The Bain of Newt’s Existence

Truth is, not all companies, not all business ideas, can make it on their own. 

It’s easy to say that a good idea will automatically lead to a successful business. But it’s a lie.

Apple did not become Apple without investors.  Sure, there are some examples of businesses that flourished without financial help.  But not many. We’ll never know the wonderful ideas that died in their owner’s garage for lack of financing. 

Markkula offered to guarantee a line of credit of up to $250,000 in return for being made a one-third equity participant. Apple would incorporate, and he along with Jobs and Wozniak would each own 26% of the stock. The rest would be reserved to attract future investors. The three met in the cabana by Markkula’s swimming pool and sealed the deal. “I thought it was unlikely that Mike would ever see that $250,000 again, and I was impressed that he was willing to risk it,” Jobs recalled.

Isaacson, Walter (2011-10-24). Steve Jobs (p. 77). Simon & Schuster, Inc.. Kindle Edition.

A lot of people with ideas turn to government for investments. Why a business person with an idea would go to government for funding is obvious: poor scrutiny, below market interest rates, and (seemingly) unlimited funds. Ideas requiring big investments and heavy risks tend to seek out government help.  (See Aerotropolis.)

But the private sector has its own method of bringing great, but risky, ideas to market: venture capitalists and private equity. 

Venture capital and private equity firms pool their money together and invest in start-ups or small businesses seeking to grow, or salvage existing companies that suffer from bad management.  These firms employ experts and risk-takers who help push ideas over the top. 

Most importantly, private equity firms are like Bailey’s Building & Loan—they give us an alternative to the Mr. Potter of government.


It’s absurd to criticize Bain Capital for its practice of salvaging failing businesses.  It’s absurd and silly to criticize Mitt Romney for laying off people from dying companies. Even some Democrats get this:

Should bad, poorly-managed companies be allowed to destroy value?  Should fast-growing, innovative businesses receive capital and support to accelerate their growth?  And should hard-working pensioners and retirees be allowed to invest their savings in an asset class that outperforms nearly every other one available?  Private equity has an important role and should be lauded, not lambasted.  The WSJ does a nice job of making this case here

I am a strong proponent of business considering all stakeholders, not just shareholders, as vital corporate interests.  I’ve written about Creating Shared Value in the past. I believe that mass layoffs shouldn’t happen simply to boost quarterly or annual numbers. 

When Bain Capital bought a business, the damage had already been done.  Bain didn’t buy thriving companies and gut them; it bought failing businesses and saved them.

Sometimes layoffs are necessary to avoid outright closure.  That’s why business leaders get paid big dollars—because we rely on them to save as many jobs as possible by making brilliant strategic decisions. 

While I have a lot of difference with Mitt Romney and with business executives who treat employees like pawns in their personal empowerment games, I believe that Romney’s actions at Bain were necessary and compassionate, not callous and self-serving.

Were it not for private equity firms like Bain and venture capitalists in general, ideas like the Apple II would die in Steve Jobs’s garage.  Entrepreneurs, inventors, and troubled companies would have nowhere to turn except government.

Newt Gingrich made a big mistake attacking Romney’s role in saving failing companies. In fact, his error was so big it might have sealed the nomination for Romney.

UMSL Killing American Males

David Brooks—the former conservative—skewered the University of Missouri St. Louis yesterday.  Brooks wasn’t aware, and UMSL administrators don’t read. But some of us caught it. Brooks wrote of The Missing Fifth. Did you know that 20 percent of American men in their primes don’t work?

Americans should be especially alert to signs that the country is becoming less vital and industrious. One of those signs comes to us from the labor market. As my colleague David Leonhardt pointed out recently, in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work. [Emphasis added.]

How sad. How embarrassing. I’d say “how shameful” except the Supreme Court ruled shame unconstitutional, or so it seems. We’ve had that feeling, shame, removed from our souls.

Men who do nothing are deadbeats, much more so than people who try to pay their bills and can’t.  We’re talking about able-bodied men who simply choose to sit on their asses and sponge of others—off of foolish women, in many cases.

Brooks errs in his proposed solution, of course.  Brooks thinks American education the solution. He hasn’t been paying attention. I have some other ideas.

Higher education isn’t the solution to our problem; education is the problem.

The University of Missouri’s wing schools, UMKC and UMSL, offer the course “Introduction to Labor Studies.”  This course is why 20 percent of men believe that sitting on their brains is their right—nay, their duty—as young, able-bodied American men.

Leaving aside the communist party recruitment activity for a moment, UMSL’s Labor Studies course is a lesson in lying, lazy, and license.

In Labor Studies, professional derelicts Don Giljum and Nancy Ancel teach students how to avoid work, how to destroy a company’s profits, and how to harass and intimidate managers.

Think about this: the state of Missouri uses tax dollars to teach Missouri students how to rip off employers.  Knowing that, why would you hire someone who went to a public university in Missouri?  Why would you open an office or business in the state?  What could be more foolish than to expect Missouri to encourage business?

Here’s a solution.  It’s a tiny, tiny step, but it’s a step in the right direction: Shut down the damn Labor Studies course in the University of Missouri system.

An alternative solution if that’s too radical for our legislature: rename the course “Introduction to Deadbeat Studies.”

But do something before "Men at Work" becomes nothing more than a trivia question.

