The man came from the east, and rode aboard a midnight black steed, with angry fire in its eyes. The steed seemed reluctant to allow anyone but its rider to even get close to it. The mount whinnied uneasily, and lived for moments it could swoop in and, with its rider cause confusion and destruction. Once its rider saddled up, they were unstoppable. Always riding all-out, and never looking back, they rode without care nor conscience.
One of the most infamous raids, that so many remember, came one day in the 90s, in the middle of the country. Mitt-ila with his steed, Bain, came to the steel mill, licking his lips, and casing everything that he would soon own and be able to plunder and turn asunder. Sparks flew from the horse’s hooves as they rode onto the grounds. The horse and its master began the blood-letting – the guild members, their pay, the equipment – they began laying waste to everything in sight…Soon, their nefarious plans were complete, and the tiny factory was no more.
What is this? This is the Newt-would-approve-if-he-read-it-version of Mitt Romney’s time at Bain Capital. This is the, politically-expedient version of what happened in Kansas City. Mitt of course, the ardent anti-capitalist and destroyer of all that he touched, only wanted the companies Bain invested in for their liquidity values, right? I mean, why would anyone invest in a company that they may be able to resurrect, and restore to profitability (and make far more money, than just relying on the liquidity value)? Once a company is seen to have its best days behind it, the person who attributes this “un-profitable operating” designation could never have any ways of turning it around – its only value is in plundering anything and everything that still has any value. Right? So it is raid and plunder away.
Except – that is not always the way that business happens. I would venture to guess it is seldom that a capital company step in and buys a company solely for its liquid assets, before it has declared bankruptcy, when the investing company can buy it for a song. That seems like paying extra for the “privilege” of going through bankruptcy proceedings and haggling with creditors. With the intention of retrofitting and upgrading the facilities at Kansas City located “GST Steel”, Bain made investments and attempted to turn the troubled steelmaker around. After investments of $100 million were sunk into the plant, due to myriad mismanagement issues, tons of cheap Chinese-made steel (made and sold at a loss, to gain market share), and the debt-load created to save the plant, it still had to be closed. 750 people lost their jobs as a result.
It should be mentioned, but seldom seems to be, that the Chinese steel is probably more to blame for GST’s failure than any other factors, including: Bain Capital’s “raiding”, more competitive American steel foundries, and obsolescing equipment. Add to that, some of the most misguided management that I have ever read about (like hiring managers for this steel plant, that had previously worked in retail for Wal-Mart), and it appears that the factory was always doomed. Some 40+ other American steel companies went under in the same time GST was slowly rusting away.
My main issues with the attack of Romney (and attacks of him, under the guise of attacks of Bain) are the fact that supposed conservative and right-wing candidates are making the majority of them. The fact that some are using Romney’s time at Bain as a way to compare him to Bernie Madoff, and his criminal Ponzi scheme (that was James Clyburn), is also disheartening. As a matter of fact, Mitt wasn’t even with Bain at the time GST finally gasped and was shuttered. Now it’s like all hands on deck for a thrashing of the mechanism that built this country, and gave so many people the lives we enjoy.
The way that I see it, if a person is going to attack a function of capitalism, and stand behind their point, whether it is legitimate or not, it would also mean that the same arbitrary condemnation could apply to any function of capitalism. You don’t like paying some of your bills – then don’t, because you think it’s “unfair.” You don’t like having to pay a manufacturers’ makeup? Well, don’t pay it then – you’ve deemed it “unfair” too. When we slip into a mindset of the left, where, this is fair, that is unfair, this group over here has more than you (and you really deserve it more than they do), and that some big, bad, government boogie-man is piling on with those filthy rich fat cats, it is easy to find yourself getting angry. The trick is to channel that anger and frustration – almost like using that destructive feeling for something…Creative.
