No Rhyme or Reason

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That's the title of Andrew Cuomo's report on the compensation practices of financial companies. It's quite a disturbing report. What it concludes from data supplied by the major TARP recipients is that there is no logic behind compensation practices other than to pay top dollar no matter what the firm's results are.

For example, Citicorp lost more than $27 billion in 2008 yet paid bonuses of $5.33 billion. Or take Merrill Lynch, which was saved from extinction. It also lost more than $27 billion. It was more conservative with bonuses; it only paid $3.6 billion. The pattern was the same with all the companies that took our money. To cite just one, Bank of America's 2008 net fell from $14 to $4 billion, yet its compensation remained at $18 billion.

The report contains several interesting charts. The one that really interests me is in Appendix A. It compares the earnings per employee to the bonus per employee. So that with Citigroup, for example, it lost $85,812 per employee but was able to pay out bonuses of $16,512 per employee.

Other charts of interest are found in Apppendix C. Here you'll compare compensation to revenue and net income. In 2007 our friends at Citicorp paid out in compensation 952.03% of net income; the company made $3,617,000 and paid out $34,435,000 in compensation.

What is Geithner and company doing about changing the financial structure of this country? I may not live to see it, but I can guarantee that we'll see a recurrence of the current disaster fairly soon unless there are fundamental changes made.

Another View of the Gates/Crowley/Obama Imbroglio

The following appeared in the current issue of the MV Times. It was written by Peg Regan, the former principal of the local high school.

Skip Gates is my neighbor. He doesn't live next door or even on the same street, but anywhere I see him on the Island, I know him just the same. I see him at Slice of Life having lunch. I see him politely stopping his car on State Road, letting the backed up vehicles on Edgartown-Tisbury Road turn. I see him vacationing with his children and his wife. I've watched how he respectfully observes the crosswalks in OB that give hundreds of pedestrians the right of way. He's patient when waiting for the boat just like the rest of us. He even opens his house in the summer for Vineyarders of all backgrounds to share in the publications and achievements of his colleagues.

So what surprised me most about the arrest of Dr. Gates in Cambridge in his own house and neighborhood on Ware Street is that those year-round neighbors who, living within throwing distance of Harvard University, do not know who he is.

Perhaps people in Cambridge do not watch PBS or Oprah or read the New York Times editorials or the Boston Globe. Maybe they don't subscribe to the New Yorker or follow any of the published works of this pre-eminent scholar. Those of us who see him two months a year at most may, in fact, know him better than those who have lived near him on his beautiful tree-lined street. What one person on Ware Street has resurrected is a primal fear that any person, but especially a man of color, can still be cuffed, fingerprinted, and removed from his home by his own neighbor.

It reminds me of another neighborhood a few years ago where I was carrying a heavy tray into my house. As the hinged door sprung shut, my neighbor on the other side of the fence heard breaking glass and yelled, "What's going on over there?"

"I broke my door," I said. "It's just me being clumsy."

He recognized my voice and came over to help clean up. No police were called. But then again he knew me. He recognized my face and my voice. Not because I'm famous, but because he knew my name. Neighborliness means knowing your neighbors, checking next door when their mail piles up, returning packages that mistakenly get delivered to your house instead of theirs, and watching over each other's pets and plants; but no neighbor I ever knew called the police when I returned from a trip and couldn't unlock my door.

The inauguration of President Barack Obama signaled a hope in this country that suddenly we knew each other. That we would suddenly begin recognizing one another on the street and say, "Hey."

The arrest of Skip Gates has set that hope back a bit by offering help as a way of life for everyone in America - not just for those of us lucky enough to name one another.

