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Friday, December 19, 2008

Baath Revisited

Sigh. We've yet to see how serious this is, but the fact that the Maliki administration is concerned about a Baath Party resurgence is pretty frightening, That said, the Maliki administration is probably corrupt to the bone. It just goes to prove another of my long standing maxims--this from Robert M. Pirsig of Zen and the Art of Motorcycle Maintenance fame:
"There’s no villain, no ‘mean guy’ who wants them to live meaningless
lives, it’s just that the structure, the system demands it and no one is
willing to take on the formidable task of changing the structure just
because it is meaningless ... The true system, the real system, is our
present construction of systematic thought itself, rationality itself, and
if a factory is torn down but the rationality which produced it is left
standing, then that rationality will simply produce another factory."

It's just that simple. And the reason, Middle East experts were saying before we ever invaded, what a stupid idea it was. Democracy came to Europe after two thousand years of war. Democracy was exported to the Americas by the Europeans. If the Middle East wanted democracy they'd have moved to it generations ago. Eastern civilization is much older than ours in many respects. Even so, let's hope they don't produce another factory. Enlightened leadership is what they need-whether or not its democratic.

The City Sinks Deeper

So, I'm glad to see, again, I wasn't wrong. The city was filthy with Madoff's "money." The NYTimes reported that dozens of major New York developers had given this guy money. That whole building projects might be in jeopardy because there's no more collateral. I am a bit surprised--I thought it was lawyers and auditors who were mostly going to take the hit for this. Seems like the other New York thing, real-estate has come to bear. Everybody knows this guy. And the people who didn't know him personally, wished they knew him. Even the doubters.

I've heard a few things which are disturbing. Some are saying the SEC's days are numbered. Remember, one of the principal reasons for establishing the SEC was to monitor the investment houses (which they stopped doing about thirty years ago, but now really have no excuse since there are no investment houses.)

If the SEC was dismantled--there would have to be a replacement. Securities, particularly after this debacle could not go unregulated. So they'd refit it, give it a new name. But who would they hire? The same administrative staff, the same investigators. Who, afterall, could take their place? The auditors? Clearly not. A new breed of investigator has to be born. Hire me. Not only do I want to investigate fraud, I have a natural distrust of big business, but at the same time, I'm extremely idealistic. I do think there are ethical businesses. Moreover, I think that there are plenty of businesses which have philandered ethically, which can be won back.

A little shamless self promotion. So what? I observed a few months ago that accountants are trained not to care. Or, more accurately, to only rely on the information they receive. They feel that it is not their job to make sure that companies stay on the straight and narrow. Just to add up figures, and ask questions when things don't add up. They only report to the company. And if the company doesn't like it, they can just find new auditors. And the auditors don't have to report anything, and in fact, would be liable if they did. So there is no accountability for fraudalent behavior according to the normal model. The only body that regulates financial statements is the SEC. The PCAOB and FASB make rules, but no one is required to submit anything to them. And who makes their rules? The big four, and a hodgepodge of former SEC staffers.

This sounds bad. I don't think the SEC is crooked. I don't think the auditors are crooked. I don't think the PCAOB or the FASB is crooked. What I think is crooked is the idea that business, and "The Market" is a self-regulating machine. It just ain't true. And if it were--the self regulation occurs only when people are injured. When shit like this happens. Well, to a certain extent, I think that's true: people forget, and markets are cyclical. The system operates well for a time, people get comfy, forget, and then the market crashes. Ostensibly, this happens every generation. Happened in 1830s, 1840s, 1870s, 1930s (earlier for europe) 1970s, 1980s (gulp!) and today (those dates correspond loosely to economic troubles--particulary for the earlier years) So with all that, you might assume that this has to happen. And be particularly glad when it does. As it is, young"ish" investors today stand at the threshold of a really prosperous time. With all the promised regulation, we should be looking at a period of real prosperity, not market inflation. I mean a period of epic growth, like after WWII.

Not to underscore the gravity of the situation, but we are nearing the bottom. Not of the recession, but of the market bottom. Up until now, all the news we've been reading has been backdated. Meaning, we're reaping what our economic masters had sewn two-three years ago. I think there may be a couple more revelations. That the Fed has created new rules for the credit card companies speaks volumes of this. Citibank got a bailout but before the layoffs happened. I don't know what to think about that. Bad news delayed is worse news. But bad news is bad enough. Neither the insurance business nor the credit card business have really faced the music yet. Bailout or no, they will. Both are inflated, both are fairly corrupt. Again--not as in "evil" but in the fact that they've operated sub rosa for too long.
At anyrate, it's like the old Chinese curse, "May you live in interesting times." Let's hope we stay above board. I'll close with a thought I wrote to AM-NY (who declined to publish it--ever since I quarreled with the editor they've ignored me) "As for the mistaken impressions about Darwinism and adaptation, mutations are random, and though success will be determined by survival, who and what survives is largely a combination of the randomly selected attributes that make up each individual (read: mistaken analogy.) In other words, good luck" To wit. The survivors of this latest revolution will have been in the right place at the right time--that's all. The tycoons of the future will have acted.