So, beginning with a CBS, 60 Minutes exposé this past Sunday evening, politicians began scrambling to attempt to explain their habit of using inside information to make themselves rich. So far, the biggest names involved are: former Speaker of the House, Nancy Pelosi, Chief of Staff, Rahm Emmanuel, Senator Diane Feinstein, current Speaker of the House, John Boehner, and Representative Spencer Bachus. While the posts held by Pelosi and Emmanuel seem to lend the most leverage to playing the market unfairly, Bachus finds himself being held accountable by his own party. His seeming lack of knowledge of the stock market evaporated after he joined the House of Representatives.
Got a hot tip on how a new law’s fine print may affect a company, or how companies may benefit from pending legislation? Call your broker. While you are a member of the U.S. Congress, unbelievably, there is no rule against profiting. CBS.com notes, “Out of 975 federal entities, Congress and the Supreme Court are the only two that have no rules or laws prohibiting them from trading securities based on nonpublic information.” Things that have gotten traders on Wall Street hauled into jail, mean nothing to legislators in the United States. Raj Rajaratnam must be banging his head on his desk, knowing that he could have beat his insider trading case, if only he had run and won a Congressional seat first. For his efforts, Rajaratnam is estimated to have made somewhere around $19.7 million.
The massive amount of backlash against these practices has lead to Rick Perry producing a new advertisement saying legislators guilty of these practices should be thrown into jail. Senators Scott Brown(R-MA) and Kristin Gillibrand (D-NY) have introduced legislation to prevent Congressman from partaking of the money-making activities. The “Stop Trading On Congressional Knowledge” or STOCK Act of 2011, will be introduced today. It bars not only legislative members from profiting on their inside knowledge, but executive employees as well. That would apply to the former Chief of Staff, Rahm Emmanuel, who made a bundle dumping Fannie Mae stock before the agency crashed and burned during the sub-prime mortgage crisis.
It is far from a partisan issue – everybody, it seems, is taking advantage of the inside info. Spencer Bachus is said to have shorted the market in 2008, just as the entire market fall hard. Andrew Breitbart has both lead the charge, calling for Bachus’ resignation, and closely monitored ongoing information about all the indicated, enriched legislators. Senator Feinstein invested $1 million in a biotech start-up, shortly before the company received a $24 million government grant. The following year, the company held an IPO where they netted $85 million.
Even putting stocks into a blind trust may not be enough of a bulwark against trading on privileged information – all a legislator would have to do is call up the holder of the securities, and tip-toe around subject matter that would affect the portfolio. A sort of “wink-wink, nudge-nudge”, buy or sell signal. Plausible deniability would be the order of the day. In the past, there has been legislation introduced in the House of Representatives attempting to ban Congressional insider trading. It never received more than 14 supporters.
As I sit here, somewhat stuck for a reason to write a post this week, and bemoan the fact our “leaders” in Washington D.C. act so completely inept, I heard an update on the administration’s plan to release an additional $5.5 billion by this time tomorrow, to “green” companies (H/T CNBC). This, despite the previous fiasco with California solar panel manufacturer, Solyndra. The administration continues to spend massive amounts of taxpayer capital as what amounts to venture capital. Of course, as more detail comes out on how the deals and loan rearrangements for Solyndra were handled, it has become apparent that venture capitalists would not have been so careless with funds that were their own. This continued path of carelessness and ineptitude has this blogger wondering – is this administration really that clueless, that they would double down over again on failed policy, not realizing what was happening, all the while building a case for their naysayers to claim there was crony capitalism at play? Or, more frighteningly, the administration does know what is going on, yet does not care?
Examples of Missing Leadership?
Examples of the missing leadership of this administration grow by the day. In my mind, the first failure was failure to seize on the groundswell of the “Green Revolution” in Iran – the president waited and waited. Given the best opportunity the United States has had in some 30 years to press for Iranian regime change, and our president does nothing. The president waited so long to even issue a statement for the Egyptian uprising, that when he did, it amounted to little more than lip service. He refuses to reconsider any of his failed policies, and seems to want to double down on most. He is the poorest example of “out of sight, out of mind” we have ever seen in the Oval Office.