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Generation Conflicted

In the tech world, I meet a lot of brilliant, ambitious, hardworking entrepreneurs. These folks are committed to their dreams, working 100+ hour weeks, and paying themselves as little as possible. They stretch investors’ dollars to the limit and hunt for more VC to make dreams come true. They want to create jobs and better lives for many. 

Over drinks, these young capitalists talk about three things:

1. Easier access to capital.

2. Lower taxes so they can reinvest in the next generation of their products.

3. An expansive, wealth-distributing, world government.


Yeah.  These people who are sincerely and devotedly capitalistic about their own businesses are totally socialistic about everything else.  Their top-shelf educations have thoroughly brainwashed them into believing that a start-up in Silicon Valley (or Cleveland) is not subject to Obama’s plan for unified world economic management. 

We can win them over.  Ask them if they would accept some professor’s point of view on whether or not their software idea was feasible.  (They would not.)  So why accept some History professor’s view of the world?

Make a deal:  I’ll support lower taxes on entrepreneurs, if you’ll support less government regulation on small businesses. (Make them think.)

America leads the world in technology innovation (if not production) because we are free to pursue happiness. The young geniuses in Silicon Valley have access to VC because America produces wealth and lets (for the most part) the people decide how to invest that wealth. 

As Obama’s policies worth through the economy, opportunities to start new businesses, to build new dreams, to design and create great stuff vanish. Let’s win the minds and hearts of the brightest, boldest innovators.  They’ll fix Washington so they can get back to their dreams.

8,000 Dow? *UPDATE*

So says Yale economist Nouriel Roubini in an interview today on CNBC.

"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse."


Roubini’s comments came in response to a 376 point drop in the Dow Industrials. Nasdaq and S&P 500 were off significantly as well.  All three indices are at or near correction territory, having fallen about 10 percent from their peaks.

The reasons for the nosedive are pretty obvious:

In short, if the news isn’t uncertain, it’s bad news for economic growth.  Other economists see weakness in the US economy, as in this Yahoo News story:

"The economic recovery story has started to look like a mirage and the new reality is a return to credit crunch conditions" like those seen during the financial crisis, said Tom Samuels, manager of the Palantir Fund in Houston. "If that's correct, stock prices are well ahead of economic reality."

Buckle your seatbelts.  It looks like Obama’s second recession is on its way.


The stock sell-off continues in Asia on Friday.  Major indices are down about 2.5 percent from yesterday's close.  The Senate tonight voted to place massive controls on banks and finance, a move sure to spoil investors' appetites.  This Congress and this administration are bent on controlling every aspect of our lives.  Alexis de Tocqueville predicted this outcome 180 years ago:

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

Please read the rest of Democracy in America, Volume II, Section 4, Chapter VI.

Edward Whitacre Jr. Lies **Update: NYT Agrees**

No, General Motors did not pay back its debt to taxpayers. Edward Whitacre is a liar. Instead, Whitacre paid the Visa bill with his MasterCard.  But both cards were issued by the same bank.  So you, the banker, are still on the hook for the full amount. Now we know why Obama hand-picked Ed Whitacre to “lead” GM: Whitacre will do the president’s bidding.

**UPDATE**  From  New York Times agrees that Whitacre and White House ain't tellin' the truth.  Look for this story to grow this week. Bottom line: you cannot trust the government. Period.  But there's more.
GM's false statements about finances could be a criminal violation of Sarbanes-Oxley, according to Ed Morrissey:
This kind of misleading statement would be actionable under Sarbanes-Oxley had it been made as part of a disclosure statement. It might still yet be actionable if the SEC concluded that GM intended to mislead investors into buying GM shares the same way Whitacre wanted to encourage car buyers to come back to GM by falsely claiming that they had repaid taxpayers in full.
Whitacre and the rest of the GM board should be under criminal investigation this week.  Demand justice.

If The Post Office Built Cars

Some good people work at the Post Orifice.  I know several.  One of my dad's best friends and WWII paratrooper retired from the Post Orifice.  He was a great guy and good friend to my parents. 

On the other hand, the United States Postal Service is among the incompetent, bureaucratic, broken down, 19th century, poorly managed excuses for an organization since the Soviet Union went out of business. 

Case Study:  Christmas Gift

My wife ordered a handbag for my stepdaughter for Christmas.  She ordered it on December 16.  The seller shipped it Priority Mail from Overland Park, Kansas, the same day.  On the USPS web site, the tracking information indicated it should arrive in Ballwin, Missouri, on 12/19. 

On 12/19, my wife logged on to see if it was in town.  It was in the town of Warrendale, Pennsylvania.  For those of you who failed geographic (and for Postal workers who didn't attend high school), here's a map showing the relationships between Kansas, Missouri, and Pennsylvania:

Map image

   As you can see, the purse started out (left pin) much closer to Ballwin, MO (middle pin), than it was 2 days later (right pin).  Warrnendale, PA, is pretty close to the Atlantic Ocean.  Overland Park, KS, is pretty darn close to Ballwin, MO.  In fact, I could drive to Overland Park, get the purse, and drive back to Ballwin in a day without really exerting myself.  A trip to Warrendale, PA, on the other hand, would require a night in a hotel.

The geniuses at the Post Orifice had to carry the purse through Ballwin, MO, to get it to Pennsylvania.  But rain or snow or dark of night, these couriers loose our Christmas presents like the professionals they are.