Wednesday, December 17, 2008

Briefly on the New Budget

So we've been hearing about it for weeks, and finally Patterson released his new budget. It should surprise no one. Still, we hear the usual griping. Everything, pretty much, is being taxed. Except for two things which disappointed New Yorks keep forgetting.

1) Income Tax. HAS NOT BEEN RAISED. So as long as you spend less, stop feeding your vices, you should be ok. It may well come to Income tax being raised. Doesn't it always? But for now, be grateful.

2) Income Tax for the very rich. This I really don't get. Nothing's changed, some capital gains stuff that's all. The super rich of New York have certainly taken a hit. Their real estate and their equities have taken a nose dive. But for anyone who makes over 200k, their current tax load really isn't fair. After all, they own their property, and they're receiving all the benefits of ownership, while the majority of us wriggle in our extremely high rentals.

I'm sure Patterson had his reasons, but we ought to know them too. Let us decide whether or not to let them off the hook.

Monday, December 15, 2008

A Blog for Blogojevich--A Moment of Clarity

I had a moment of clarity this morning while shaving. Everyone is playing all high and mighty about the scandal of Rod Blogojevich attempting to sell Obama's Senate seat, but the fact of the matter is that every single governor would do the same. Oh they might not sell the seat for money, but they're selling it. It's the political process. And it's happening here in New York too. It's an appointed position. That means it's up to the state executive--not the people.

It's one thing that has surprised me about the Obama's and the DLC's choices over the cabinet appointments. Either Obama is very smart and he's eliminating competition in the Senate in his own party, or he and the Democrats are shooting themselves in the foot. There will be an election in two years, and if the wind isn't whispering, Obama, Obama, we're going to have at least four Senate seats in contest to political newcomers. That's a dangerous gamble, and a surprising one. Sure, a little personal ambition is understandable. But denuding the Senate of all its ranking Democrats is a mistake. That's why Reps are around, that's why old Senate members who've lost their seats are around. Look at Tom Daschle, a party man through and through, except when he helped impeach his own President, and lost his seat for all his good service in 2004.

I digress. Here's the thing people. In the game of politics, it's all about doing your time, or being so wealthy that you don't have to do your time. You can be rags to political riches, but you have to do your time. And everysingle Obamite, Howardian, and Clintonian who did his time on three different campaigns, who went to GWU or Georgetown and worked for his Congressman (I confess, I did it too.) Every single one of them, if he works hard, and kisses enough tuchus, will get his Party reward. That's really all Blogojevich is doing here--he got greedy and stupid by offering a price tag for the seat. But really, it just officially commodifies what everyone ought to have suspected all along.

I don't have a problem with the system. If I'd been patient, and stuck with it, and had been willing to do the time--I'd be a part of it too. But I wasn't. But this is what makes democracy. As one of the characters in Candide said, (I paraphrase) "I hate the English for their party spirit." I didn't understand that phrase until I went to a couple of College Democrat meetings in college--a breeding ground for America's next political generation--partisan, cynical, and willing to scratch anyone's back*. You can't be an automechanic or a paralegal and expect to be part of the system unless you put yourself into the system. And that means behaving like you would in any club or social activity: Reciprocation.

*One other observation about the College Dems: It's the only organization I've seen where cynicism is codified as form of zeal. How can you be zealous about cynicism? Isn't that sort of a contradiction in terms? It's not that they don't have ideals--it's just that rather than the ideal being the motivator to achieve political power, political power is the motivator for having the ideal. I suppose that's naive of me, but I've never understood the desire for political power. The love of the masses I've known well--I was an actor. But if one hates being a follower, how can one have any respect for those for whom he is the leader?

It should surprise no one. It's not news, it's not even worth your attention. Not when there are asshats like Madoff and Drier to kick around.

Saturday, December 13, 2008

This City is so Fucked

Marc S. Drier is slime. Amazing slime, slime that sticks to the wall, but still slime. Bernard L. Madoff is slime mold. Here's an example of a really smart guy, who proved the hypothesis I've been selling to nobody for years.

Nobody would buy.