He finally decided to commit NATO aircraft to the Libyan cause after Gaddafi threatened to blow up Tripoli and resist any threat to his despotic regime. While this seems like the president has finally made a tough decision to commit military power where he thought it was needed, in doing so, it resulted in two serious consequences: he broke the War Powers Act, having not gotten Congressional approval for the military action. Another, very serious problem, is that some 20,000 missiles may be missing from Libyan stockpiles. These missiles are the ground-to-air variety, that can be used to bring down passenger aircraft by terrorists, or perhaps even converted for use as IEDs in other theaters.
As a result of the Alcohol, Tobacco, and Firearms’ “Operation Fast & Furious”, one Immigration and Customs Enforcement agent was gunned down in Mexico, and a United States Border Agent was gunned down in Arizona. The brilliant idea behind the plan was to arm Mexican drug and gun smugglers, and then somehow track those guns via serial number. As of today, the only actions taken against the implicated parties in the administration have been some resignations, and reshuffling of the same personnel responsible for this plan. When Congress (Darrell Issa) tried to obtain documents to investigate the scandal, they were redacted to the point of appearing like a piece of black construction paper.
Finally, the president continually touted the benefits of green technologies, and how it would build the future, and raise us out of the economic downturn we are in. After being closely connected to the principal private investor of Solyndra, and even holding a press conference at the factory, he has high-tailed it away from ties to the company. Perhaps even more telling, is that he has now chosen a completely different tack, and is touting petroleum and chemical based solutions – that is, paving new roads (with asphalt and tars, of course), and rebuilding bridges (with various weatherproofing chemicals/paints).
With all this occurring, the president now attacks his own base – “Take your slippers off…put your boots on…”, and for their part, they attacked him back (Maxine Waters said she did not know who he was talking to). It seems like the left is bordering on mutiny, and it’s little surprise to me. After all, they have been without a leader of any sort for nearly three years now…
While the debt ceiling talks roll on, in the summer of America’s discontent, the left continues to suffer from serious cases of nonsense and double talk. The various news sources do their best to put a positive spin on the impasse, continually assuring us that the parties involved are very close to a deal, only to have holes shot into their reports by John Boehner, who claims the president’s proposal and his own are light-years from agreement. One side says that they simply must have tax increases to fund liabilities, or else Social Security check delivery cannot be assured (which I believe is nothing more than an easily checked, and debunked lie). The left threatens that soldiers may not receive their pay or receive vital weapons and equipment they need. The list goes on and on. I am beginning to think democrats actually believe that if it weren’t for their presence in the chambers of Congress, the sun may not rise in the east one morning…It’s amazing to what lengths they are stretching rhetoric and rationality when they cannot get their way or get Americans to believe them.
Various left wing pundits have taken to using particularly vicious and vindictive slurs and attacks. Whether it’s MSNBC’s Ed Schultz, Martin Bashir, or Keith Olbermann, the left seems all too willing to just say, “Hey, the hell with intelligent discourse – we on the left got nothin’, so let’s jump into the mud!” Name calling and ad hominem attacks now seem to be the left’s standard operating procedure. Targeting private citizens also seems to have become a tactic that they enjoy using – favorite targets include people like: Rush Limbaugh, Sarah Palin (who has still not entered the presidential race), the favorite boogeymen of left – the Koch brothers. Apparently, targeting the people who they merely identify as threats somehow makes it alright to use the distasteful and disgusting methods that they do.
David Plouffe, advisor to the president, recently went as far as claiming that Americans will not vote one way or another based on the economy. I will go as far as giving him credit that his belief may have worked in the 2008 presidential election (when the ambiguous “Hope & Change” ruled the day), but I doubt democrats will be able to spin fast enough to use tactics like those ever again. Two years of empty promise and a pattern of disappointing results has killed the mantra “Hope & Change,” and it will be retired in infamy and disgust. I wonder just what Plouffe and others believe will lead Americans to vote for the president’s re-election? They should hope the electors either have poor short-term memories, or have been living in a cave for the past two years.