"Guests, like fish, begin to smell after three days"

It's an old saying, but it is the one that Col. Timothy R. Reese uses to introduce his argument that we should declare victory in Iraq and go home. I'd never heard of Reese but he is Chief, Baghdad Operations Command Advisory Team. Earlier he was the honcho of what the Times calls the "the Army's premier intellectual center". I suspect he knows just a little bit more about the situation in Iraq than I or you do. His fundamental point, based on the analogy in the title of this post, is that "we now smell bad to the Iraqi nose". He subscribes to the theory that sometimes it's okay to be good enough. Thus, he asserts that the Iraqi army is good enough to handle any attempts at revolution by Iraqi dissidents. As importantly, Reese feels that we are not making either the government or the army of Iraq any better by hanging around. A quote from Reese - Iraq is not a country with a history of treating even its welcomed guests well.

He gives several examples of the lack of progress in essential services and good governance:

1. The ineffectiveness and corruption of GOI (Government of Iraq) Ministries is the stuff of legend.

2. The anti-corruption drive is little more than a campaign tool for Maliki

3. The GOI is failing to take rational steps to improve its electrical infrastructure and to improve their oil exploration, production and exports.

4. There is no progress towards resolving the Kirkuk situation.

5. Sunni Reconciliation is at best at a standstill and probably going backwards.

6. Sons of Iraq (SOI) or Sahwa transition to ISF (Iraq Security Forces) and GOI civil service is not happening, and SOI monthly paydays continue to fall further behind.

7. The Kurdish situation continues to fester.

8. Political violence and intimidation is rampant in the civilian community as well as military and legal institutions.

9. The Vice President received a rather cool reception this past weekend and was publicly told that the internal affairs of Iraq are none of the US’s business.

He goes on to argue that we are not getting our money's worth from the work we are doing with the Iraqi military. Again, from Reese's memo:

1. If there ever was a window where the seeds of a professional military culture could have been implanted, it is now long past. US combat forces will not be here long enough or with sufficient influence to change it.

2. The military culture of the Baathist-Soviet model under Saddam Hussein remains entrenched and will not change. The senior leadership of the ISF is incapable of change in the current environment.

a) Corruption among officers is widespread

b) Neglect and mistreatment of enlisted men is the norm

c) The unwillingness to accept a role for the NCO corps continues

d) Cronyism and nepotism are rampant in the assignment and promotion system

e) Laziness is endemic

f) Extreme centralization of C2 is the norm

g) Lack of initiative is legion

h) Unwillingness to change, do anything new blocks progress

i) Near total ineffectiveness of the Iraq Army and National Police institutional organizations and systems prevents the ISF from becoming self-sustaining

j) For every positive story about a good ISF junior officer with initiative, or an ISF commander who conducts a rehearsal or an after action review or some individual MOS training event, there are ten examples of the most basic lack of military understanding despite the massive partnership efforts by our combat forces and advisory efforts by MiTT and NPTT teams.

3. For all the fawning praise we bestow on the Baghdad Operations Command (BOC) and Ministry of Defense (MoD) leadership for their effectiveness since the start of the surge, they are flawed in serious ways. Below are some salient examples:

a) They are unable to plan ahead, unable to secure the PM’s approval for their actions

b) They are unable to stand up to Shiite political parties

c) They were and are unable to conduct an public relations effort in support of the SA and now they are afraid of the ignorant masses as a result

d) They unable to instill discipline among their officers and units for the most basic military standards

e) They are unable to stop the nepotism and cronyism

f) They are unable to take basic steps to manage the force development process

g) They are unable to stick to their deals with US leaders

The June 30th pullback is not having a positive effect with regard to the Iraqi military command. To wit,

1. Iraqi Ground Forces Command (IGFC) unilateral restrictions on US forces that violate the most basic aspects of the SA (2008 Security Agreement)

2. BOC unilateral restrictions that violate the most basic aspects of the SA

3. International Zone incidents in the last week where ISF forces have resorted to shows of force to get their way at Entry Control Points (ECP) including the forcible takeover of ECP 1 on 4 July

4. Sudden coolness to advisors and CDRs, lack of invitations to meetings,

5. Widespread partnership problems reported in other areas such as ISF confronting US forces at TCPs in the city of Baghdad and other major cities in Iraq.