I've been saying it to anybody who will listen, and for years people would tell me I was crazy. Maybe I am, but it seems to me that cheating is the rule of the jungle. Think for a second of all the myriad ways in which you cheat. You cheat on your taxes, you spent an hour buying Christmas gifts on instead of working, you stole office supplies. All really minor shit. But minor people can only steal minor shit. People like me and you, we only have the opportunity to steal pencils, or soda. But the higher up you Becket would say, "The bigger the man, the fuller he is, and the emptier." Think about it, you have a pie chart, if you cheat like 1%. Well, a pie chart of me and just about anyone else would look the same. But if my pie chart represents only a hundred dollars, only 1 dollar of that is a fraud. No one cares about a buck. But when your pie chart represents 100 million...well you get the idea.

I've had very impressive financial people look at me and scoff when I've said this before. EVERYONE IS IN ON IT. And it's not paranoia, it's not a delusional fantasy. It's a question of philosophy. Well, now it's pretty much Q.E.D. not one but every investment bank is gone now, bought, closed, or firesaled. Everyone of them was in on it. Here's the thing...and this is why those impressive people were wrong. When I told them that EVERYONE was in on it. They mistakenly conflated evil with fraud. They thought that the balance of people were good (loosely defined as not fraudalent). And I agree with them. But the question is one of perception. Everyone was selling these shitty securities. Everyone knew about it. The problem wasn't that these people were evil, that would be a ridiculous notion. There is no evil. What they were was in too deep. It was a mob mentality. The fire at the end of the hall was the knowledge that this thing was just too monstrous to stop. So why not go for all the gusto they can grab? And when things were up, who would care? They could buy that new cellphone without a second thought. I see law students and busboys with 3G phones. Seriously, and in New York, that's totally unremarked on.

That's what's so fucked up here. We're all complicit. I walk down my street, and I can point out the investment bankers. I can point out the UES moms who quit their career to raise their kids, with rocks that could take out an eye at forty yards. They took the money, and when the money keeps rolling in, you don't ask how. Go over to the gallery openings every Thursday in Chelsea. With paintings that run from $500 to $50,000 or more, who's doing the buying? We're all complicit. Go out to Brooklyn, maybe pop over to Metropolitan Ave and have a few drinks. Those trendy, scarf clad kids? They're in on it too. They might bitch and whine about the have's and the have not's, but where have they been for the last 16 years? To be sure, there are always exceptions. And none of these people (including myself) are bad or awful people. We really all just fell into complacency. Our literary critics have been warning us--so have the historians, but intellectuals are effete snobs, and they don't really contribute anything anyway.

It's times like these where I stare out at my city, and think, this place just ought to be bulldozed. You know what's worse? Having written that sentence, a shiver of fear ran through me. Of course, I want nothing at all to happen to my city. I love it, and everyone in it. Even the crooks and the frat boys, the sorostitutes, and the lawyers, i-bankers and everyone between. But in this country today. I know full well that there are people watching us. And I'm too small of a fish for people to care about now. But god help me if something happened. Can I write that? Another thing I spent the last eight years telling my conservative friends, who repeated like robots, "I've done nothing wrong, I've got nothing to hide." So what? When you can't speak for fear of reprisal, you are no longer living in a democracy.

Please Obama et. al. fix this. We need regulation, and we need to know what's going on. We need a free press that is solvent and able to withstand the rigors of litigation.

And this is just too rich, Milberg LLP, formerly known as Milberg Weiss Bershad and Schulman before three of the four went to prison, is representing the misled investors!

Wednesday, December 10, 2008

Oprah's Sizing

I am not a fan of pop culture. Not because I hate it or anything, I actually think it produces a lot of good art, and I think it says a lot about the zeitgeist of the times. I don't like it because it's part of groupthink, buying into it, talking about it, criticizing it (as I am right now) is all a part of it. So, typically, I ignore it to the best of my ability.

But I saw something that really pissed me off today. Arguably one of the wealthiest, most powerful black women is on the chopping block again because she's gained 67 pounds. This is disgusting, it's woman who did the interview, and it's largely women who are reading it. Get over yourselves. Almost all of the powerful men in the world are rotund. You'd never hear a peep about one of them. Unless they were morbidly obese, like President Taft. This is part of the culture I'll never understand. My honey watches these TV shows with thin women parading themselves around and then hates herself for being normal. Do I give a rats ass about Oprah's weight? No way. In fact, the fact that she's "ashamed" of it makes me respect her a lot less. I know this is a typically male perspective--but it's the kind of thing that I see all the time. And my sex will get the blame for it. But I don't care, except to say, don't waste my time with it. I read the gossip pages because it's a 45 minute ride to work, and there's only 20 minutes of news in the daily. And I feel guilty if I don't take a paper from my newslady in the morning.

