October 29, 2008, 9:00, 10:15 a.m.
Looking for "The Economics of Conservation," October 28, 2008? Click here.
"If You Can't Trust Your Banker . . ."
[Credit: "Shady Deal at Sunny Acres," Maverick, 2nd Season, 1958. The popular early television series, Maverick, "starring James Garner and Jack Kelly, remains the most famous and widely discussed episode of the Western comedy television series Maverick. Written by Roy Huggins and Douglas Heyes and directed by Leslie H. Martinson, this 1958 second season episode depicts gambler Bret Maverick (James Garner) being swindled by a crooked banker (John Dehner) after depositing the proceeds from a late-night poker game, then recruiting his brother Bart Maverick (Jack Kelly) to mount an elaborate sting operation to recover the money." It's also the source of two oft-quoted lines: "If you can't trust your banker, whom can you trust?" and "I'm working on it." See, "Shady Deal at Sunny Acres," wikipedia.org.]
At the outset, let me make clear that I don't mean to be questioning the trustworthiness of our local bankers (notwithstanding the physical similarity between one of them and John Dehner). The "bankers" I'm talking about are those in Washington, represented by the President, his Secretary of the Treasury, those "to get along go along" campaign-contribution-receiving members of the House and Senate, and their Wall Street collaborators.
Given that they have fallen for the same "Chicken Little, 'the sky is falling, the sky is falling'" rhetoric from Bush on the economy that he used for the Iraq War,
[Credit: Jon Stewart, "The Daily Show," September 25, 2008.]
apparently what this country needs is a Washington invasion of chiropractors to strengthen their spines.
Europe is still providing examples of how to go about this bailout responsibly.
For example, in a story of some local interest we learn that the Dutch government is bailing out the corporate parent of Cedar Rapids' AEGON USA. Associated Press, "Netherlands Gives Aegon a $3.7 Billion Bailout," New York Times, October 28, 2008 (in this morning's Gazette as, "AEGON Gets $3.7 Billion Government Investment," The Gazette, October 29, 2008, p. B7 -- apparently Europe's "bailout" is America's "investment").
Note that the European AEGON parent has canceled dividends and executive bonuses for the rest of the year.
Note also that the government has given "Dutch Uncle treatment" a whole new meaning by simply nationalizing the biggest Dutch financial institutions, ABN Amro and Fortis.
Nor has it simply given AEGON $3.7 billion. It has acquired 750 million shares of a new class of non-voting AEGON stock which, if converted to common stock would be nearly a 50% stake in the company. It will name two members of the board. The stock will pay a minimum of 8.5% annually. And if the company ever chooses to buy them back it will cost them $5.6 billion, not $3.7 billion.
Meanwhile, here in the good old U.S. of A. it looks like Secretary Paulson is weakening on his commitment to obtain taxpayer equity in exchange for the $700 billion bailout. Meanwhile, apparently the banks are taking the money -- designed to ease the credit crisis -- and instead of using it to make loans have decided they might better enrich themselves by using it to buy up other banks at a bargain, thereby creating even larger financial institutions that "we just can't afford to let fail."
And the auto companies, having already been given $25 billion (I believe), are now back in line for whatever they can get from wherever they can get it -- a part of the $700 billion "financial institutions" bailout, the additional $25 billion auto "just for the hell of it" fund, and some $5 billion from the Department of Energy for retooling to (hopefully) begin building cars that Americans would actually like to buy.
The roughly $10 billion in government funds to support a merger would be in addition to whatever funds would be allocated under an already-approved $25 billion program to provide low-interest loans to the auto industry for retooling to make more fuel-efficient cars. . . .
Moody's Investors Service cut its GM rating on Monday deeper into junk territory on the view that GM's liquidity would continue to erode into 2009. The ratings agency also cut Chrysler for similar reasons . . ..
GM has a market capitalization of just over $3 billion based on Monday's close and roughly $10 billion of outstanding debt. Chrysler's privately held auto operations were valued at zero last week by Daimler AG (DAIGn.DE) . . ..
GM's shares have slumped nearly 80 percent this year and its market value has dropped below what it was in 1929.
Jui Chakravorty Das and Kevin Krolicki, "GM seeks $10 billion in aid for merger: sources," Reuters, October 28, 2008, 12:06 p.m. ET.