6. ISF units are far less likely to want to conduct combined combat operations with US forces, to go after targets the US considers high value, etc.

7. The Iraqi legal system in the Rusafa side of Baghdad has demonstrated a recent willingness to release individuals originally detained by the US for attacks on the US.

Reese makes the point that we are "merely convenient targets for delivering a message against Maliki by certain groups." But the Iraqis will try to get as much out of us as possible while making sure we have little say in what goes on in Iraq. Reese quotes a political observer, “We have lost all strategic influence with the GoI and trying to influence events and people from the tactical/operational level is courting disaster, wasting lives, and merely postponing the inevitable.”

His view of the Iraqi government - "We now have an Iraqi government that has gained its balance and thinks it knows how to ride the bike in the race. And in fact they probably do know how to ride, at least well enough for the road they are on against their current competitors. Our hand on the back of the seat is holding them back and causing resentment. We need to let go before we both tumble to the ground."

Surprisingly, Reese recommends a withdrawal date of August 2010, only 15 months from the scheduled date. The argument he makes is, to me, much stronger. We should start packing up today.

Another Can't Miss Strategy

Since the dawn of the modern world, man has devised umpteen ways to "beat the market". When any of these ways becomes really popular, the market tanks. Witness, for example, dynamic portfolio insurance, a theory which claimed that you could define how much money you were willing to lose if the market fell and that is all you would lose. The theory said it would be so. The theory became popular in the 1980s and October 1987 saw a 20% drop in the market on October 19. This is but one example, there are plenty more you're thinking about now.

Paul Wilmott writes about the latest craze - high-frequency algorithmic trading - in today's NY Times. This is a can't miss strategy where the computer does the buying and selling. It analyzes the data and in milliseconds (that's thousandths of a second) decides to buy or sell a particular stock. Wilmott fears that the herd instinct will lead to many 'investors' adopting the strategy and, like most crazes in the world of finance, winding up with the short end of the stick. The real problem in Wilmott's view is not the losses suffered but the impact this may have on the economy.

Wilmott concludes with this:

Buying stocks used to be about long-term value, doing your research and finding the company that you thought had good prospects. Maybe it had a product that you liked the look of, or perhaps a solid management team. Increasingly such real value is becoming irrelevant. The contest is now between the machines — and they’re playing games with real businesses and real people.

A Different World

Well, our federal government has announced that they will be saving $102,000,000 in the "current fiscal year". True, it's chicken feed when compared to our $2 trillion deficit, but it's a start. The real question is why, since there are a heck of a lot of obvious cuts, weren't many of these cuts implemented years ago, as they would have in most companies I worked for. Here are some of the items mentioned in the WSJ article:

"The Forest Service will no longer repaint its new, white vehicles green immediately upon purchase. The Army will start packing more soldiers onto R&R flights. The Navy will delete unused email accounts.

The Air Force has proposed replacing its specially formulated jet fuel with commercial aviation fuel, which it will top up with some military additives. That will save nearly $52 million next year, when the program begins.

The Office of Thrift Supervision, a division of the Treasury, identified unused phone lines costing $320,000.

By increasing the number of soldiers traveling on each airplane chartered for rest-and-relaxation leave, the Army will save $18 million in the next few months. The Navy will save $5 million a year by deleting inactive Internet accounts to configure their computer networks more cheaply.

The Justice Department estimates it can save $573,000 through fiscal 2010 by setting up its printers and copiers to use both sides of the paper. By emailing some documents instead of printing them out, the Department of Homeland Security will save $318,000.

Both Homeland Security and the National Highway Traffic Safety Administration have pledged to take the same step that has sent the newspaper industry into a tailspin: They will start getting their news online free, rather than renew their subscriptions. Homeland Security will save $47,160, or 0.0000026% of the deficit.

