citizens during his political campaign. The number of uninsured and underinsureds grew by tens of millions the last eight years. President George W. Bush relied on the private health care system to produce the best, most efficient, cost effective health care.

Financial pressure impacted nonprofit community and teaching hospitals disproportionately. Three large charity hospitals haven't reopened in Gulf Coast communities devastated by hurricanes. While CitiBank got $45 billion in cash and hundreds of billions more in loan guarantees, John Sealy Hospital in Galveston begs with its hand out at state and federal houses. CitiGroup fired 52,000 employees so Uncle Sam could get a return on its preferred stock investment. John Sealy let 3,000 health care professionals go, while it struggles to restart critical services.

Financially strapped nonprofit hospitals considered selling out to their for-profit brethren the last few years. Such a merger was announced in my hometown, but it later failed. One might expect a little compassion for institutions carrying the burden of caring for all who present. I've yet to see it.

The Washington Post reported on wide variations in health care practice and costs in various regions of the U.S. Much of our expensive care is delivered in the last two years of a person's life. The piece stated:

A Dartmouth team concluded that as much as 30 percent of medical spending -- or $700 billion -- does nothing to improve care.

Even if only a third of that could be invested in critical programs, "imagine the possibilities," said Peter Orszag, head of the Congressional Budget Office, who was nominated last week to be director of the Office of Management and Budget in the Obama administration. "Given the scale of it, I am puzzled as to why we are not doing more to improve the efficiency of the health system."

Peter Orzag, please look up the history of DRG's and HMO's in America. They were efforts to improve the efficiency of the health care system. President Bush pushed the ever efficient private health care marketplace as the tonic for America's ills. Yet, that hasn't worked so well.

The WaPo article cited expert advice:

A high-performance 21st-century health system, they say, must revolve around the central goal of paying for results.

Horse hockey! It must revolve around the central goal of improving processes. That requires an understanding of variation, systems, psychology, and knowledge, along with their interactions. Results or outcomes can only be improved by changing the underlying processes.

America saw the distorting impact of "paying for results" with Wall Street executive incentive compensation. Health care "pay for performance" will cause similar suboptimization as providers do whatever it takes to get the reward. How many will cook the charts, like their CEO counterparts did with their books? How many will steer their patient load to already healthy patients, like executives steered stock option award dates to maximize their future bounty? How far will the ethics bar fall to garner the reward?

Providers have a long history of adapting to carrots and sticks, whether they came from government or private insurers. They will adapt to whatever Peter Orzag, Tom Daschle, Max Baucus and President elect Obama put on the table. I just hope America's nonprofit community hospitals have a good seat and that Dr. W. Edwards Deming's teachings are foundational for planned change.

People in health care have a good job to do. It's time to build a more optimal system, one that works for 300 million of us. If we can afford $7 trillion to save our financial system, filled with tainted Tylenol like products. we can afford to transform our health care system and its tattered safety net.

The early lingo points to a U.S. Chamber of Commerce approach, where employers need relief from expensive health insurance benefit costs. But Barack Obama is yet to take office. It will be interesting to see the frames used as our federal leaders tackle health care reform.

Let's hope its not part of the drive to a global lowest common denominator on worker pay and benefits. The big money boys are loath to step up to the plate.

Saturday, November 29, 2008

George Bush Hates Poor People

Besides creating more poor Americans, two terms of President George Bush provided additional burdens for low income families. The latest blow involves government provided health coverage. A federal regulation officially allows states to charge a portion of the health insurance premium. Medicaid can add higher copayments for doctor visits, hospital care, and pharmaceuticals.

Poor people are expected to pony up $1.3 billion in cash or credit for care. Over the same five year period, state and federal governments will save $2.5 billion. However, George W. is a notorious sandbagger when it comes to estimates. If history is a guide, poor people will pay much more and government savings will be larger. How many people are at risk for reduced access to care, due to financial constraints?

13 million Medicaid recipients
46.5 million uninsureds
25 million underinsureds
2 million dual eligibles under Medicare Part D
Much of the total 86.5 million at risk Americans arose during Bush's eight years in office. His corporate sponsored White House has a clear legacy of shame. Unfortunately, the pattern continues as America races to the lowest common denominator on worker pay and benefits. With business pulling away from the traditional health insurance benefit and government shifting costs to the poor, average folks will pay. Some may do so with their life, given the Bush team's acknowledgment "some individuals may choose to delay or forgo care rather than pay their cost-sharing obligations."

