Daily Archives: March 8, 2009

Obeisance is the new patriotism –

Remember “speaking truth to power?” That turns out to mean saying mean things about Dick Cheney and George Bush. Now to criticize the president is an act of treason and Wikipedia is having none of it. 

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Can OPEC really drive oil back to $50 a barrel?

That’s what the oil traders are betting, but I wonder how the Arabs can do it if the world economy is truly headed for collapse. Someone’s right here, the traders and Arabs or the dour economists. It will be interesting to see who prevails. Stay tuned.

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Dissent, the highest form of patriotism

Well it used to be. Now it’s treason!

(Hat tip, Insta pundit)

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There goes the market for North Street mansions

Russian oligarchs choke on debt, Putin lining up to take back their assets. Mr. Putin seems more interested in hunting trophy tigers than trophy Greenwich real estate. So who’s left?

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Warning: drowning men can pull down their rescuers

Or so I learned in Boy Scout life saving. This op-ed in the Times on the woes of eastern Europe sounds the same sort of alarm.

The debt crisis in Eastern Europe is much more than an economic problem. The wrenching decline in the standard of living caused by this crisis is provoking social unrest. American subprime borrowers who have had their houses foreclosed on are not — at least not yet — rioting in the streets. Workers in Eastern Europe are. The roots of democracy in the region are not deep and the specter of right-wing nationalism remains a threat.

So what is to be done? The potential approaches essentially mirror those that have been attempted in response to America’s subprime problem.

The debts of many Eastern European countries and some banks will have to be written off. Ultimately, as in the case of the American subprime debts, taxpayers will have to foot the bill. But which taxpayers? The taxpayers of Austria and Italy certainly can’t. So the burden will have to fall on the rich countries of Europe, especially Germany and France.

The response of the American government to the financial crisis has been criticized for being too slow and inadequate. But at least we have a federal budget, the national cohesion and the political machinery to get New Yorkers and Midwesterners to pay for the mistakes of homeowners in California and Florida, or to bail out a bank based in North Carolina. There is no such mechanism in Europe. It is going to require leadership of the highest order from officials in Germany and France to persuade their thrifty and prudent taxpayers to bail out foolhardy Austrian banks or Hungarian homeowners.

It’s that last sentence that gives me pause. If the author’s right, and the fate of western Europe’s economy depends on the willingness of its citizens to help out strangers in the east, God help us.

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Soaking the Rich

As explained in the San Francisco Chronicle

Even if Congress accepts all of Obama’s tax increases, deficits would remain near $1 trillion for three years. The national debt will rise from 40 percent of the nation’s output to 67 percent. And for all its declarations of honesty – and it is a vast improvement over President George W. Bush’s budgets – it still contains serious gimmicks, including rosy economic assumptions that if they prove untrue would push deficits much higher.

“What you’ve got is a context that makes a very ambitious budget strategy possible in a way that wouldn’t be possible in times we would call normal,” said Bruce Buchanan, a presidential scholar at the University of Texas. “This is a rare moment.”

But top Democratic aides conceded that Obama will need every ounce of his popularity to make his vision reality. House Republicans have shed any veneer of cooperation, and even Senate Republicans who say they want to work with him on health care and energy have profound ideological differences that will be tough to bridge.

Obama’s cap and trade plan is projected to raise about $650 billion over 10 years by selling emission quotas to businesses. The mechanism is an indirect carbon tax, and Republicans are painting a bulls-eye on it. So Obama paired the global warming tax with his Making Work Pay tax credit, so that most workers would be shielded.

“There really is no alternative that will not be portrayed as increasing a tax or increasing energy prices,” said James Horney, director of fiscal policy for the liberal Center on Budget and Policy Priorities. “It’s a very smart response to the budget crunch” and a way to shield lower-income workers from a consumption tax, he said. “Anything you do, some people are going to be unhappy about it and will fight very hard to prevent you from doing it.”

Obama uses a similar technique to make room for health care reforms, pairing unpopular tax increases with broad-based benefits. To make a $634 billion down payment on health care, Obama would limit charitable and mortgage interest deductions for individuals earning more than $200,000 and cut payments to Medicare insurers.

The administration argues that reforming health care will reduce deficits over the long haul, based on consensus that the federal government’s longer-term budget problems are driven by soaring costs in Medicare, which are linked to soaring health care costs generally. But any savings from reform, if they occur, will be in the future, while the costs of expanding coverage to 44 million uninsured will be payable immediately.

After two years of protecting her conservative Blue Dog Democrats by signing off on farm subsidies and avoiding immigration votes, Pelosi has signaled a leftward shift, warmly embracing the Obama budget as the culmination of a vision she has fought years to achieve. “We are very excited, I guess is the word,” Pelosi told liberal media representatives last week. “Now we have a president who shares our values and has the right priorities.”

She does, I don’t.

Update: The NYT’s Frank Rich takes a dim view of the recent Wall Street shenanigans, as well he should (although picking on those dolts at CNBC is almost cruel – anyone who continued to listen to them after their performance during the Dot. com bubble deserves to lose everything he owns). But he says this, too:

The true American faith endures in “Our Town.” The key word in its title is the collective “our,” just as “united” is the resonant note hit by the new president when saying the full name of the country. The notion that Americans must all rise and fall together is the ideal we still yearn to reclaim, and that a majority voted for in November. But how we get there from this economic graveyard is a challenge rapidly rivaling the one that faced Wilder’s audience in that dark late winter of 1938.[emphasis added]

My complaint, and the complaint of others, is that Obama’s plan fails precisely in this regard. It promises bread and circuses to the masses paid for by the purported “rich” – no pain, no shared sacrifice, just a feel good recovery paid for by someone else. The problem’s too big for that and while Rich is too dumb to realize that truth, Obama probably isn’t, which makes his promises that much more disgraceful.