My wife called the USPS on December 19, of course.  She was curious as to why they took the package 642 miles out of the way.  The postal worker said that Priority Mail can take up to 10 days.  Apparently, they intended to use all 10.  Still, the postal worker assured my wife the package would arrive by Christmas morning.

On December 22, the package was still in Warrendale.

On December 24, the package left Warrendale.

On December 26, the package returned to Warrendale.

On December 27, the package left Warrendale.

This pattern continues to today, January 3, 2009.  One day it leaves Warrendale; the next day it returns. 

Today our local Post Orifice called my wife to read to her exactly what my wife can see on their web site:  the package is "looping," the clerk told her. 

"Yes, I can see that," she said.  "When will you stop looping it and send it to Ballwin, Missouri, which is just 250 miles east of Overland Park, Kansas?"

"Well, we can't say," the postal clerk told her.  "There might be something wrong with the address on the package . . . a torn label or something.  Hard to tell from here."

"Then why are you calling me instead of someone at the Warrendale Post Office?"

"Because this is your post office," the clerk answered, as if "Duh!"

"Well," my wife asked, "will it ever get here?"

"Eventually, they'll just return it to the sender in Kansas," the clerk said.


"Yeah.  Eventually."

"When is 'eventually?'"

"Hard to say from here."

Just Wait 'Til They Start Building Cars

The reason the Post Orifice sucks golf balls through 200 feet of garden hose is because it is a government-owned corporation, like Fannie Mae and Freddie Mac. Everything the government does sucks.  Why should carrying a package a couple hundred miles be any different?

The government will apply the same standards of excellence to the cars it builds.  Anyone, therefore, who buys a Chevy or Chrysler after the bailout deserves the waste of steel he gets.  The last time a government tried to build a car and sell it in the USA, it became the gold standard of things that suck:  Yugo.   As in, "The Post Orifice is the Yugo of delivery services," or "Fannie Mae is the Yugo of financial institutions."   Shortly, the Cadillac will be the Yugo of Cadillacs. 

Another the reason the Post Orifice sucks will be a natural fit at GM and Chrysler:  unions that bar managers from firing drunk, drugged, lazy, entitlement-minded, and incompetent workers.  (Yeah, I know, "workers" is an exaggeration.)  Imagine the guy who loops my stepdaughter's purse every morning at 2:00 a.m. adjusting the brakes on your Escalade. 

Oppose Government Action

If you make one resolution for this new year, make it this:  I will oppose government action of any kind because everything the government does sucks golf balls through 200 feet of cheap garden hose. 

And if you buy online, make them ship it FedEx or UPS.  Never trust the Post Orifice. 

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A Bunch of Hooey

about_dellearth The silliness of companies knows no bounds.

The latest act of corporate stupidity comes from the computer maker Dell.

In its attempt to become the "greenest technology company on the planet," Dell made much of achieving some farcically theoretical "carbon-neutral" status.  But, like everything associated with AGW, there's really no so thing.  WSJ points out in a wonderful examination today:

In fact, that's only a small fraction of all the emissions associated with Dell. The footprint doesn't include the oil used by Dell's suppliers to make its computer parts, the diesel and jet fuel used to ship those computers around the world, or the coal-fired electricity used to run them.

Again, it's difficult to criticize Dell for claiming to have achieved something that exists only in theory and is of little or no value to the planet or its inhabitants.

Moreover, while Dell is improving its energy efficiency, it is claiming carbon neutrality mostly by purchasing environmental "credits." These are financial instruments that bankroll environmental improvements made by others.

Hank Paulson, Al Gore, and George Soros are the masterminds behind these carbon credits.  Each reaps millions from environmental morons like Michael Dell who seek, not truth, but popularity.  And then only popularity with the shallowest, emptiest heads on the planet: the media and Hollywood.

Yet some of those improvements would have occurred whether or not Dell invested in them, according to some of the companies involved. That suggests Dell isn't ridding the atmosphere of as much pollution as it claims.

Of course not.  Dell is ridding its investors of their feigned guilt. 

As thoroughgoing as the WSJ seems, there's much missing.  For instance, if PCs make their owners more efficient, then the use of the PC may save more carbon-releasing activity than the manufacture, sale, distribution, and operation of the PC consumes.  Therefore, the mere existence and use of a computer may, itself, be carbon neutral or better.  We don't know. 

Neither do Gore, Sorors, and Paulson know.  Nor Hansen and Mann.  No one knows.  No one really cares.  Instead, they wrap themselves up in a fantasy and call it concern.

I call it a bunch of hooey.

Predictions for 2009

After a 2 year hiatus from annual predictions, here's what I see happening in the precarious Year of our Lord Two-thousand nine:

The Dow:  The Dow trades within a range of 1,000 points with a daily average closing of 8,500.

GDP and Economy:  By July, everyone pretty much calls the situation "Great Depression II."  Unemployment, which declines in the first quarter, increases to more than 12 percent by fall.  Gross Domestic Product by quarter:

Q1:  -.06

Q2: -1.5

Q3: -6.5

Q4: -2.0

US Treasuries:  Moody's warns investors in US Treasuries that inflation could erode the real value of the paper dramatically but falls short of lowering bond ratings.  China and Japan sell over $1 trillion in long-term US debt.

Auto Industry:  The bridge loan isn't enough and the UAW refuses major compromises, but Obama and Congress block GM and Chrysler from bankruptcy.  Instead, Congress authorizes $70 billion in exchange for voting stock and a seat on the companies' boards.  The companies oblige, effectively becoming government agencies. 