CNN's Terrorism Expert AWOL During Mumbai Attacks

Ex-White House Homeland Security Adviser Frances Townsend joined CNN in May. One might expect a terrorism expert to weigh in during the three day attack in Mumbai, India. But Fran was quiet. Why?

Not long ago, a reporter from The Scotsman reported Frances advised the Obama campaign. The author spelled her middle/maiden name wrong, so he lost credibility points. But shortly thereafter, CQPolitics had Mrs. Townsend offering her services to an Obama administration. It wasn't quite "Barack, call me!", but it was close.

Is Frances Fragos Townsend hard at work advising the President elect? Will she be named this week, along with Hillary Clinton and General James L. Jones? Stay tuned...

Friday, November 28, 2008

Back to "Great Man" Model of Leadership

A reporter asked President elect Barack Obama how the public should interpret his appointment of long time political insiders to key positions within his administration, in light of his calls for change in Washington. Pundits call his appointment of political hard ball staffers a "good cop-bad cop" relationship. Obama responded:

"Understand where the vision for change comes from first and foremost," Obama asserted. "It comes from me. That's my job, is to provide a vision in terms of where we are going and to make sure that my team is implementing it."

The Clinton administration was surprisingly business friendly. George W. Bush repeatedly granted the U.S. Chamber of Commerce's wish list. So far, the Obama administration is peppered with people from both camps.

At a roast Obama joked that he is Superman. He'll need his x-ray vision to find conflicts of interest amongst his team, much less within Congress.

But here's a shout for our super visionary leader. He has alot on his shoulders, if he plans on driving real change. The big money men want a return on their investment and America's federal government has a history of delivering. Even re-balancing that a bit in favor of the common citizen, will cause Obama much pain.

Time will prove his mettle and how much kryptonite Corporate America has. Let's hope none of those "bad cops" deliver strength sapping material to the Oval Office.

Tuesday, November 25, 2008

Obama to Evaluate Government Programs for Effectiveness

In appointing his new OMB director, President elect Barack Obama gave Peter Orszag a charge, evaluate existing government programs for effectiveness and eliminate those that do not work. This sounds great. However, Obama is following the spectacularly incompetent George W. Bush.

Bush's heavy handed, incurious management style means our current federal bureaucracy is rife with suboptimization and wrong figures. A better approach would involve identifying the aim of government and critical programs necessary to achieve that aim. Then put everyone to work on improvement.

Government and corporate leaders need to use profound knowledge to improve our economy, business operations, and government functioning. That means education on systems, knowledge, psychology, variation, and their interaction.

America used Dr. Deming's teachings during WWII, when material for manufacturing was so scarce, every bit needed use. He helped rebuild Japanese manufacturing after the war. Dr. Deming refined his teachings until his death in the mid 90's.

Our financial crisis has its roots in poor quality work, extrinsically motivated (greedy) leaders, and a government asleep at the wheel. With profound knowledge America can produce high quality goods, leaders will be transformed, and markets/jobs will grow. The time to start is now.

The aim is to provide good jobs, to grow the market, to give people the chance to do quality work. I know it's a huge job, recovering from bad leadership. But, let's not start out with large scale amputations based on Bush's mangling of our federal limbs. Try the ICU first.

Tainted Tylenol in Financial Markets

What did Johnson & Johnson do when poisoned Tylenol hit store shelves? They pulled it, all of it. That action saved the market for their painkiller.

Securitized loans, credit "peace of mind", and corporate annual reports are today's Tylenol. America's financial sector keeps cranking out products that burned the investor. They're finding few buyers. What does the public realize? I suggest they sense that:

Credit ratings mean little, given the history of investment pigs obtaining AAA ratings.

Balance sheets are suspect, due to off balance sheet items and accounting practices.

Pretend J & J kept Tylenol on the shelf and asked the federal government to buy back 5% of the stock. What would that do to public confidence? Nothing. It wouldn't impact the probability of their container holding tampered, deadly goods.

What if they J & J kept their production line going, with elevated attention to the quality of ingredients? Who would line up to buy their product? Very few, as 95% of the bad stuff remained on the shelf and the company had no idea of where tampering occurred.

Would a guarantee by the Food & Drug Administration make a difference? Very little.