The Coast Guard realized that maintenance schedules for its 1,800 small boats assumed they were for recreational use such as water-skiing or bass-fishing. By adjusting maintenance schedules to reflect what the Coast Guard actually does, the agency discovered it can save $2 million a year.

The Federal Emergency Management Agency is going to save $3.8 million by refurbishing and reusing or selling its emergency trailers -- like the ones provided to people displaced by hurricanes -- instead of ditching them."

Milking the PBGC for His Own Benefit?

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That's the question it looks as though Charles Millard, ex-Director of the Pension Benefit Guaranty Corporation (PBGC), will eventually have to answer. We know that his investment strategy did not work well. We know he used his position in his job search. What we didn't know is his closeness with Goldman Sachs and BlackRock, two firms who did well advising PBGC. The NY Times talks about that closeness in a recent issue. The firms did do well while Millard was in charge; however, new management has cancelled their contracts amid questions about Millard's impartiality during the bidding process. These questions will likely lead to further investigations re Millard, who, by the way, remains unemployed.

Making Transportation Safe

Joseph Coughlin, an MIT leader in transportation, logistics and aging, has an op-ed in today's Boston Globe that should be read, especially by our leaders. The article was triggered by the current noise surrounding driving by elders.

Coughlin starts out by reminding us that many accidents are caused by people's health conditions, not their birthdays. He claims that 110,000,000 of us (more than one-third of the population) suffers from a chronic disease; 60,000,000 suffer from two or more chronic diseases. Therefore, the issue is health, not age when it comes to safe driving.

Coughlin has a number of prescriptions, the first of which is to test annual samples of all drivers to determine their fitness for driving. He recognizes that most of us - whether age 80 or 40 - do not want to be tested. He urges families to be more proactive in monitoring the driving of their members who are at risk.

He is a proponent of government action to make this a safer nation. The government should encourage industry to do a better job in developing technologies that improve safety on the road. Public transportation needs to be redesigned to meet today's needs, which have moved beyond the need to get people to work; we need to design public transportation systems that serve us throughout our lifetime.

And you thought most TV was just boring

It can also reduce population growth, a concern of India. The Minister of Health and Family Welfare, Ghulam Nabi Azad, has a solution to the problem: watch television at night. In his words, “If there is electricity in every village, then people will watch TV till late at night and then fall asleep. They won’t get a chance to produce children. When there is no electricity there is nothing else to do but produce babies.” He thinks watching tv can cut the population growth by 80%.

Seeing Eye Dogs for the Mind

A couple of weeks ago the Wall Street Journal opened my eyes about dogs. I don't like dogs, but this article illustrated how useful and 'humane' dogs can be. Puppies Behind Bars is a non-profit that has been able to convince prisoners that they can train dogs. I'd say they have succeeded. The dogs they've trained to help veterans are, to me, unbelievable. For example, the dogs can recognize changes in a person's breathing, perspiration or scent that can indicate an imminent panic attack. They can wake people from nightmares, help people differentiate between hallucinations and reality.

Other capabilities the dogs can learn: turn on lights with their noses, help load washing machines, retrieve food from shelves, help people take pills by listening to wristwatch alarms. To me, it's amazing.

2 More Dumb Congressmen

You really have to wonder how so many idiots get elected to national office. Brian Baird of Washington and Dana Rohrbacher of California illustrate the wonderfully bright ideas our leaders have. These two are worried about what will happen to the country in the event that most of the Congress was wiped out in an attack. The solution proposed by these democratically elected geniuses is to have each Congressman appoint three people now, one of whom would be chosen by the Speaker to succeed the Congressman in the event that the dire prospect eventually occurs.

Do these guys know that they were elected and not anointed?

A Somewhat Different Take

In a recent NY Review, Robert Skidelsky relates the financial crisis to the U.S. "imperial mission". The emphases in this concluding excerpt from Sidelsky's article are mine.