The left’s nonsensical and indefensible positions on many issues run contrary to what most Americans thought they would ever see. Things as simple as cutting spending to make the federal budget more tenable do not even seem to be subject to rational thought anymore. Joe Biden famously claimed the way into the mess, is the same as the way out. I know, I know – what? To me, the lowly, typical, American idiot that the left must simplify things for, this is tantamount to shooting someone to cure their gunshot wound. This type of belief and behavior seem to be endemic of the entire left.
I shudder when I think about the burgeoning scandal that the Attorney General Eric Holder and A.T.F. has committed. Again, it’s the same rationale as Vice President Biden used: the way into the mess is the same as the way out. Guns, purported to be bought from gun dealers and other sellers in the United States, were being smuggled into Mexico, for use by any number of warring Mexican drug cartels. So, to stem the tide of guns into Mexico, did the Justice Department think it was smart to enforce gun regulations already on the books? Of course not, it thought it was far wiser to start its own program of smuggling guns out of the United States and into Mexico, and tracking them via serial numbers, to find their exchange vectors. Never mind that technology would allow them to implant tracking bugs into the stocks or other parts of the guns, or more significantly – that the whole plan is insanely difficult to complete and seemingly carelessly administered, they went ahead, and carried it out, self-assured of its brilliance. Instead of learning of the tracks of the guns, they have found them all over the southwest, both in the United States and Mexico, and they have managed to get numerous United States agents killed. It worries me if this program was thought to be a great idea – what in God’s name are they executing now, and how bad will the black eye it gives to America look?
“…and I’m here to help”. These words by Ronald Reagan were claimed to be the “nine most terrifying words in the English language”. Simple in its approach, deep in its implication, he very well could be right. I am hard pressed to come up with a situation which government has made better when they have finally decided to get involved. Wonderful uses of the rights and privileges granted to the federal government pale when compared to the abuses and wastes of the same federal government. Using federal troops to break racist policies in places like Little Rock in the Civil Rights era? That was a wonderful use of the federal government by President Eisenhower. I guess you could contrast that with the role of federal government in the Waco tragedy.
It is when the government seeks to use its enforcement powers and ability to compel people to act differently, that I take offense – and I think many other Americans should too. I don’t know about you, but I have not felt as ordered about by someone since I was in grade school. It seems as though the leaders of the last few years have felt it was in their own executive or legislative rights to tell (not ask) the American people what they may or may not do. Few to no judicial challenges for the most part, seem to only have encouraged them to continually push their boundaries onto the people, without critically thinking how future leaders may warp the current rules to suit their own “mandates” to rule their constituents. It seems as though even local governments are getting in on the act, passing and carrying out rules and regulations that have shaky bases for their existence.
Locally, I have seen bath salts recently banned – because the good legislators realize what a threat they pose to moist, supple skin? No, because people with nothing better to do were mashing the salts and then snorting them to get high. Brilliant. So, ostensibly, to lower healthcare costs and prevent otherwise idiotic people from snorting their beauty products – no bath salts for anyone! It is a good thing that the active ingredients that cause the highs are not found in anything else, or the government will have to start banning things like blush or Chapstick. Also, I am pretty sure that the strung out people, so desperate for their fix will not turn to either something far stronger or more damaging, to get that fix.
In cities across the nation, local governments have taken it upon themselves to ban the use of trans-fats in foods. Whether or not anyone has weighed the healthcare money saved by cleaning up greasy spoons, and weighed it against the costs of the real junk food junkies who might drive out of the locality to get their junk food fix, or simply eat something as bad from a bag, is unknown to me. New York has passed a slew of laws, trying to force people to act one way or another. Already seeing $5+ packs of cigarettes still being bought and smoked, they thought it would be a good idea to try to ban the actual act of smoking them nearly everywhere that they could. Sounds great, right – I mean who wants to suck some hacking, coughing, phlegm-y, smoker’s breath, right? So in the name of those put out by attending places that they know will have smokers, they have decided that their own rights are more important than the smokers’.