Iraq:  The slow drawdown of troops will continue according to the plan approved by Iraq in 2008.  The net effect of Obama's win on Iraq is zero.

Iran:  The Obama administration achieves a pyrrhic victory by signing a non-proliferation agreement with Iran similar to the one Clinton (via Carter) signed with North Korea.  By the end of 2009, Iran's cheating is obvious, but both the US and UN ignore it . . . until it's too late.  Israel acts alone.

Key Legislation: 

Fairness Doctrine returns requiring television and radio stations to provide equal time to all sides of any news or science issue with the exception of climate science.

Emission Standards increased dramatically by Congress and rubber-stamped by GM and Chrysler boards.  Ford sues claiming unfair competition and anti-trust violations.  Suit will take years to settle.

Unions can demand to know a non-union's position on unionization votes.  Many shops turn union; many anti-union workers are assaulted and threatened. 

Medical workers are compelled to participate in abortions regardless of religious or personal beliefs.  Thousands of doctors and nurses quit in protest.  The Catholic church closes thousands of hospitals creating the greatest healthcare availability crisis ever in a post-industrial country.  Congress prepares, by year's end, to take over the healthcare industry and all medical universities and colleges.


Several major professional sports teams fold as advertising dollars disappear.


No one really cares after reading the list above.


Newt Gingrich prepares a presidential run in 2012 by quarterbacking a team of more than 200 Republican Congressional candidates on single agenda to win back Washington and capitalism. 

Climate Change:  2008 was the coolest year in almost 20 years, and 2009 looks to be even cooler.  A major flaw is revealed in the most sophisticated models.  James Hansen refuses to admit he was wrong, but even the media stop covering climate change.  Environmentalism shifts to potable water, an actual problem that will affect the US in 20 years as the Ogallala Aquifer dries up.

Linux Approaching Tipping Point

Rarely does a single factor cause a paradigm shift.  For one example, look at the election of Ronald Reagan.  Sure, Reagan had a great message, expert delivery, and that presidential look.  But without Carter's bungling incompetence, excesses by liberals in Congress, a runaway Supreme Court, Soviet expansion, stagflation, the Iranian hostage crisis, and seventeen thousand other annoying problems, Reagan would not have upset an incumbent president in 1980. 

Revenge of the Nerds

Since 1999, my IT friends have been predicting the rise of the Linux desktop.  Since 1999, they've been wrong.  Being IT professionals and excellent programmers, they failed to realize that the average home user does not have the patience nor the inclination to learn sudo apt-get nonsense.   They want single-click installation.  (Actually, they want to merely imagine something and have their computer make it so.)  Linux had no product managers to demand ease of use.  The Linux community didn't understand that they were not their (potential) users.

A Linux Distribution People Can (almost) Use

Ubuntu might soon change that.

Last week I installed Ubuntu 8.10 on my wife's laptop.  (It dual-boots Vista Home Basic for her Zune and a few other incompatible activities related to her job.)  After getting both systems working smoothly, I went the extra step of setting up Ubuntu's Gnome desktop system to work and look like Mac's OS X.  I friggin' love it.

The reason for installing Linux on this machine was economics--and that's one of the factors that could put Linux on a lot of desktops in the next 2 years.  My wife's laptop is limited to 1.25 GB RAM.  It has a barebones video card.  I just replace the 60 GB hard drive with a 160 GB one because the 60 GB was 90 percent full even though all of our User files (docs, photos, music, videos, downloads, etc) are stored on an external HD. I used an out of the box install of Vista--not the OEM disk from Toshiba--so that I could install the minimum crap necessary to run the computer. 

Running Out of RAM

When I fire up Vista, it immediately consumes 600 MB of the 1.1 GB of RAM available after the video card steals its share.  Open a browser (we use Google Chrome, the best browser ever made) and RAM usage is up to 700 MB.  Browse an image-happy site, and the damn thing starts swapping! 

Boot into Ubuntu, though, and the OS uses only about 212 MB of RAM.  Open a browser and 10 other programs, and you're up to about 500 MB. 

Moreover, there's no anti-virus software inspecting every 0 and1 because Linux is pretty much immune to viruses.  And it's free.

Six-Factor Tipping Point

But the tipping point toward Linux requires a few other factors that have also come to pass:

  • Google Docs and Google Apps give most users all the word processing, spreadsheet, collaboration, scheduling, messaging, and email functionality they'll ever need--for free
  • Ubuntu keeps your system up-to-date with just about any application you'll ever want--for free
  • The economy makes the bells and whistles that drove Windows to the top of the market seeem pretentious and embarrassing
  • Every year, the computer skills of the world's users increases rather dramatically so that more people can deal with unforgivable terminal commands like 'sudo apt-get epiphany-browser'
  • Companies looking to cut their IT costs will begin moving more and more software out of their in-house data centers and into the clouds (Google Apps instead of Exchange server and Microsoft Office will be a major theme for enterprises in 2009)
  • Companies will figure out that with Linux desktops, they can get more years from cheaper PCs for zero cost of desktop applications and operating systems

If I were Microsoft, I'd be worried.  And I drank the Redmond Kool-Aid many years ago when Steve Balmer gave me a free copy of all of Microsoft's business-related software in order to help my fledgling book publishing company.  In return, I helpd convert 2 companies into Microsoft shops.  I still love Microsoft, but with an almost or actual depression staring the world in the eyes, I'm not sure I can afford their stuff any longer.