The new arrangement allowed the United States to continue to enjoy the political benefits of "seigniorage"—the right to acquire real resources through the printing of money. The "free" resources were not just unpaid-for imported consumer goods but the ability to deploy large military forces overseas without having to tax its own citizens to do so. Every historian knows that a hegemonic currency is part of an imperial system of political relations. Americans acquiesced in the unbalanced economic relations initiated by East Asian governments in their undervaluation of their currencies because they ensured the persistence of unbalanced political relations.

A willingness by the US government to end macroeconomic imbalances thus depends on its willingness to accept a much more plural world—one in which other centers of power in Europe, China, Japan, Latin America, and the Middle East assume responsibility for their own security, and in which the rules of the game for a world order that can preserve the peace while effectively tackling the challenges posed by terrorism, climate change, and abuse of human rights are negotiated and not imposed. Whether, even under Obama, the US is willing to accept such a political rebalancing of the world is far from obvious. It will require a huge mental realignment in the United States. The financial crash has disclosed the need for an economic realignment. But it will not happen until the US renounces its imperial mission.

Plus ca change,

plus c'est la meme chose. The more things change, the more they stay the same. Now the proponent of change has taken to issuing signing statements ala his predecessor, Mr. G.W. Bush. This week he signed his second. In March he disagreed with the Omnibus Spending Bill and gave his interpretation of the bill. Now, he didn't like the clauses related to the IMF in a foreign-operations appropriation bill. While Obama has quite a way to go to match Bush's pace (2 in 6 months vs. almost 2 a week), in light of Obama's continuation of many Bush policies, I ask what's next?

Shooting off one's mouth

Rachel Maddow skewers Ralph Peters, who felt that the Taliban should kill PFC Bergdahl who has been captured by the Taliban.

Visit msnbc.com for Breaking News, World News, and News about the Economy

How does this guy get away with this crap?

In Friedman's world, Iraq was all about bursting the terrorism bubble and war was the only way to do it. He fails to ask the basic questions of "Was it worth it" and "Are we and the world better off today".

"I wish I may, I wish I may, I wish I may"

Image by Army.mil via Flickr

"I can make it happen. By clicking my heels together and adding more troops the war in Afghanistan will turn in our favor very soon." That's the Wonderland hope of our leaders, at least as spoken to us, the masses.

But to Senator Feingold's question in a Senate hearing "Are we sure that when we...get up to a level of 70,000 troops, are we sure that that isn't making the situation in Pakistan potentially worse?" our special envoy to Afghanistan, Richard Holbrooke, replied that the troop buildup "could end up creating a pressure in Pakistan which would add to the instability." Fiengold follower up with "Are you sure that the troop buildup in Afghanistan will not be counterproductive vis-à-vis Pakistan?" Feingold asked. "No," Holbrooke replied. "I'm only sure that we are aware of the problem."

And here's what Mike Mullen, head of the Joint Chiefs of Staff, had to say at the same hearing. "Can I [be] 100 percent certain that won't destabilize Pakistan? I don't know the answer to that," Mullen said.

It's beginning to sound like Johnson and Vietnam all over again.

Some Good News for Us from Goldman Sachs

They've bought back their warrants at a reasonable price. Treasury claims we made 23% on our money on an annualized basis. The really good news is that Treasury was able to get Goldman to almost double their initial offer of $650,000,000. Even Elizabeth Warren and Linus Wilson think it was a fair deal. Are Geithner and company smartening up?

Living in a Perfect World

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Socialized Medicine and Me

By and large I've had a good experience with government-sponsored health care.

My first experience was in Ireland about 25 years ago. My six-year-old broke his arm a few hours before we were to fly to Shannon. The doctor at Newton-Wellesley Hospital set the arm, wished us well and told us to see a doctor in a couple of weeks. On arrival in Dublin two weeks later I made an appointment with a doctor recommended by the owner of the B&B we stayed at. The first thing I noticed was the appointment was made for the next day. The second thing was that we did not have to wait for hours; the appointment was kept at the designated time. The third thing was the doctor himself. Not only was he courteous, professional and knowledgeable, but he had reached the stage in which he was advising medical students, 6 of whom were observing the doctor treat my son. The fourth thing was the result; my son was able to spend the last two weeks in Ireland sans sling and, as far as I know, his arm has given him no problems since.