Tuesday, December 2, 2008

Who killed Jdimytai Damour

Freakonomics did a recent post on this.

I just want to say. I blame the po-po. I hate crowds, I hate shopping, I hate getting jostled and bumped around, snarled or yelled at.

That's why I live in Manhattan.

Here in Manhattan, if you have a crowd of even a hundred people gathering, anywhere on the island, you can bet that the police will be out in force. All I can say is that the police had hours to get to the site. I don't know why they didn't. I've heard nothing yet about where the police were. I've heard Walmart blamed, I've heard the crowd (also rightly) blamed, I've even heard Jdimytai blamed for not knowing crowd control procedures.

I'd like to add a few culprits to the list. The Long Island police.

It's not Walmart's responsibility to provide security for a thousand people. That's ridiculous. I don't care much for the company, but really, this isn't their fault. Even if they did lie about the deals.

Harlem Negaissance

As some of you know, I lived in Harlem for the better part of six, ALL of that time was spent during the "Bush Boom" which was really a hold over from the "Clinton Boom" without the balanced budget and added regulation.

(Hat tip to Don Hamerman for the photo, check out his fancy photo blog. And Don, I found your photo randomly on the internet, just contact me and I'll take it down if its a problem.)

During that time, I was beaten twice, mugged once, had my cell phone stolen from me, and was chased down the street three or four times. I'm not bitter, in fact, on the one occasion I probably could have, I decided not to participate in an investigation, despite several calls from police. I knew my attackers were just teenagers, 19, 20 tops.

What really got me during those heady years of investment banker excesses and massive condos springing up from the discarded shells of old tenement buildings was that people would always tell me, "Harlem's coming back!" "Harlem's getting better," and even my old neighborhood was dubbed a fancy new marketing name, "SpaHa," for Spanish Harlem. We know that white people can't stomach spanish speaking peoples. Ink was spilled and the talk was talked.

But what really happened? Why was I so cynical? Why did I think all the rumors were bunk?

I lived it. I lived the dream, people. Harlem is a neighborhood with a lot of history, a lot of really amazing people, really spectacular family life, and it has all the issues that a lowerclass, poorly educated neighborhood has including, crime, drugs, teenpregnancy and gangs.

Like everything Bush era'd, excuse my poor pun on the word "error," (I felt I needed to explain that one) the new Harlem Renaissance was totally half-assed. Oh! I know, let's build a lot of fancy, super expensive condos that no one can afford to buy, and then, when the neighborhood becomes great, we'll be even richer! This is the way the developers thought, "If you build it, they will come." Well this ain't no field of dreams. At least not until election night. The problem with top down development is that it depends on people moving into a neighborhood because the asset itself is deemed a much higher value than its buy-in price. I looked into buying one of those condos, and there wasn't a single one under a half a million. Very pretty, very modern, all new fancy appliances, and the nearest grocery store was a rat infested, leaky roofed, oddly smelling C-Town. 15 blocks and three avenues away a beautiful pathmark lurked. But who walks 30 minutes to get to the grocery store? Who walks back? People who can afford half-million dollar condos, the feeling went. Well, they had buyers, and now they don't.

Lehman brothers bankruptcy, and the end of the investment bank took care of that. It was a vain dream anyway. For years people have been talking about a new new Harlem Renaissance, and the simple fact is that the original renaissance was an outgrowth of the beautiful, intelligent, artistic, and ingenious people who lived there, who grew up there, or moved there during the boom to contribute. Not bought there, and spent money there.

If I were a developer, and this is one of my dreams I'm sharing with you, I would have done things differently. People want to live in the West and East village because it is the center of the city. There are things to do, and things to see, not just fancy restaurants and successful businesses--that all happened later. What made people move there was the chance to do art, the chance to be a part of something amazing. And the fact that living there was dirt cheap. Nothing these days is cheap. I was talking to my uncle the other day, and when he told me that the government was practically giving Ph.Ds away when he was a young man, I could have cried. What an awful place we live in now.

The Raving Leftatic plan for Harlem: Invest in the community that lives there now. Not just the natives, but also the students, and the migrants who live there because they can't afford the nicer neighborhoods. Attract artists. Gut a building or two, make them art studios, rent control them. Talk it up, let the artists move in. There are artists there already, help them. Sponsor a yearly art fair. Let their positive, energy create something that people want to visit--not just live by. That is the secret to neighborhood revitalization. If I'd had that opportunity when I'd lived there my whole life would have been different.

The fake boom is over, but the next few years will really determine the course. Will the neighborhood go to seed again? Will Bloomberg forget it, and bring the po-po down town to protect his constituency? Or can we finally clear the way for real development. Based on real people, who live there and need it most.