WordPlay - Populism, Problems, and Solutions

Ted Williams on Incumbency

    Back in the late 40's, as Ted Williams recounts in his autobiography, he was at the plate in a game (say) against the White Sox. Williams had an eagle eye. The first pitch was a ball, but just barely. The umpire, I believe Jocko Conlan, called it a ball. The White Sox dugout erupted.

    "Y'er hero worshiping, you jerk'

    'Ya give him everything!'

    The second  pitch arrived. It too was a ball, but even closer. Williams laid off and the umpire called it correctly. The dugout became more vehement and  more than a little profane.

    'You sonofabitch, how do you sleep at night!!'

    'How much does he pay ya !!'

    The third pitch came in, closer yet, William took it, and Conlan called another ball. The dugout erupted - the works, four letter words, four syllable words, three syllable words, the whole vocabulary. Conlan walked over to the dugout and threw the entire bench out - something like 11 players. As each of them filed by, they REALLY let go - you miserable cocksucking sonofabotch, etc.Impervious, he took it. The last guy in line, however, had a different attitude. He was almost in tears.

    "Jocko," he said, "you know me. I didn't say a word. I never do.I've never been thrown out of a game in my life. What am I going to tell my wife? What am I going to say to my kids?

    To which Conlan, absolutely indifferent, replied:

    "It's just like a raid on a whorehouse, Charley. The good go with the bad."

    And this is my answer to the the thought that some incumbents should be spared in the bloodbath that is to come in five weeks.

    The good go with the bad.

    Because it IS a raid on a whorehouse. Literally.

   

Kleptocrats

Martin Mayer, the great economics popularizer, wrote in his analysis of the S and L debacle - a book that may be worth a revisit - that what dismayed him most about the whole fiasco is the way the protectors, the major law and accounting firms, had deserted ship. So far from protecting the public from the wrongdoing, they had bathed luxuriously in the money river themselves.

Too soon for final verdicts, but my hunch is that the same phenomenon has occurred here, hugely expanded. What happened in simplistic terms is that Wall Street took the home equity of people of dubious credit, leveraged it to a fare thee well with an array of financial derivatives so complex that you need computer programs to tell you whether you have won or lost, and built a house of cards that has finally collapsed.

What that means in macro terms is that the wealthy have succeeded - again - in transferring an enormous amount of wealth from the truly poor to their own pockets. Let's not kid ourselves as to who these people are. Very few people in these firms and service industries can advance without the proper pedigrees. Throughout the 90's and this decade, Wall Street was a magnet to the Ivy League and prestige law and business schools. (Try to get a job there then or now without the right background. They offer top dollar and they get top credentials.) A niece of mine graduated from Princeton in 1998. Every kid in that class wanted to go into investment banking.

Top law firms have siphoned off huge fees for legal opinions that meant absolutely nothing. Top accounting firms, same thing. We have spoken of financial executives. Look hard and you'll find Stanford and Harvard MBA's, JD's, Princeton B.A.'s, etc., etc., etc. They have the computer skills, the acumen, the connections, the arrogance (of course) and the ingrained smugness to erect the phantom pyramid, in contemptuous indifference to the common sense dangers a taxi driver could have pointed out to them. Who needs taxi driver's common sense when you've got a BS from MIT and an MBA from Stanford? Besides, they were getting rich. They have all faded away and the money is gone.

What will protect ultimately them is that they are one of US - well-educated, knowledgable, urbane - people who know that Degas painted pictures of ballerinas and Vivaldi wrote baroque music. Polite and even witty. Many of them earnest, even thoughtful. People like that don't go to jail - they just don't belong there. (I actually had to listen to that argument from an Ivy League embezzler - he did his nine months in the local jail, appalled every minute by the injustice of it all.)

Politics? Don't know, but I would guess leaning towards Obama. Most graduates of elite schools do favor him, per the polls. (Don't kid yourself; Obama is one of US.) Proponents of the ersatz, elitist liberalism that ignores all the real needs of the ordinary people in favor of some hazy, undefined notions of public good - and always with the complacent belief that WE know best.

In the meantime, it's business as usual. Steal from the poor, befriend the rich. There's nothing surer, the rich get richer and the poor have children. But, hey! in the meantime, in between time, ain't we got fun?

The Beast Shows Its Snout

(A simple country lawyer's take on the deeper significance of what has happened -  fair warning - a lot more Red Brigade than Daughters of the Revolution.)

What has happened over the the last three decades is that some of the goals of most American families have been gradually priced out of the range of the broad middle class. That includes housing and - I must add - higher education. Brokers created these sub-prime loans because a huge body of substantial, ordinary Americans couldn't afford debt service at prime - and prime is just where it has been historically, floating around six percent. These weren't people on the dole, Navy - these are grocery clerks, auto mechanics, shoe salesmen, small businessman, and so on. Two generations ago, after the Second World War, they could buy a house, take a two week summer vacation at the beach, and maybe even have a cleaning lady once a week - this on a single income. Now a huge fraction, maybe the majority, of American mothers work, and on two incomes, neglecting their children, those families still can't afford the basics of the American dream.

Let me go further, as to how serious this is. No one who buys a home gives it up easily. The homeowners didn't walk away from these debts with a song and a smile. They defaulted because they can't do it. So if our economy depends on housing starts and related activity en masse, and the mass can't afford the homes, what happens?

I will let others far more knowledgable than I describe the financial chicanery that has taken place in the major institutions. My broker tells me that a lot of the trading practices that were banned after the Gret Crash have surreptitiously been revived. The SEC has been steadily made toothless by the last four Administrations.

I will also defer to someone with more economic sense than I have to explain the macro-effects. My own explanation is the huge transfer of moneys into non-productive service industries. Doctor's compensation may be sensible, but health care continues to take an ever large share of GNP. The outrageous packages that financial professionals pay themselves is known to everyone. (The one universal theme I hear from all is that that money has to come back. These guys can't be allowed to row away from the shipwreck, as in the Gericault painting 'Wreck of the Medusa.) Our bloated, preposterous legal system has become a big, gigantic tick that sucks way, way too much blood out of it.

(When I quit my solo private practice at the end of 1989, I charged $125 an hour, and one of my partners had gone to $140. The big shops were maybe at $250 for partners, which even then was a scandal. Now it's about $700, which is just absurd. One of the cases I conducted in a small claims session the other day involved a lawyer-client case. This ordinary family lawyer working on routine cases bills at $400 an hour. He received an email from a client asking for a reference to a CPA - a tenth of an hour for reading the email, a tenth for sending back a ten word respons , $80.)

But the bottom line here is that - in my truly humble opinion (in this case) - the crisis that has emerged is the biggest issue in our society, the increasing disparity in wealth, poking its snout up from the mud. Neither the Democrats nor the Republcians ever address the issue - they both report to their respective set of plutocrats. What happened in the last ten years is that we were pretending that a lot of people who could not afford the lowest common denominator  of the Dream . . .actually could,  if we indulged in a little harmless  financial manipulation. Well . . .  they can't, and we had better start to ask how this has happened, and to do something about it - or we will find ourselves living in some sort of bastardied version of Eurpean aristocracy, and wondering how it happened.

Maybe we already do. That's a glum thought. But these are glum times.