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America, you just bought yourself 3 car manufacturers

Apparently Bush's plan to socialize all of America before leaving the White House is alive and well.  Some sort of a crappy deal has been reached. The plan includes a car czar--something that Toyata, Nissan, and Honda miraculously do not need--to run the auto industry like a DMV license office.  

The last time a government designed, built, and sold an automobile like, it was called the Yugo.  I'll keep my SUV, thanks.

Once again, our last hope is the Republican Caucus--this time in the Senate.  Write today.

American Auto Industry Doomed

If you own US auto stock, sell.

If you work for a US auto maker, find a new job.

If you own a US-made car, start shopping.

The government is about to destroy the US auto industry, and it will cost billions of dollars.

Apparently, the White House and Congress are trying to invent an auto czar position to "oversee the restructuring of the industry [Wall Street Journal]."  That means that the problems that led to the current crisis will get worse and the possible solutions to the crisis will be outlawed.

Here are the problems contributing to GM's problems, in particular:

  • Union auto workers make more than doctors, MBAs, college professors with Ph.D., research scientists, or small business owners
  • Retired auto workers make even more than working auto workers
  • Laid-off auto workers make 80 percent of what a working auto worker makes
  • Idled plant workers make 70 percent what active auto workers make
  • State laws prohibit closing auto dealership even though GM has 4 dealership for every Toyota dealership
  • Idled US auto plants cannot be sold or leased
  • Rick Wagoner is an idiot

Each of these problems was caused by a Democrat special interest group, and the Democrats will not permit the problems to get fixed.  Bank on it. 

The solution to the US auto problem is simple:  bankruptcy.  A well organized bankruptcy will void UAW contracts, sell off idle capacity (to start-ups, if we're lucky), and tell the retirees to live like other retirees instead of like the idle rich.

I am writing my Congressional delegation to tell them to oppose any bailout of autos that does not include bankruptcy.  Do the same, or the US auto industry is toast.

*UPDATE*  Larry Kudlow has more:

We will not bailout our way into prosperity. Nor will we spend our way into prosperity. Somebody has to stand up and yell: It's time to cut tax rates on the supply-side. That will reinvigorate growth and infuse new spirit into a demoralized economy.


Homes for the Rest of Us

Homes for the Rest of Us is my response to the mess that is the finance industry.  The Harvard MBAs screwed up the whole finance thing. So how are people supposed to get houses? We'll just have to take care of ourselves.  And each other.

I don't know exactly how this will work, but I am pretty damn sure we can make it happen.

There's this great program called that allows people to make micro-loans to entrepreneurs, mostly in emerging or plain dysfunctional economies. These entrepreneurs use the loans to buy baskets for their laundry business or seeds for their half-acre "farms." They pay back the money the best they can.

This is America, though. Comparatively, we're rich as all-get-out. We can give much bigger "micro" loans to people who can't get mortgage financing any other way. And, besides, have you read paper? The whole world is a dysfunctional economy.

So here's what I'm looking for:

* Some honest lawyers who know what kind of non-profit corporation we have to set up * Some honest lawyers to help us (volunteers) * Some finance or banking people (volunteers) * Some lenders to get the ball rolling (volunteers, sort of) * Some borrowers who need money to buy a home (these shouldn't be difficult to find) * Many passionate people who want to help in any way they can

We'll need to create some basic rules and set some return rate. The loans will probably very high risk, but the interest rates probably won't reflect the level of risk compared to other investment options. That's okay, though. People are good and want to help each other.

I don't want to put banks out of business--they have their job in society. But I think it will take a generation of grad students before we really trust that group to finance home mortgages again. And I know a lot of people who don't want to wait that long.

If you want to help, forward the link to this site to everyone you know. Just getting some eyes on the page and ideas on the forum will help.

Great movements start with tiny actions, and this is about the tiniest action I could think of. So it will have to work.

Who says conservatives won't help their fellow human?  Did I mention that this is a non-profit?

Obama's $26 Million Fannie Mae Be-atch

Her name is Jamie Gorelick.  She was the principal architect of Al Qaeda's ability to plan and execute the 9-11 attacks under US intel's radar.  She took $26 Million in six years from Fannie Mae by ordering accountants and internal auditors to falsify records and forge documents so ensure that she, Jim Johnson, Franklin Raines, and other Democrat executives at Fannie received maximum bonuses.

Lehman Brothers collapse is traced back to Fannie Mae and Freddie Mac, the two big mortgage banks that got a federal bailout a few weeks ago.

Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job.

Jamie Gorelick is considered the front runner for Attorney General should Barack Obama win.  She needs that job to keep herself out of prison. 

The Virginia Patriot exposes the scam that Obama's chief legal and economic advisors ran at Fannie Mae--the scam that, according to Obama, has brought the world to the brink a great economic depression:

This flexibility also gave Fannie the ability to manipulate earnings to hit — within pennies — target numbers for executive bonuses. Ofheo details an example from 1998, the year the Russian financial crisis sent interest rates tumbling. Lower rates caused a lot of mortgage holders to prepay their existing home mortgages. And Fannie was suddenly facing an estimated expense of $400 million.