Far be it from me to yield to the persuasive forces of cynicism and conspiracy, but doesn't it kind of remind you of two things:
(1) Civil disorder and riots, whether in Baghdad after our invasion or American cities 40 years ago, with store windows broken and looters running down the streets with anything that was not locked down that they can carry. Even the foxes have stopped guarding the chicken coops and opened the door to any and all to come take as many as they can carry. This Administration and their friends in Congress realize that change is most likely coming. If they intend to keep on getting they best get while the getting is good. Since when they opened the vaults at Fort Knox they discovered they were bare, and they don't want the wealthy to have to pay taxes, they've simply run up debt for our great grandchildren to pay, and then started paying this borrowed money to themselves as fast as they can between now and January 20 (Inauguration Day). Maybe not, but that's sure as hell what it looks like to me.
(2) An almost equally valuable byproduct -- certainly politically -- of this unrestrained theft from taxpayers involves one of the most effective strategies of those who would like to do away with government entirely -- except for making war (while enriching the weapons merchants). By running up astronomical levels of debt they can totally eliminate any and all "discretionary spending" by the president and Congress. Remember Bush's adviser, Grover Norquist? "To Norquist, who loves being called a revolutionary, hardly an agency of government is not worth abolishing, from the Internal Revenue Service and the Food and Drug Administration to the Education Department and the National Endowment for the Arts. 'My goal is to cut government in half in twenty-five years,' he says, 'to get it down to the size where we can drown it in the bathtub.'" Robert Dreyfuss, "Grover Norquist: 'Field Marshall' of the Bush Plan," The Nation, May 14, 2001 (online April 26, 2001).
It's a two-fer for them: riches beyond their wildest dreams of avarice, and a political body blow to any Obama Administration. After all, what will Obama's options be? ("You can't always get what you want; but you can get what you need"? Not if "Change We Need" is "Change We Can't Afford.")
1. He can capitulate to the neocons' strategy; fail to put any of his proposals in place, and cut back even more on the few social programs that still exist, further extending the gap between rich and poor and driving America ever closer to third-world demographics.
2. He can, irresponsibly, increase the national debt beyond the $10 trillion or more that Bush is leaving for him -- and the $55 trillion of unfunded future obligations -- and just hope that the Chinese, and other peoples with greater inclination to save than Americans, will continue to loan us money.
3. He can (a) pray for an economic recovery sufficient to radically increase federal tax revenues (without increasing tax rates), using the money to both pay down debt and provide at least pilot project-level funding for new programs, or (b) increase tax rates notwithstanding the lack of economic recovery.
There may be other options, but those are the only ones that immediately occur to me.
Of course, I may be too cynical. After all, "If you can't trust your banker, whom can you trust?"
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July 15, 2007, 11:45 a.m.
Note: If there is any reason why you might want to know this, within the past 24 hours [from the morning of July 16] someone has kindly translated the following into German.
Bicycling: Introduction
Thirty-six years ago, caught up in the environmental movement of that time and enjoying my 15 minutes of fame, I decided to see if I could contribute to creating a year in which more bicycles than automobiles would be sold in America. (The goal was achieved.)
I had reported somewhere (somewhere I can't now find on the Internet) that the average automobile driver invests 1500 hours a year in their automobile. That includes the driving, visits to the gas pump, mechanic, motor vehicle and driver's licensing agencies -- and the hours it takes to earn the money to pay for the vehicle, gas and oil, repairs, insurance, taxes and licensing. At that time the average driving distance was 7500 miles a year. Thus, I argued you were only making 5 miles an hour with this arrangement -- a speed you could have walked in the same time once in good condition. Clearly, the reduced cost, and increased speed, of bicycling make it the benefit-cost "best buy."
Bicycling is very much in the news these days as well. We had "Bike to Work Week," "Live Earth" caused some reflection about the impact of internal combustion engines (and the pedal power alternative), and next week will be the 35th year that a population of bicyclists (larger than most Iowa towns, including some they pass through) will traverse the State of Iowa from the Missouri to the Mississippi River in an annual event called "RAGBRAI."
All told, I thought it might be interesting to some readers to see for the first time (or re-read) a brief example of what I was writing about bicycling 35 years ago.
The joys of bicycling became a major part of an article I wrote for the Saturday Review of Literature at that time. Nichiolas Johnson, "Test Pattern for Living," Saturday Review, May 29, 1971, p. 12. A year later it had become a book by the same name, Nicholas Johnson, Test Patter for Living (New York: Bantam, 1972) (available in full text from one of my Web sites).
Being the early 1970s and all, the Introduction was sheet music and each page of text (the odd numbered pages) was juxtaposed with a page of quotes (on the even numbered pages) related to the text. The bicycling material from the Saturday Review became Chapter 7, "Antidote to Automobiles." (Should anyone care, the pagination from the book is retained, as immediately below with "# p. 110#.")