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AIG Bailout – something for every banker

And a poke in the eye for us taxpayers. But not to worry; the boys who brought you this mess, like former Merrill guru Sylvan Chackman on Vineyard Lane are doing just fine. According to the gossip column in GT,

A fabulous birthday party took place at the stately backcountry home of Greenwich newcomers Simmone and Sylvan Chackman.

The exotic beauty Simmone celebrated her 40th with friends and family. Great food was catered by Myrna’s, and disc jockey Paul Vito spun the music.

Between the dinner and dancing, the party was on fire to the wee hours.

How come we paid for it and weren’t invited? And, just as an aside, am I being overly PC or are “newcomer” and “exotic beauty” Greenwich code for “Jew”? I hope not, but it does bring back memories of the bad old days in town.

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Return of the Youngbloods – I blame Hillary

Obama’s too young to remember them but our Secretary of State must:

Love is but a song we sing, fear’s the way we die
You can make the mountains ring, or make the angels cry
Though the bird is on the wind, you may not know why
Come on people now, smile on your brother
Everybody get together
Try to love one another right now

So now we’re loving Syria, and Iran, the Taliban and even Cuba (but not England – them we hate!). I don’t remember the peace and love thing working out in the 60’s (but the drugs were great, or so I hear) and Jimmy Carter’s reprise of the theme ended in the sands of Iran but hey, this time it might work, so I’ll watch with the same wary eye that I’m watching the Messiah try to save our economy. It’s early days, as those despised Brits are wont to say.

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Chris Dodd, Scoundrel (cont.)

Dodd's Tax Haven
Dodd’s Tax Haven

The details of Chris Dodd’s dealings keep coming, but not, of course, from the Senator himself who is as silent about his financial matters as Teddy Kennedy is about Chappaquiddick. Here’s the latest from the Hartford Courant.

It takes considerable political skill for a U.S. senator to win a presidential pardon for a friend without the traditional review by the Justice Department. Sen. Christopher Dodd moved the furtive levers of power in 2001 for Edward R. Downe, convicted of tax and securities fraud eight years before. A man will do a lot for a former real estate partner.

It was reported here two weeks ago that Downe’s real estate development partner, William “Bucky” Kessinger of Kansas City, Mo., purchased a 1,700-square-foot home in Ireland with Dodd in 1994 for $160,000. Downe’s name appeared on the transfer document filed in the Irish Land Registry as the witness to Kessinger’s signature. Kessinger owned two-thirds of the property, Dodd one-third.

Dodd’s spokesman told The Courant in 2001 that the senator and Downe, who pleaded guilty to insider trading in 1993, had been friends for many years. No one mentioned that Dodd and Downe together purchased a condominium in Washington, D.C., in 1986. Dodd bought Downe’s share 3 1/2 years later.

When Dodd owned a condominium with Downe in the 1980s, while Downe was carrying on his illegal stock scheme, no details of their arrangement were in the deed or mortgage filings.Who paid which expenses associated with owning the condominium didn’t fall into the public’s view. Neither did who used the condominium.

It raises the prospect that a senator, working much of the time in Washington, could have had his living expenses subsidized when the senator owned that real estate with a rich New York socialite. Even members of the smart set can be in only one place at a time. Downe already had homes in some of the nation’s finest neighborhoods when he bought the D.C. condominium with Dodd, who used to be called, but no more, one of the poorest members of the Senate.

Dodd was never required to name Kessinger (on Senate disclosures) as the co-owner of their house on 10 acres of waterfront property on the west coast of Ireland for the eight years they owned it together. As with the condominium, the public doesn’t know who paid the expenses associated with it when Kessinger owned two-thirds of it.

[snip]
Waterfront properties on the “Irish Riviera” don’t often come on the market. In today’s dire real estate market, a 750-square-foot, two-bedroom townhouse in nearby Roundstone is for sale for $750,000. A 900-square foot, three-bedroom semi-detached house, boasting of a view of Inishnee, the island where Dodd’s house stands high above Bertaghboy Bay, is offered for $700,000.

Dodd said through a spokesman two weeks ago that the price he paid Kessinger — $122,351, according to the Land Registry, for his two-thirds share in 2002 — was based on an appraisal. He hasn’t released it.

A presidential pardon is a rare possession, especially when the man pardoned, Downe, still owed millions to the Securities and Exchange Commission for his violations.

Rarer still, however, is the real estate developer, like Kessinger, who appears to have left hundreds of thousands of dollars in appreciated value on the table for his minority-share partner. Dodd appears to have latched onto one — and, on paper, has turned a profit like the Wall Street pirates he once loved but now disdains.

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Spec condos

sound-view-driveI’ve been watching those $3.5 million condos going up on Sound View Drive and wondering whether they’re going to sell. One went to contract last June but since the buildings aren’t completed, it hasn’t closed, and if I were the buyer, I’d be hesitant to be the only buyer in such a large project.

In favor of these units is that they seem to be quite attractive and luxurious. Against is the location – on a steep hill that trucks use as their route from the Thruway to the Post Road, downshifting as they go, and the general real estate market, which isn’t seeing much activity in this price range. The builder obviously still has the wherewithal to press on, though, and the project is drawing nearer to completion. It will be interesting to see what reception it meets when its done.

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