Well, in its wisdom, Fannie decided to recognize only $200 million [of losses], deferring the other half. That allowed Fannie’s executives — whose bonus plan is linked to earnings-per-share — to meet the target for maximum bonus payouts. The target EPS for maximum payout was $3.23 and Fannie reported exactly . . . $3.2309. This bull’s-eye was worth $1.932 million to then-CEO James Johnson, $1.19 million to then-CEO-designate Franklin Raines, and $779,625 to then-Vice Chairman Jamie Gorelick.

As for other losses, they were routinely mischaracterized so that they could be amortized over years, not realized fully as they were supposed to be. By this method, the Fannie Mae management siphoned off millions of dollars in excess compensation to top management, including Gorelick. [source]

When he ran for president in 1996, Pat Buchanan spoke of "peasants with pitchforks" demanding retribution for the excesses of American power merchants like Gorelick, Raines, and Johnson, and their customers like Barack Obama. 

Some will argue that Gorelick, Raines, and Johnson were not criminals, but mere incompetents.  Okay, then who appointed such idiots?  How did they get jobs so powerful that they could destroy the US economy? 

I don't buy the idiot argument.  Gorelick is a master manipulator who got herself appointed to the 9-11 Commission so she could cover her lethal tracks.  She as similarly positioned herself to become AG so she can prosecute the innocent, protecting herself and her enablers in the Democrat party, including Barack Obama, the veritable Senate slave purchased for $42,000 a year.  (BTW, Obama was the most expensive Congressman Fannie Mae and Freddie Mac purchased viewed from a cost-per-year perspective.)

According to, Gorelick was also a kingpin in the Countrywide-Fannie Mae-Democrat money laundering operation that contributed to the current crisis:

Countrywide Financial Corp., the biggest U.S. mortgage lender, made large, previously undisclosed home loans to two additional executives of Fannie Mae, the government-chartered firm at the center of the U.S. credit crisis.

One of Countrywide's previously undisclosed customers at Fannie was Jamie Gorelick, an influential Democratic Party figure whose $960,000 mortgage refinancing in 2003 was handled through a program reserved for influential figures and friends of Countrywide's chief executive at the time, Angelo Mozilo. Ms. Gorelick was Fannie Mae's vice chairman at the time.

The Fannie loans -- including a series of already reported preferential loans to former Fannie chief executives James Johnson and Franklin Raines -- underscore the close connections between Countrywide and Fannie Mae and raise potential conflict-of-interest issues.

Here is breakdown of those preferential loans from the Wall Street Journal:

In 2002, Gorelick defended Fannie Mae and attacked Republicans for threatening investigations into FNMA in light of Enron's downfall. From BusinessWeek:

In the wake of the Enron disaster, Federal National Mortgage Assn. (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac), the federally chartered mortgage banks that experienced explosive growth in 2001, have come under increased scrutiny. Once again, Republicans in Congress are threatening to conduct an investigation into the activities of the two -- No. 7 and No. 2, respectively, on this year's BusinessWeek 50 list of top performers -- some say in hopes of revoking the portions of the Fannie and Freddie charters that gives an implicit government guarantee to their borrowing.

Gorelick's select responses:

We believe we are managed safely. We are very pleased that Moody's gave us an A-minus in the area of bank financial strength -- without a reference to the government in any way. Fannie Mae is among the handful of top-quality institutions.  Also, we are very highly regulated. We have auditors. We have examiners here on premises every day. And we have consistently exceeded every standard that the examiners have set for us.

Of course--except that Democrats in Congress accused those regulators of racism for even looking at Fannie Mae's books.  Regulations do no good of regulators aren't allowed to report their results. 

We are very well protected against credit losses, which fell to their lowest level in a generation -- since 1983 -- last year. They went from four basis points [0.04%] down to under one basis point [0.01%] of our outstanding portfolio. We believe that while credit losses may rise somewhat in the aftermath of the recession, they are likely to remain quite low in 2002.

We now know that all of the numbers Gorelick cited were lies--manipulations to maximize her bonuses. 

Well, our business is backed by homes with a considerable amount of equity. When I tell people that our portfolio consists of homes with an average equity exceeding 40% of market value, they are astonished.

I bet they were astonished, particularly since we now know that Gorelick was inventing these numbers from whole cloth.  Anyone who knew her business would have been astonished.

We also follow the trends in credit. We follow all the macroeconomic indicators to most effectively manage credit losses. So we're pretty confident that we should do fine. Obviously we don't have a crystal ball here, but we are basing our projections, which have been pretty accurate over the years, on the numbers we currently have available to us.

Whatever.  Criminal or criminally incompetent, Gorelick has no business walking the streets a free woman, much less as chief law enforcement officer in the free world. 

Perhaps when families are living in "Obamavilles" that used to be city parks, the American people will finally grab their pitchforks and descend upon the White House and Capitol. 

Two years later, Franklin Raines resigned in disgrace and agreed to give back his worthless stock options.  His bought-and-paid-for Democrats in Congress ensured neither he nor Gorelick would see jail time because of their blatant fraud at Fannie Mae.  Nor was either miscreant required to return the millions they stole from tax payers.  Nor are they on the hook for the $200,000,000,000 in bailouts directly to Fannie and Freddie nor the $700,000,000,000 in bailouts to the rest of the mortgage industry they destroyed.


From the

Mercury News:

Barack Obama made the calamity on Wall Street the central theme of his case against John McCain on Saturday, invoking the crisis to pound his rival on Social Security, health care and government reform.

Let me get this straight:  The highest-paid Fannie Mae/Freddie Mac politician on the planet wants to blame the financial crisis on the only politician whom Fannie Mae and Freddie Mac were unable to bribe

Obama needs a swift kick to the groin.