My second experience was in Canada. My experience was quite limited; I think my wife and I made one visit each to a doctor. Very few of my Canadian friends had anything negative to say about the system. However, I was struck by two facts. It seemed that a fair number of doctors were moving to the U.S. in hopes of increasing their income. Some Canadians were using the operating rooms of U.S. hospitals because of delays in the Canadian system . Not as good an experience as in Ireland, but tolerable.

My third experience was in the U.S. I have had a couple of occasions to use Medicare and, since we also have a Medicare supplement, I've been quite pleased with the service. All bills have been paid within a reasonable time. I don't need to mess with tons of paperwork. And the costs are reasonable.

We like to think that our country is the best in medicine and, to a degree, there is a lot to be said for that point of view. Many of the advanced procedures have been invented here, but a quick reference to a list of Nobel Prize winners shows that we are not alone in our medical expertise. More importantly, we are behind in the things that count to you and me - mortality and general health. Again, look at any list of the health of people around the world and you'll find that we are nowhere near the top of the heap. We need a new system. We'd be much, much better off stopping our need to control the world, thus freeing up a ton of money that could be used to ensure that we all get top-notch medical care.

Sprinting into extinction?

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After my first encounter with Sprint Nextel Corporation, I get the feeling that the company is not long for this world, or at least this world as I would like to see it - one where companies really care about their customers and don't mouth off about it.

In work we bought several cell phones from Sprint partly on the basis that the phones would be free as Sprint would issue us a credit for them. There was no credit on our May invoice, so we called to inquire. The result after calling the salesperson and so-called Premium Customer Care was that the credit was in process. When the June invoice also failed to provide the credit and we received a shut-off notice, we called again. This time we were met by people claiming that they couldn't stop the shut-off notice and people also claiming that the credit was in process. These calls in both May and June were exercises in frustration - people not returning calls, waiting on hold for a half-hour or longer, calls disconnecting. For a telephone company, Sprint knows little about telephone courtesy.

Since the date for our shut-off was approaching, I sent a letter via Fedex to Dan Hesse, CEO of Sprint, asking him to review the situation. The letter was sent to the corporate address (Overland Park, Kansas) on Sprint's web site. Hearing nothing after a couple of days, I called Mr. Hesse. Sorry, I tried to call Mr. Hesse. One automated service that answered a number on the web site said that no number existed for Mr. Hesse. Others just disconnected or routed me to another automated service. However, after 15 minutes of calling various numbers and hearing how important my call was, I did finally get to 'Executive Services' which handles calls such as mine. The person I spoke with did have the ability to look up our account, or at least part of it; this took another 20 minutes. But, again, his hands were tied as our account records were incomplete.

So, we've wasted many hours trying to get Sprint to live up to its word. And, come to find out, we also wasted money on Fedex as Sprint's executive headquarters are in Dallas/Ft. Worth, which was not mentioned on the web site. Is this the type of behavior that will retain customers? I think not.

Why we need the Consumer Financial Protection Agency

The Meaning of Names

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I know that Washington, DC, is a different place, a place where words have currency but not meaning. For example, what do you think the National Highway Traffic Safety Administration (NHTSA) is supposed to do? Make our highways safer, right? Well, this mission is only applicable if our dear legislators say it is. Witness the latest example.

It's been long known that using a cell phone while driving is not a good idea. That's what NHTSA tried to determine back in 2003. They proposed and began a long term study of 10,000 drivers to get at the facts. They did a ton of research which supported the thesis. But, someone at NHTSA or its overseer, the Transportation Department, decided that the conclusions would upset Congress. So, the study was not published. The research notes, however, have been published by the NY Times.