All these rules seem to be simply designed to affect behaviors. The biggest gripe I have, besides the obvious treading upon rights, is the enforcement mechanisms for the usually asinine government plans. Either an existing entity, local or state police, or a newly invented body, must enforce these rules from on high. If it is the existing entity – is this really a good way to change the way they spend their time? If it’s a newly invented entity, is it really a good thing to waste money on? The thing is, far too often, to me, there is no entity more subject to the laws of unintended consequence, than government. Pass something, then maybe the people will not whine too loudly about it, and then pass some more. No problem — heck, a caveman could do it (and haven’t the Weiner and Lee scandals proven that?)
Well, of course it’s the economy dragging down the president’s poll numbers. Rasmussen reports that the president currently has a -18 approval rating, even as rumors of a double-dip recession grow. The spring and summer has seen his approval rating trend sideways in the best of times, and far more often, downwards. The initial nudge he got from the elimination of America’s enemy number 1, Osama Bin Laden, has evaporated. The reality of Americans’ paychecks (if they still have them) staying stagnant, while food and goods prices rise, has hit home in a big way. Crude oil has broken through the $100 mark, and upset Americans even more, as it refuses to retreat to the $75 level we enjoyed just a year ago. The administration again has seen its economic advisers shuffled, leaving failure in their wake.
For all the administration’s tweaks, quick fixes, bailouts, and creative accounting tricks, the nation still finds itself with a stubborn 9+% unemployment rate, and they try like hell to find any narrow ribbons of hope amidst the mess. Policy makers in Washington continue to press their “solution” to the growing deficit by claiming increased tax income will somehow fix the mess (all while they continue to spend, mind you). This is after their claim that the stimulus would keep unemployment below 8%. The truth is, the only way that they are going to get increased tax revenue is to give some tax breaks to get people spending. As things are, merely increasing tax burdens aren’t going to do anything with a stagnant economy, where less goods are being bought. This means the liberals would probably tax income more. But, wait, there is an election coming up – is the president foolish enough to risk his “mandate” for liberalism on his eroding people’s paychecks? I doubt it, especially not with a weak approval rating.
So, what does the Obama administration do? They claim that big business, their favorite boogey-man, is hoarding money, not spending it, but using it for bonuses and to make the president look bad. Wait, business is hoarding the money, and giving it away? Yes, those are the claims from the left. That business is conspiring to make the president seem like a poor economic steward – that’s the party line. It couldn’t be the spate of insanely damaging legislation passed over the democrat’s years with a legislative plurality, could it? No… So how to get some of that big business money? Tax them, of course! But then, we are back to my conundrum of inactivity not providing an action for a tax to be levied.
So, as the president pays America lip-service, telling us that business is the boogey-man, and that we need jobs, Americans continue to grow further incensed and resistant to he and his party’s rhetoric. November should have been a huge clarion call to the democrats, but they seem unwilling or unable to comprehend the fact that their policies were largely rejected. America spoke loudly at ballot boxes, and yet democrats see something in the economic darkness they speed headlong into.
The GOP says that the reason for the lack of economic turn-around is uncertainty. Spending a short time on various financial channels seems to bear this out – there is no talk of a huge, conspiratorial plan to “make the president look foolish.” The simple fact is, that beyond setting basic guidelines to how individuals should act in an economy, government cannot simply issue an order to behave in a certain way (as they’ve tried with Obamacare), and expect people to follow blindly it, meanwhile having the fiat affect an economy whichever way they desire. The bottom line is this: it’s the economy doing what it’s naturally going to do – anyone careless enough to try and get in its way is going to get run over – or run out of office.
The most benefiting answer for “when should we drill?”, although completely unworkable, would have been “ten years ago”. Since that has been made continuously unfeasible by various politicians and special interest groups, now is as good a time as any to begin (any armchair economist will tell you that as something becomes more scarce, its price will rise, as will demand for the resource). ”Where”, you may wonder? Well, anywhere that the U.S. Geological Survey even suspects that might be a pocket of oil. There is so much federal land that sits either idle or having received a protected status, will not be tapped, even as oil and gasoline prices continue to soar upward.