I won't let this rest:  Fannie Mae and Freddie Mac paid Barack Obama 4 times as much as any other member of Congress.  Obama is their bitch. 

Obama did $42,116.33 a year worth of bidding for the people who brought on the financial crisis.  Don't let him forget it. 

Jay Tea, lifelong Democrat, has turned away from Obama.  Every open-minded Democrat should find out why.  Congratulation, Jay, and kudos for your candor and spine.

King of Beers Dethroned

Since A-B sold out to Belgian brewer InBev, things have changed in the St. Louis bar scene. In a typical St. Louis County strip-mall bar during a Friday happy hour about 70 percent of the male patrons would sit behind an Anheuser-Busch product--Budweiser, Bud Select, Bud Light, Michelob Ultra, even Busch.

Not anymore.

I stopped drinking Select as soon as the announcement of the buyout came last Sunday.  But I was shocked last night when I walked into The Corner Pub & Grill in West St. Louis County to see a long line of Pabst Blue Ribbons on the bar.  Of 10 men at the bar, six had PBRs, two Miller Lite, and mixed drinks for the other two.

The tables were similar.  Of the eight people in my group, only one drank an A-B product, even though five of us had beer.

In his greatest-ever column , Jonah Goldberg praised Budweiser in terms that made one blush:

And I love Budweiser, the King of Beers. I admit it without shame or reservation. I love how it tastes. I love it ice-cold, not petri-dish warm like some foreign swill. I prefer it in a bottle. But a can or draught will do just fine if the alternative is some wheaty garbage that tastes like a bran muffin drenched in old tea. Budweiser tastes clean, pure, and crisp. Budweiser is the best conductor of that electrical charge to your brain that comes with that first swallow of beer after a long day. Budweiser does not vary in quality from coast to coast or pole to pole — and is available everywhere in between. Yes, Budweiser — just call him "Bud" — is your loyal friend in any port, at any time. Indeed, Bud's standards are so exacting and its convenience so universal that it's the most reliable beverage in the world — soft drinks and water included (cola changes with the culture, and fish still copulate in water, as W. C. Fields pointed out long ago). To paraphrase Homer Simpson — after his wife blew his chance at a million bucks — "Ah, good ol' trustworthy Budweiser. My love for you will never die."

I wonder if Jonah feels the same today.  I don't, and that saddens me.

I worked at Anheuser-Busch for a year as a contractor.  For a St. Louis kid growing up on the South Side, there were three hallowed jobs:  KMOX Radio, the Cardinals, and the brewery.  I was in heaven.  I was proud. I loved every day, knowing that my work contributed to better sales of the King of Beers.

I was also a St. Louis Cardinal Football season ticket owner from 1978 to 1983.  The brewery's sale feels much like the day the Big Red moved from St. Louis to Phoenix--like a lover moved on to someone new.

America has lost its symbol.  As Jonah put it:

There is no product — Coca-Cola and the Mustang included — that better tells the story of America. First, there is the packaging: unapologetic red, white, and blue, with a bald eagle. There is a distinct 19th-century patriotism about a Bud. Today's cans look like they would have gone unnoticed on the shelf 100 years ago (though beer wasn't available in cans until the mid 1930s). Even the forthright promise, made on every container, encourages nostalgia: "This is the famous Budweiser beer. We know of no brand produced by any other brewer which costs so much to brew and age. . . ." How fitting that in this nation, which reveres texts above all other things, our most popular beer boasts a 46-word declaration (not a slogan or motto) for the world to see.

No more.  Budweiser joins the rands of everything else that was once symbolic of American heritage and pride that packed its bags and moved.  If someone convinces me that the sale is provably a result of the Bush administration's policies, I will never forgive him.

I miss my Bud.

For a more politica take on the InBev takeover, read Just a Girl in Short-Shorts.

Deo Gratias

When I first read bogus news stories about the significance of today's date--07/07/07--I was dismissive, as I was of stories about the millennium bug (or "Y2K Problem") back in the late 90s.  (I made a decent amount of money fixing that bug, though.)  It turns out 07/07/07 was a watershed.

Pope Benedict XVI released his long awaited motu proprio on the 1962 Missal today.  

It is, therefore, permissible to celebrate the Sacrifice of the Mass following the typical edition of the Roman Missal promulgated by Bl. John XXIII in 1962 and never abrogated, as an extraordinary form of the Liturgy of the Church.

In Latin:

Proinde Missae Sacrificium, iuxta editionem typicam Missalis Romani a B. Ioanne XXIII anno 1962 promulgatam et numquam abrogatam, uti formam extraordinariam Liturgiae Ecclesiae, celebrare licet.

Liberation, freedom, grace, and gratitude flood the mind and soul.  Free at last, praise Jesus; free at last.

(If you live in St. Louis, MO, vicinity and wish to witness a beautiful Latin mass, join me at the Passionist Nuns Chapel any Sunday at 9:45.  Visit Canons Regular of the New Jerusalem for more information.) 

I have written so much on the myriad virtues of the Latin mass that I dare not repeat my arguments here.  This is no time for argument--only for celebration.  

Free at last. 