The FDIC will guarantee $5 billion in corporate bonds packaged by Goldman Sachs in conjunction with Citibank and Morgan Stanley. Who's paying the bond issuance fees? If it's Uncle Sam, we're sending revenue to ex-investment houses, in addition to liquidity and capital injections.

Why should the Federal Deposit Insurance Company guarantee bank bond debt? I thought they were chartered to insurance individual depositors, not the debt of deposit institutions. NYT's Dealbook reported:

Goldman Sachs is expected to be the first firm to tap the F.D.I.C.’s new program. The F.D.I.C. on Friday approved a program to guarantee to banks’ new senior unsecured debt, potentially allowing the firms to issue debt with top “AAA” ratings.

The market could see roughly $50 billion in issuance per month until the deadline for debt issuance next June, Bank of America estimated in a report.

The Temporary Liquidity Guarantee Program is expected to fill a financing gap for banks shut out of the corporate bond market by skyrocketing yields.

We know J & J took clear, strong action to ensure a safe product to the consumer. The financial implosion is a much bigger problem, and it may not be feasible to buy back all the defective financial products or failed loans. But the Tylenol situation can point to possible consumer reactions to the government's interventions.

Poor quality killed credit and corresponding investment in credit products. The future of securitizations, credit derivatives, and corporate financial statements is profoundly unclear. Yet, they continue, with a shelf life that remains to be seen. Painkiller or market killer? Monitoring will reveal the public's decision.

TARP Levered Loans to Buy Junk Assets

Treasury Chief Hank Paulson and Fed Chair Ben Bernake aren't tapped out. The Bush team offered another $800 billion in Corporafornication, raising total interventions to $5 trillion. Treasury's Paulson levered $20 billion of TARP money into a $200 billion Federal Reserve Loan. That $200 billion will buy back securitized consumer debt, student loans, credit card debt and car loans.

Paulson left the door open for future expansion in size and scope. He presaged that commercial mortgage backed securities (CMBS) could be included.

The Carlyle Group would love to buy back affiliate CMBS debt for pennies on the dollar. Treasury slipped $153 million to Carlyle's Boston Private Financial Holdings. Apparently, the high net worth marketplace needs access to loans using taxpayer money.

Carlyle's infrastructure division would love some of that $500-700 billion looming stimulus package. In this venture, the private equity underwriter (PEU) is happy to take a government guaranteed 15% annual return, roughly half of their historical yearly profit percentage of 30%. What other divisions look to make money hand over fist from taxpayer dollars?

President elect Obama indicated a substantial stimulus package to be on the way. The Bush team decimated the federal ability to provide services directly. That means quick action must be contracted. A lobbyist frenzy occurs in Washington for the right to help "create or save" 2.5 million jobs. Note the addition of "or save" in Obama's speech today. Expectation sandbagging has begun.

The problem that got us here? Greed, leverage and federal incompetence. All are still in play, just at slightly reduced levels.

Sunday, November 23, 2008

Obama Makes His Job Harder

Besides trying to deal with a collapsing American economy, President elect Obama has to deal with potentially contentious advisers. Political pundits call his appointment of "center right" Democrats a "good cop-bad cop" pairing. How often does a bad cop restrict his/her role to the interrogation room? They don't.

Chief of Staff Rahm Emanuel and Secretary of State Hillary Clinton fit the bad cop role. Neither are the promised new blood. They are known for hard nosed, pragmatic, finger snapping politics. They have corporate ties as deep as their Clinton White House roots. Many of those lead to America's favorite private equity underwriter (PEU), The Carlyle Group. A Carlyle affiliate, catering to the high net worth marketplace just pocketed $153 million from Hank Paulson's TARP.

What other campaign promises made their way into that D.C. sewer? The 3% tax increase for people making more than $250,000 a year may not come from an Obama proposed tax law change or budget proposal. It's now predicted to occur when the Bush tax cuts expire in 2011.

How will President elect Obama control those renegade staffers, while saving the economy? Achieving his campaign promises got a lot tougher. That is, if he really wants to deliver...

Unprecedented "Meet the Press" Highlights Change

Meet the Press hadn't seen this number of "unprecedented's" since September 2005. James Baker, Richard Daley and Joe Lieberman repeatedly called our economic free fall "unprecedented." Hurricane Katrina was the 2005 "unprecedented" event.

How unprecedented are they? FEMA drilled for a "Katrina like" event in 2004. They practiced on fictitious Hurricane Pam. Practice didn't make perfect.