Would cellphone use while driving be as prevalent if the study had been allowed to be finished and the public made aware of the problem? We'll never know.

“Ten Commandments for Ambitious Foreign Policy Wonks”

Stephen Walt has a version of the Ten Commandments that would probably appeal to Andrew Bacevich. It certainly appeals to me.

#1. Thou Shalt Not Question U.S. Membership in NATO.

#2. Thou Shalt Oppose the Spread of Nuclear Weapons.

#3. Thou Shalt Not Question the Need for a Nuclear Deterrent.

#4. Thou Shalt Not Question the Desirability of American Primacy.
or North Korea, or ....

#5: Thou Shalt Not Call For an Accommodation with Cuba, Iran, or….). #5A: The Chamberlain Corollary: Under no circumstances should one
use the word “appeasement,” except as an accusation directed at ones’ political opponents.

#6: Thou Shalt Not Criticize the Council on Foreign Relations, the Carnegie Endowment for International Peace, IISS, Brookings, or other major foreign policy institution.

#7: Thou Shalt Not Take the Armed Forces’ Name in Vain.

#8: Thou Shalt Acknowledge the Importance of Human Rights, Democracy, and Other American “Values.”

#9: Thou Shalt Not Question the Right of the United States to Intervene in Other Countries.

#10: Thou Shalt Not Favor Negotiating with “Terrorists.”

Reconciling the Factions in Iraq

Michael Eisenstadt and Ahmed Ali are not optimistic about Iraq. They, like many others, believe that reconciliation between the various parties is a sine qua non for a peaceful Iraq. But there are many challenges, to wit

Vested interests.

Persistent violence.

Elusive consensus.

Justice denied.

Demographic complexity.

Multilayered conflicts.

Iraqi political culture.

Election-year politics.

External meddling.

Toilet Troubles

The main toilet on the International Space Station has broken down again. Fortunately, there is a toilet that is working on the Russian side of the station. And, then, there are always the old urine collection bags if things get really bad.
Or, maybe the smell will get so bad they'll have to take a break outside.

Both toilets were built by the Russians. Is the one installed on the US side of the station a lemon?

The Crisis Is Over and We Can Continue on Our Merry Ways

At least Goldman Sachs thinks so, to judge by its reported decision to pay the largest bonuses in its history. What has it been? 9 months since the economic world was ending? Now, things are back to normal and the money is rolling in again. Goldman has proven once again that it is more important than our government as the administration seems content with the status quo ante and is unwilling to really confront the compensation issues that played a major role in the crash.

Lucian Bebchuk has an excellent article as to the problems associated with the compensation structure of Goldman and its ilk. He echoes my concern relative to compensation issues and proposes some sensible reforms in the area.

Seeing the world in style

It's not only our federal leaders who have a penchant for traveling on our dime. Even local leaders have caught the travel bug. Today's Boston Globe reports on the pension boards for the Town of Plymouth and for Plymouth County. They seem to have a need to attend as many 'industry' conferences as possible, whether the conferences are on Cape Cod or in Palm Springs. To be fair, they only send a couple of their members to out-of-state conferences. Everybody - board members and staff - goes to the Cape Cod conference. Need I say that this travel is not via Greyhound, nor do they eat at the local McDonald's. Each of the two boards has spent over $100,000 in the past five years on travel. Could their funds have used the money?

Of course, this is not the place to talk about why the state has 106 public retirement boards, one of which has only $7,000,000 in assets. That's a topic for another day.

Hype vs. Reality

In the past month or so it seems that every week the local media has reported a fatal automobile accident involving an elderly driver. One gets the impression that driving privileges should be suspended for anyone over 75, as most of these drivers are an accident waiting to happen. Well, that is not the case. 7% of Massachusetts drivers are aged 75 or over, but they account for only 3.6% of the accidents. But, when the older driver does get into accident, it is more likely to be a fatal accident, largely because the older driver is just not as healthy or strong as he once was and he becomes the fatality.