I will now let others have their say:



Move Your Company and Your Career Forward

If you want to move your company—and your career—forward, concentrate on moving your product forward. Obvious, perhaps, but the concept gets little more than lip service in many organizations. Most of my career in software development has involved web-based products that my companies sell or license to client businesses who, in turn, provide the applications for their clients’ use. For instance, at Abiliti Solutions (now FTS), we produced telecommunications billing and analysis software, a part of which included electronic bill (or invoice) presentment and payment. Without revealing too much about my current assignment, I can tell you that if you have a credit card, chances are you use one of our programs regularly.

One daily challenge I face now and for the past ten years is striking a balance between daily “run the engine” tasks and moving the product forward. You might recognize this triangle:

• Budget: you need to keep costs down while you provide excellent, responsive service on your client’s many day-to-day needs • Tasks: your full time employees are allocated based on these daily tasks with little time allocated for product improvement • Opportunity: you can see that almost every daily task is actually an opportunity to move the product forward, either by replacing human activity with scheduled or event-driven software activity or by pushing the activity closer to the source of change, eliminating the need for “middlemen.”

If this situation sounds familiar, you are lucky. First, you have customers for your product. Second, you have human resources at your disposal. Finally, you recognize that your customer would be better served if more of your fees were allocated to improving the product and less to merely maintaining the status quo.

I have a solution.

Get Into the Client’s Mind You need to know what the client wants and you need the client to know what you can do for her. Most of the direct client management belongs to some business or marketing role. But as any sales professional knows, you can sell only to the decision maker, so you have to get in front of the client. In programs in which I am not routinely involved in client relationship, I work my way to the client’s attention by picking up the baton when the regular relationship manager is on vacation, out of town with another client, or otherwise distracted. I do not go behind any backs but simply offer to help out with client A while the business manager is busy with client B. Once they take my offer (and they always do), I immediately call the key client contact to let him or her know that I am available by cell phone or email, anytime, if they cannot get hold of their usual liaison. I don’t tell them that the regular liaison is about to become hard to get hold of, because I want my availability to feel permanent.

Learn the Client’s Pain Points

Before the first conference call, I make casual rounds of the key people who work with this client—particularly those who provide day-to-day services and communication. These folks know where the pain points are: the file that’s always late, the time it takes make content changes on the web site, the data entry error that somehow make their way to the production system. Chances are, the first thing you hear from the client will involve one of these problems.

Make sure you cover the same territory with your business managers, too. While your company’s rank-and-file and the client’s may commiserate about the same issues, the client’s managers may have other priorities. (At the risk of shocking, managers are sometimes deaf to the daily problems their people face.)

If the client managers and workers share the same priorities, you know exactly what solutions to pursue. If, however, their priorities are not aligned, you have an even more powerful opportunity: in addition to showing up at the next status meeting with a solution to the management’s top priority, you can clue in your client on issues his or her people are struggling with. Have a solution ready for this, too, and have a smooth presentation.

“Your people tell my people that you don’t listen to their needs,” is not the way into your client’s heart.

“Some of our coordinators and programmers tell me that the sales information file misses its SLA about twice a week, and it costs them and their counterparts in your organization about four hours every time it happens.” This approach gives the client the opportunity to pretend he knows of the situation while hinting that the problem is costing him money. Your proposed solution—even if it’s to schedule a breakout meeting later—will get a welcomed reception.

You’ll have demonstrated two critical points: • You are a manager in tune with the daily challenges of your people and your client’s people, not just a bit-twiddler looking for chance to play with Ajax on the client’s dime • You can deliver solutions without asking for a week to “talk it over with the technology folks,” an annoying inefficiency that smart customers abhor

Deliver a Quick Win

You’ve told the client, in so many words, that you can add value to the relationship. You better deliver—and fast. Almost every problem has three solutions: an immediate fix, a long-term solution, and a perfect solution. Sell the immediate fix and develop a formal proposal for the perfect solution. (Chances are, the long-term solution will never see the light of day, but that’s fodder for a future article.)

General Patton said, “A good solution executed with vigor now is better than a perfect solution ten minutes later,” and every good manager I’ve known has commented approvingly of that slogan emblazoned on the wall of my office directly above my head. Your immediate fix is the good solution. It must save the client money while maintaining or improving quality.

Leverage Your Credibility

The client knows you can relieve her pain. Finally, you’re in position to move. You have three objectives:

Get a Seat at the Big Table: You have earned your spot on the business management team for this client (and other clients, if you manage a portfolio). Make sure you get it. Tell the client, “You know, if I’m involved in more of our regular status calls, we can knock off a lot these nagging issues faster.” You’ll get the invite.

Relieve Pain First: You’ve solved one problem, but more remain. Human nature tends to escape pain before pursuing pleasure, so continue the strategy that worked the first time. Talk to people, find out their biggest problem, align client management pain with client workers’ pain, and solve the biggest problems first.

Move the Program Forward: You’ve lain the groundwork to sell big ideas to the client. You know that a content management administrative tool can save the client $20K a year. While your development team was knocking out the problems, have your architects or designers prepare the proposal for the big things that move the program forward. Some of this effort will have to hit your R&D budget or its equivalent. But these are the things that provide real value to your organization by providing excellent value to your client.

Tailor this strategy and these tactics to your situation. If you’re lucky, you already have a seat at the big table and your organization is already practiced in constantly adding value to its products and services. If you’re like most of us, though, you need to chisel away at the day-to-day tasks to provide the time to develop the big, valuable pieces.

As Drucker says, managers are judged solely on the value they deliver to their organizations. Finding a strategy to delivering big things is your first duty.