Here it is, beginning with the first, even-numbered, page of quotes:
Antidote to Automobiles
# p. 110 #
We might have to slow down a little or perhaps even sit quiet occasionally to develop better taste. One can't think very deeply at 70 miles an hour.
-C. E. Warne
My new pattern requires renting new cars at the airports as needed. I am progressively ceasing to own things, not on a political-schism basis, as for instance Henry George's ideology, but simply on a practical basis. Possession is becoming progressively burdensome and wasteful and therefore obsolete.
-R. Buckminster Fuller
When you drive a car, you drive a reflection of your self. And, in the case of the 1971 MGB, it's a reflection of someone very special.
-MG advertisement in Time
# # #
# p. 111 #
So far, we have approached alternate life styles almost in terms of hedonism: What feels best for you? What will remove the pain of living in a corporate state -- other than the drug life (whether alcohol, tranquilizers, or others) that only brings more ultimate pain? But what we so often discover is that the very products, activities, and attitudes that make you feel better also have significant social advantages: They use less of our nation's precious natural resources, they pollute less, they make less noise, they add to the pleasure of others, they enable each of us to live in a society in which we can grow in individual worth and fulfillment, they are more aesthetically pleasing, they make for better citizenship, and they are even more economical. Take bicycles, for example.
I ride a bicycle -- not because I hate General Motors but haven't the courage to bomb an auto plant. I don't do it as a gesture of great stoicism and personal sacrifice. I am not even engaged, necessarily, in an act of political protest over that company's responsibility for most of the air pollution by tonnage in the United States. It's like finally giving up cigarettes. You just wake up one morning and realize you don't want to start the day with another automobile. Cigarette smoking is not a pleasure, it's a business. In the same way, you finally come to realize that you don't need General Motors, they need you. They need you to drive their cars for them. You are driving for Detroit and paying them to do it. Automobiles are just a part of your life that's over, that's all. No hard feelings. You've just moved on to something else. From now on you just use their buses, taxis, and rental cars when they suit your
# p. 112 #
The most natural form of locomotion, walking has been In use since before the Invention of the wheel and the discovery of fire. Reliable and totally non-polluting, it offers convenience -- no parking, no cost. Invigorating, it promotes health and gives you the chance to think.
-Paul Swatek
Automobiles insulate man not only from the environment but from human contact as well. They permit only most limited types of interaction, usually competitive, aggressive, and destructive. If people are to be brought together again, given a chance to get acquainted with each other and involved in nature, some fundamental solutions must be found to the problems posed by the automobile.
-Edward T. Hall
ANNOUNCER: Sidney spent Sundays shelling at the seashore. Then Sidney started digging the Mustang -- the great original . . .. Now Sidney's making waves all over. Last week he saved three bathing beauties. (And they all could swim better than Sidney!) Only Mustang makes it happen!
-a television commercial
# p. 113 #
convenience. You don't keep one for them that you have to house, feed and water, insure, and care for.
You ride a bicycle because it feels good. The air feels good on your body; even the rain feels good. The blood starts moving around your body, and pretty soon it gets to your head, and, glory be, your head feels good. You start noticing things. You look until you really see. You hear things, and smell smells, you never knew were there. You start whistling nice little original tunes to suit the moment. Words start getting caught in the web of poetry in your mind. And there's a nice feeling, too, in knowing you're doing a fundamental life thing for yourself: transportation. You got a little bit of your life back! And the thing you use is simple, functional, and relatively cheap. You want one that fits you and rides smoothly, but with proper care and a few parts it should last almost forever. Your satisfaction comes from within you, not from the envy or jealousy of others. (Although you are entitled to feel a little smug during rush hours, knowing you are also making better time than most of the people in cars.)
On those occasions when I am not able to cycle through the parks or along the canal -- because the paths are rough with ice or muddy from rain or melting snow -- bicycling enables me to keep closer to the street people: folks waiting for buses or to cross streets, street sweepers, policemen, school "patrols," men unloading trucks. Needless to say, you cannot claim any depth of understanding as a result of such momentary and chance encounters, but by the time I get to the office I do somehow have the sense that I have a much better feeling for the mood of the city that day than if I had come to my office in a chauffeur-driven government limou-
# p. 114 #
On a different speed scale, bicycles could move 2.8 times as many people per amount of space. If a bicycler can make 10 miles an hour, the car would have to exceed 28 mph to rack up more passenger miles on the same system of streets. But the New York City average speed for cars during rush hour is only 8.5 mph, 13 mph on the feeder roads. It's a fact that today in many cities you can make better time aboard a bicycle than in a car.
-Paul Swatek
Make your second car a bicycle.