Americans sit on massive amounts of natural resources, that, if we were to begin seriously exploring and utilizing, could have the ability to affect prices downward. With the current administration’s rhetoric about environmentalism and “green jobs”, the amount of oil domestically produced could help the country ween its way onto another energy source (which escapes me now, but I am sure the administration policy makers and yes-men will come up with something comparable to the gasoline engine in their last two years in office…)
Let’s start with everyone’s favorite oil patch – way up north, in Alaska, it’s the Alaskan National Wildlife Refuge. Yes, it’s that green tundra with a half-frozen stream above. Apparently, no companies are currently able to drill because doing so may affect the calving grounds of the Porcupine Caribou. According to the U.S. Energy Information Administration, there are at best 5.7 billion barrels of oil beneath the permafrost of ANWR. Gamblers think there may be as much as 16.0 billion barrels, waiting to be tapped.  Whether people realize it or not, drilling was actually approved in ANWR, in 1996, but then-president Bill Clinton vetoed the measure. That’s right, we could have been driving around in our cars, burning sweet Alaskan crude for four years now.
Another big potential oil field is down in the northern part of the Lower 48 – the Bakken Formation, stretching across Montana and North Dakota. The unrealized oil from this region is conservatively estimated to be around 3.6+ billion barrels.  The area had previously been identified as oil-rich, but U.S.G.S. estimates are know believed to have been too low. Add to that, North Dakota has enacted a tax break for drilling, and now the region is finally realizing its potential – in fact, the Bakken field in Montana has more than doubled previous Montanan oil production.
One last area, amongst many resource-rich regions in the Continental United States, is the Anadarko Basin, reaching from Colorado, into Oklahoma, Texas, and Kansas. This deposit is a little different. Instead of having the formerly mentioned regions’ massive oil reserves, the Anadarko Basin “only” has 495 million barrels of crude. But it contains some of the nation’s largest natural gas reserves – with 27 trillion cubic feet of the stuff! To put this in perspective, that amount of natural gas could sate Americans’ natural gas demand for over one million years(if current annual demand holds steady). Such a cheap and plentiful supply, and it’s only now really being explored and extracted. Using various processes, natural gas can actually be converted into a liquid fuel substitute. (Using something called the Fischer-Tropsch process, invented and used in World War II Germany, sounds promising)
When it’s all said and done, I think that there is really no reason for this country to be so beholden to despots and harm-doers (both here AND abroad). The Trans-Alaskan pipeline was supposed to endanger wildlife too, and yet now we find those same threatened caribou and other fauna, happily munch lichens and scrub underneath those heated pipes. Eastern Montana, western North Dakota, and north-of-the-Arctic-Circle-Alaska aren’t exactly bustling places, and the companies seeking to extract and cash in on the resources aren’t going to endanger their leases just to cut some corners for a quick buck – why risk billions to save a hundred thousand? Laws already in place are sufficient deterrents to environment-wrecking behavior. As for the Senate and President? Let the engineering and oil extracting companies do their jobs, whereever holds promise (as well as in the Gulf)!
1. ”Potential Oil Production from Coastal Plain of Arctic National Wildlife Refuge: Updated Assessment.”U.S. Energy Information Administration. Energy Information Administration, 01 May 2000. Web. 6 Jun 2010 <http://www.eia.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/execsummary.html>.
2. ” Assessment of Undiscovered Oil Resources in the Devonian-Mississippian Bakken Formation, Williston Basin Province, Montana and North Dakota, 2008.” National Assessment of Oil and Gas Fact Sheet. U.S. Geological Survey, April 2008. Web. 5 Jun 2011. <http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf>.
3. ” Assessment of Undiscovered Oil and Gas Resources of the Anadarko Basin Province of Oklahoma, Kansas, Texas, and Colorado, 201.” National Assessment of Oil and Gas Fact Sheet. U.S. Geological Survey, January 2011. Web. 6 Jun 2011. <http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf>.