Numerous financial guru's predicted the economic meltdown. America's financial stewards, from the Federal Reserve to the SEC to corporate board rooms, took down our fire walls. A decade of ramped up greed and leverage led to our economic conflagration.

Financial products that cranked up returns in an up market, turned into razor blades on the way down. Numerous vaporware products disappeared in a plume of smoke. So far, I don't hear many calls for change, other than to reduce leverage a tad. A failure to learn from mistakes means we are destined to repeat them.

The peppering of "unprecedented's" implied no real change. Senator Joe Lieberman kept his Homeland Security Chair. His regret over harsh words on candidate Barack Obama seemed as sincere as Lehman Brother's Dick Fuld before Congress. Tom Brokaw did his best to get Joltin' Joe to apologize, but Lieberman wouldn't fold.

The last "unprecedented" came from none of the guests. I uttered the derogatory word when James A. Baker, III called President elect Obama's appointments "center right" of the Democratic party. Seeing his happiness with the incoming Cabinet, I felt the victim of campaign bait and switch.

When a Carlyle Group insider is happy, I'm not. Baker and company don't need to make 30% annual returns on the taxpayer's back. Many of Carlyle's affiliates are government contractors. Private equity underwriters (PEU's) ride a government greased, gravy train via their preferred taxation on carried interest.

Mr. Baker may be worried his PEU tax benefit may disappear, but another fear had his immediate attention. Systemic risk hasn't fallen, despite $4.28 trillion in federal interventions. He urged President Bush and President elect Obama to take short term action to shore up America's financial sector. Financial failure remains on the table.

Disaster capitalists use economic risk to drive down employee wages and benefits. Richard Daley promised an Obama administration would create jobs. Mr. Daley threw a sandbag in for good measure, promising to "create or save 2.5 million jobs." How will job growth/stabilization express in the corporate race to a global common denominator on pay and benefits?

The job multiplier made a Rocky IV like comeback in the last year. In the 1990's economic developers used the multiplier to highlight the impact of new jobs. The statistic showed how many times a dollar washed through a community, creating more jobs. But the U.S. Chamber of Commerce sent the job multiplier to China and India.

It substituted the dollar extender for Americans. Cheap goods meant your dollar went farther. The dollar extender champ ruled from 2000 to just two months ago. Yes, 2.1 million jobs fled America for the siren song of cheap Asian labor. The job multiplier in reverse has the public's attention, but our elected leaders remain skeptical. Congress ignores big auto's request for $25 billion in bridge financing, even though 2.5 million jobs may be at risk.

Members of Congress vilified Big Three auto executives for their mode of travel. Funny, auto execs' private planes look surprisingly similar to the fleet of private jets at this summer's Democratic National Convention.

Citibank received $25 billion from Hank Paulson's TARP. Who gives a company that kind of money to cut 50,000 jobs? Despite American taxpayer's investment in Citi, Wall Street traders drove its stock down to three dollars and change. The market bets on CitiGroup's failure.

Change is coming, like it or not. Maybe the change I voted for will manifest when I find a quarter in a parking lot. If that's all I have, banks, new cars, and politicians are irrelevant. Now, that would be unprecedented!

Saturday, November 22, 2008

Jones for Change

President elect Barack Obama rode an election wave for change. Like all curls, this one broke into a mash of whitewater. A surfboard fin can lose hold in the froth. Did Barack steer his board to center or did it uncontrollably cavitate? The results are the same.

Chevron may once again promote a Board member to National Security Adviser. Condoleezza Rice served in that role for George W. Bush. Retired General James L. Jones is rumored to fill the NSA Chief position. General. Jones sits on the boards of Chevron, Boeing, Invacare and Cross Match Technologies.

James is also president and chief executive officer of the Institute for 21st Century Energy, a policy center in affiliation with the U.S. Chamber of Commerce. They unveiled a Transition Plan for Securing America's Energy Future, an energy policy roadmap with 88 concrete recommendations and detailed time lines for President-elect Barack Obama and the 111th Congress.

Want to bet Chevron keeps their natural gas interest in Myanmar? How about Boeing getting the new Air Force refueling tanker to ensure U.S. jobs in an economic downturn? America's Government-Industrial Monstrosity is Eisenhower's MIC on steroids. It seems firmly entrenched and ready to profit from energy security, infrastructure development and health care reform. Stay tuned for change, likely better packaged and sold Corporafornication.