Consider the advantages that the bicycle has to offer -- low cost, no pollution, and convenient to park.
For under $50 you can get a bicycle fitted with enough trimmings to make it practical for going shopping and carrying a small child. The cheapest car costs about thirty times that.
A bicycle is also inexpensive to operate, maintain, and insure.
Bicycles are quieter than any form of motorized transportation, produce no pollution, and use up no fuel.
A bicycle takes up about 1/30th the parking space of a car.
In city traffic today, the bicycle is often faster than the car or bus.
Bicycles give the rider the sort of healthy exercise that many Americans usually do not get.
Riding a bicycle makes it possible to get a better appreciation of a beautiful day, or a pleasant ride through the park.
. . . The New York Times quoted a 32-year-old millionaire who pedals up Fifth Avenue to social engagements in a dinner jacket as explaining, "It's much easier than fussing with a chauffeur."
-Paul Swatek
# p. 115 #
sine. Although I am willing to brave the traffic and exhaust, I am aware it is dangerous. I think bicycles ought to be accorded a preferred position in the city's transportation system. At the very least, they deserve an even break.
Notice that bicycle riding also has some significant social advantages over the automobile. Cars unnecessarily kill sixty thousand people every year, permanently maim another one hundred and seventy thousand, and injure three and a half million more. The automobile accounts for at least 60 percent of the total air pollution in the United States by tonnage -- as high as 85 percent in some urban areas -- and 91 percent of all carbon-monoxide pollution; it creates about nine hundred pounds of pollution for every person every year. One million acres of land are paved each year; there is now a mile of road for each square mile of land. The concrete used in our Interstate Highway System would build six sidewalks to the moon. Even so, everyone is familiar with the clogged streets and parking problems -- not to mention the unconscionable rates charged by the parking garages. Automobile transportation is the largest single consumer of the resources used in our nation's total annual output of energy. It is an economic drain on consumers -- in no way aided by auto companies that deliberately build bumpers weaker than they were fifty years ago in order to contribute to an unnecessary bumper-repair bill in excess of one billion dollars annually.
The bicycle is a model citizen, by comparison.
The bicycle does not kill or maim; it does not pollute; it does not deplete natural resources; it makes no noise; it takes a great deal less space; and it is very much cheaper. (You can buy a brand new bicycle for
# p. 116 #
Commuting by bicycle? Is this some kind of put-on? It may sound like a joke to motor-minded America, but in the rest of the world nobody is laughing. In countries that are willing to take it seriously, the bicycle [is] transportation. Switzerland, for example, which traditionally places a high value on peace of mind and purity of air, has more bicycles than automobiles. In Amsterdam -- a national capital with roughly the same population and climatic conditions as Washington, D.C. -- 150,000 people ride bikes to work every day. Hundreds of thousands more commute by bicycle in other European cities. The same is true in much of Africa and Asia.
-Thomas R. Reid, III
This year an estimated 10 million bicycles will be sold, compared to a projected 8.6 million new cars.
-Friends of the Earth
# p. 117 #
little more than what it costs to operate an automobile for two weeks.) Although the bicycle makes a direct assault on four great problems that plague the modern city -- traffic, noise, parking, and pollution -- urban planners have overlooked it in their search for solutions to the urban transportation crisis.
It is more than ironic that America can invest so much stock faith and rhetoric in the competitive marketplace of commerce and yet ignore the "marketplace of ideas" (to use a phrase by Mr. Justice Holmes) by tolerating the television monopoly that is used to merchandise Detroit's peculiar dreams of the appropriate automotive life style -- with all that life style's attendant social ills. My own commission, the Federal Communications Commission, has been instrumental in encouraging broadcasters' censoring off the airwaves the messages from ecology groups (like Friends of the Earth) that would cry out against the urban devastation being wrought by Detroit's automobiles. (The FCC decision, fortunately, has been substantially reversed by the U.S. Court of Appeals.) In perhaps one of the greatest advertising overkills of all time, we Americans are being grossly oversold an automotive product and life style (bigger, faster, sexier cars) that we neither need nor may really want, and that will surely eventually kill us with its exhaust by-products and lethargy-induced heart attacks, if it does not get us first in a crash. This may serve the corporate profits of the automotive, oil, steel, cement, and road-building industries, but it is shortchanging the American people.
There are other ways to get around.
# # #
It's nice to see such thinking coming back in style a little over a generation later. Now if only we could substitute a system of public financing of elections for our "best legislators money can buy" they, too, could act upon such common sense and solve our multiple problems simultaneously: wars for oil in the Middle East, with their attendant disproportionate share of the federal budget, global warming, heart disease and obesity.
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