However, as I age it's clear that I'm not as good a driver as I once was. Yet, renewal of my driver's license is just as simple as it was when I first drove. There will come a time when my reactions will not be as swift as they should be. Shouldn't I be tested in some way to ensure that I am still a capable driver? That's not the case today in Massachusetts. It may be the case in a few years when I will have reached the stage where I should be tested, for my safety and that of others.

Music hath charms to soothe the savage beast

A major find while I was away - German archeologists have found eight flutes which were made over 35,000 years ago. Some were made from ivory, others from animal bone. Amazing!

Get elected and see the world

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Of course, it's important for our Congressmen and Senators to visit other countries. How else can they feel qualified to vote on issues affecting these countries and the world in general? And, of course, the Congressmen or their staff could not arrange these trips; we pay more than 20 government employees to do so. And, of course, we would not want our representatives to fly on commercial aircraft; so the Air Force keeps 16 planes available for travel by our representatives. The average cost for one of these Air F orce trips is $12,000 an hour. You don't mind paying your share of that, do you? Heck, I didn't mind paying my share of the $22,000 Rep. Brian Baird spent on hotels and meals on his trip to the Galapagos Islands; he did need to go there to learn about global warming. And, of course, his wife went along. What else would they talk about over dinner?

Another "I didn't know that" Moment

I knew that the FDA does not have as much power as it should. But I would have thought that if they came to my food plant and asked for access to my pest control records, environmental-testing programs and other data related to the safety of the food I produce I would have to comply. Well, that's not the case. For example, the Nestle plant in Danville, VA, was able to say "no" to an inspector's request even though Nestle has recalled 300,000 cases of refrigerated dough products thought to be the cause of an outbreak of E.coli which put 34 people in the hospital and made many more very ill. The dough was made at the Danville plant.

In a previous inspection at the same plant Nestle refused to supply its consumer complaint file or to allow photos to be taken or some records to be copied. This refusal pattern is not unique to Nestle; many other food companies operate the same way.

So, who is looking out for our interest in not eating germ-free food?

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Hypocrisy

Image by Mike Licht, NotionsCapital.com via Flickr

The more you read about Governor Sanford of South Carolina, the more you marvel at what he has been able to get away with. The really sad part is that Sanford is not unique in his duplicity. Every state has people like Sanford who care a not a fig about their constituents. These people will say anything to get elected and to stay in power so that they can feed out of the trough that we pay for.

The Associated Press documents the governor's air travels where he sits in the front of the plane and his staff sits in the rear. His flight costs thousands of dollars more than those of his staff.

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It's a Tough Job Market

So, naturally one of the country's largest employers - your federal government - is doing its darndest to recruit capable people. It will pay employees' student loans, or at least $10,000 a year towards these loans for six years. It offers what is called job-related training. But what relevance courses such as "Home Buying for Beginners". "The Senate's Bust Collection", "Antibiotics: Use and Abuse", Punctuation Pointers", "Emotional and Social Intelligence", fitness, yoga, pilates have to the job of running our government is an open question. They are even offered a course in effective writing, which, as the Chief Administrative Officer points out, raises the issue of why there should be a need for such a course.

The Senate has 16 people working in the Office of Education and Training. The House has its own group. In the most recent year for which there are numbers (2007) we spent over $40,000,000 on these perks. Money well spent? You have to be kidding me.

It's Been A While

I've had a number of personal obligations to fulfill over the past three weeks, have been out of touch with the larger world and have had no access to the web. My snail mail box is full with unread newspapers and magazines, so I guess I'll be resuming regular posting soon.

My occasional exposure to the so-called wider world showed that we still have trouble addressing real issues. Was the death of Michael Jackson worth almost a full week of non-stop Jacksonia on many television stations? Shouldn't some of the national media be reporting on our wars or our still-troubled economy or the administration's attempt to preserve our failed banking system or...........?