'A pen warmed up in hell' | Reality-based commentary about Phoenix, Arizona, and the nation.
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Maricopa County Supervisor Don Stapley's legal troubles provide an instructive window into much of what's wrong with Arizona. He was indicted by a grand jury on 118 felony counts for properly failing to disclose his real-estate dealings. The first "tell" on the case is that it's being pushed by Sheriff Joe Arpaio and County Attorney Andrew Peyton Thomas, who are hardly the most reliable figures in law enforcement. As New Times' Sarah Fenske pointed out:
That's right. The sheriff of one of the most populous counties in America had deals for shopping strips going on the side.
3Fact and fiction about Arizona university funding, per Michael Crow (and I agree):
Based
on some of the responses I’ve received recently regarding the state
budget proposal, I wanted to forward a few key facts to counter the
lingering inaccuracies and misperceptions I continue to encounter. The
information below provides important clarification related to pending
budget concerns and the magnitude of the challenges ASU is facing.
Fiction: The cut to ASU in the proposed legislative budget
is a small fraction (between 4 and 12 percent) of the university’s
overall budget.
Fact: The actual percentages are 35 percent of the
2009 state General Fund budget that is remaining for the year and when
the proposed 2010 cuts are added, it totals 40 percent of the
university’s state General Fund appropriation in 2008 on a Full-time Equivalent (either a full-time student or its equivalent of two part-time students) basis.
2Renegade — the president's secret service code name — is pushing hard for "his" stimulus bill as it reaches the House floor today. What's in is? That's difficult to tell as the horse-trading continues, and as Obama tries to rope in at least some Republican support. FDR and the Democratic Congress in 1933 simply steamrolled the Republicans who demanded balanced budgets and reactionary policies — but never mind. In the end, this will be a package crafted not only by 535 lawmakers, but countless lobbyists and staff. My biggest fear is that it will not be a renegade stimulus — transformative and focused on the future.
Let me count the ways:
1. Tax cuts in the current environment won't provide help. U.S. tax rates and dodges are already generally at lows not seen since the Coolidge years. Obama promised a working-class tax cut. Fine. He's bowed to Grassley to provide more alternative-minimum tax relief. OK. But these should be different bills. They're not stimulative. Individuals will squirrel away their checks or use them to pay down credit-card debt. Corporations are already paying nothing in many cases. As for "investors and risk-takers" — the Bush years demonstrated that tax cuts on investments merely fuel speculation while encouraging job-killing mergers and offshoring. Not for nothing did wages stagnate during those halcyon years. Perhaps worst of all, it continues the destructive "tax cut" entitlement mindset that Americans can get something for nothing.
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3The $750 billion financial bailout is turning into a scam rivaled only by the practices of the financial sector that precipitated this signal disaster. The geniuses overseeing this "rescue" thought it would be dandy to save Bear, Sterns — but then let Lehman Brothers collapse. They pumped $45 billion into Citigroup — which went out and bought a $50 million corporate jet. Merrill's "savior" CEO was redecorating his office to the tune of more than $1 million while headed into a shotgun marriage with Bank of America — which is now begging for more bailout billions because of Merrill's disastrous bets. AIG and the rest of the gang handed out billions in bonuses while their hands were out for the taxpayers money. And the system is still sick, reeling afresh with any day's new shock.
Maybe $300 billion of the TARP money has been committed — maybe more. Then there are perhaps trillions in dollars printed out and essentially given to the big banks through Federal Reserve "lending facilities" — which the Fed is keeping secret. Behind the scenes, the big banks continue to lobby and squeeze members of Congress. In exchange for the taxpayer money, it's unclear what the taxpayers get in return, whether any of the bailout money will ever be paid back. These guys make Bernie Madoff look like the Better Business Bureau.
Now the cognoscenti are talking about nationalization as the answer — whatever "nationalization" means. As the New York Times reports,
That has already happened; taxpayers are now the biggest shareholders
in Bank of America, with about 6 percent of the stock, and in
Citigroup, with 7.8 percent. But the government’s influence is far
larger than those numbers suggest, because it has guaranteed to absorb
the losses of some of the two banks’ most toxic assets, a figure that
could run into the hundreds of billions of dollars.
As one of many who were punked by Paulson in the original panicked rush to pass the bailout, I say let's take a deep breath, stop, look and consider:
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3It was probably not a good sign when the email from ASU President Michael Crow — subject line "Proposed budget cuts and the future of Arizona" — landed in my spam folder. Of course, this was not an email from Crow's private address, but a mass mailing to Arizona State University alumni and supporters. Still, not a good omen.
The Kookocracy is now in charge, from the governor's office right down to Arpaio's gulag lite. Whatever the budget situation, their antipathy to education, especially those "socialist professors," is well known. While Janet Napolitano was governor, their worst tendencies were constrained. Now the extreme reactionaries have total power and the excuse of a budget deficit. They want to slash $600 million from Arizona universities, singling out higher ed to take the biggest hit from state cutbacks.
Crow is not overstating the stakes when he says the cuts threaten to give Arizona a "Third World education and economic infrastructure." Yet despite an emotional backlash against the Regents, I wonder if the extremist juggernaut can be stopped. Even without the further cuts, the damage is deep — and couldn't come at a worse time.
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1The more I learn about the $750 billion bailout of derivatives, tranches and collateralized debt obligations, the more I think about drunks. The true drunk will do anything to keep drinking. Cheat. Steal. Betray. No one is above his treachery. He will destroy his family to get the next drink. On a binge, he will spend the wealth it took his family generations to accumulate, right down to the treasured mementos. He can be clever, fun, charismatic. Behind this mask he is a monster. At his most destructive, he wraps his addiction in layers of complexity and opacity, which non-drunks would simply call lies.
Substitute "banker" for "drunk" and I think we have a better understanding of the mess we're in. Consider State Street Bank. Its shares plunged 59 percent Tuesday as it revealed previously "unrealized losses." That's the drunk telling his wife he's wiped out the family savings. Citigroup and Bank of America shares are cheaper than value meals at McDonald's — territory we saw with the late Washington Mutual on the way to failure. That's the drunk in the gutter. The difference is they don't know they've hit bottom and must fundamentally change. They just want another drink.
They call it capital, and the last bar open is the federal Treasury.
2Tomorrow and tomorrow and tomorrow creeps in this petty pace from day to day to the last syllable of recorded time; and all our yesterdays have lighted fools the way to dusty death… Yet sometimes grace bestows a tomorrow of soaring magic and hope, and so it will be with the inauguration of Barack Obama on Tuesday. Whether it began with his moving rhetoric or much of America's desire to simply be rid of George W. Bush, Obama has captivated this nation. The vast majority of people believe in him and, if polling is right, are willing to give him time to fix the disasters produced by the past eight years.
Just to have a president who can speak well and intelligently, who reads books and newspapers, who seems to have an interior life, calm center and an open mind, who's smart, who won't embarrass us in the world. A man who is willing to change his mind when the facts change. Just these things will mean much. America will no longer use torture as an instrument of national policy. Science will come center stage in guiding policy. Diplomacy will once again be worthy of a great power. This president's Christianity will be made manifest through humility and witness, not as a creepy "God talks to me in the Oval office" or as tactic of division and inciting the mob. This constitutional scholar will know about separation of church and state and separation of powers. His vice president will be a vice president. Just these things will be healing tectonic shifts from the scoundrel time we have endured. I, for one, will see the flag raised and hear the national anthem with tears of renewed pride rather than sorrow.
So you can stop reading here. Or come back after the inauguration and read further. Otherwise, we must brace ourselves for the extremely difficult work that will follow tomorrow.
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3I can't help but point out with satisfaction that the pilot who perfectly glided the stricken US Airways plane into the Hudson, saving all aboard, is one of those experienced Baby Boomers who has spent a lifetime perfecting his skills, doing something real and productive, rather than pushing financial swindles. He's also a union member. These are the people our economy can't dump fast enough. And we wonder why America is in trouble.
Then there's Timothy F. Geithner, President-elect Obama's choice to be the next Treasury secretary. I've been uncomfortable with Geithner since his selection, chiefly because he has been president of the New York Federal Reserve Bank, the mother ship of the Fed, since 2003. This means he was in a position of significant influence as the financial portion of the Great Disruption was emerging. He apparently raised no alarms or did anything to stop the outright fraud running like a river of manure on Wall Street. He has been, as the New York Times put it, "a central player" in the $750 billion financial bailout. So he was a co-pilot who ditched the financial system, but unfortunately it keeps taking on water and the casualty toll is mounting.
Then there's the wee little problem with his taxes.
3The financial implosion that wrecked America was largely cooked up by Citigroup, not only in its kitchens of "innovation" but especially in its wide influence over the industry. Now what was once touted as the largest "financial services" company in the world is being dismantled. Among other things, it will sell its Smith Barney unit, credit-card business and consumer finance units. The Wall Street Journal observes that the final result will look much like the old Citicorp before Sandy Weill got his hands on it in 1998. Only without the integrity, market value and perhaps safety and soundness.
Unfortunately, the American taxpayers own a 7.8 percent stake in this dog (the Treasury alone gave a $45 billion infusion — 45 times the annual Amtrak budget). Maybe — who the hell knows what we're on the hook for, considering the secrecy with which the bailout has been handled. Who knows how many hundreds of billions of dollars have been thrown down the Citi-rathole by TARP and the Federal Reserve. And all for what? Did we also pay for the cheap undercoating and worthless extended warranty?
This institution that was deemed too big to fail has failed to unfreeze credit markets. Citigroup has succeeded in lavishly compensating its top executives and big-time traders, who jet away from the calamity with no consequences. In 2007, as the crisis became undeniable, then CEO Charles Prince, who had performed abysmally for shareholders, nevertheless made some $25 million. Robert Rubin, the Democrat brain trust on economics, was paid $17 million. This year, aided by "rescue" money from the taxpayers, Citi reportedly set aside $3 billion in bonuses.
Obviously the Citi never slept.
7I keep getting emails from friends asking if I'm okay. The national news has been saturated with reports of the flooding in western Washington. I'm fine, largely because I live within the long-established urban footprint of Seattle (downtown, happily). Most of the damage has come in the exurbs, and much of it is human-caused. This is our second straight year of unusual flooding. It won't be the last.
This reminds me of my return to Arizona in 2000. Every year forest fires would erupt threatening cabins on the Mogollon Rim (pronounced Mug-e-on) in the High Country. One particularly devastating fire began in 2002 when a woman had a fight with her boss (boyfriend?) while they were on a trip to service his vending machines (I am not speaking in euphemism here). She stalked off into the forest, wearing only shorts, tank top and flip-flops, carrying a towel, cigarettes and lighter — a survival kit I never learned about as a Boy Scout. When she became lost, she lit a "signal fire" that turned into one of the worst conflagrations in state history. (And you wonder why Arizona is rated America's dumbest state). Comedy aside, I was puzzled because these areas of the High Country had been mostly uninhabited National Forest land when I was a boy. Then I drove up and saw the "cabins" were mostly subdivisions plopped down amid stands of combustible pine trees.
These disasters, repeated around the West and indeed the nation, bring large public burdens, from relief efforts and firefighting, to higher insurance costs. Yet nothing is being done to address the cycle of disaster. And with climate change and other environmental degradation, we ain't seen nothing yet.
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