Friday, February 28, 2014

The increasingly tiresome Paul Krugman

On the surface it may seem that the liberal economist Paul Krugman would be viewed favorably here.  He supports key initiatives like immigration reform and ramped up infrastructure spending, among other issues, that are incredibly important.  Unfortunately Krugman is so politicized that he pushes every argument too far and even stretches the truth as if we readers are all imbeciles.

In his regular op-ed column today in the NYT he throws cold water on the Trans Pacific Partnership, a deal that would bind 11 Asian nations together with the U.S. to increase free trade and abide by patent laws.  That the TPP deal has its limitations and its detractors is not unexpected, but just as another way to increase communication and information exchanges it would be a net plus, an excuse for nations to work together.

Here comes the Krugman hyperbole.  "both Harry Reid, the Senate Majority Leader, and Nancy Pelosi, the top Democrat in the House, have come out against giving the President fast track authority, meaning that any agreement can receive a clean, up or down vote."  He goes on to say in the next paragraph, "So what I wonder is why the president is pushing the TPP at all.  The economic case is weak at best, AND HIS OWN PARTY DOESN'T LIKE IT."

One could question his hypothesis about the economic case and the part that was put in caps here is not uniformly true at all.  This is a centric issue that is opposed by tea party types on the right and the Carl Levin's, Harry Reid's, and Nancy Pelosi's on the left.  Many business aligned and internationally sensitive Republicans and Democrats support it.  The real misstatement here by Krugman is that he obviously is suggesting that Reid and Pelosi represent all or most Democrats, and that is absolutely incorrect.

True, Reid and Pelosi were elected to their positions by their colleagues, but that doesn't mean that they are liked or that their opinions are at all representative.  They have power through long term relationships and horse trading, and if they are challenged and still win, the challengers will be doomed to impotent committee assignments and calls not returned.  They keep power because they have power.

With the Democrats ascendent in the House from 2006 to 2010, Pelosi then makes Boehner today almost look like a reasonable guy.  She took a brutal attack dog approach to Republicans, seeking no compromises, and undermined Obama's first two years in office in a major way.  Harry Reid took roughly the same approach and then some.  The following quote from Robert Gate's brilliant, balanced, and highly, maybe overly, detailed book "Duty"(still working on it as I read other things as well) is unfortunately emblematic of the out of control Reid.  "With all the major issues we had to deal with, my personal contacts with the Senate Majority Leader Reid were often in response to his calls about Air Force objections to construction of a windmill farm in Nevada(his home state) because of the impact on their radars.  He also once contacted me to urge that Defense invest in research on irritable bowel syndrome.  With two ongoing wars and all our budget and other issues, I didn't know whether to laugh or cry."

The biggest problem with Krugman is that he knows when he is exaggerating or not being straight for political impact.  He is read or scanned here because it seems necessary to keep up with him, and not because it is, generally speaking, worthwhile reading.  His analysis seems to be compromised by his agenda.

Thursday, February 27, 2014

"Little Failure, A Memoir" from Gary Shteyngart

The first question that comes to mind with this book is "what is someone in their early forties doing writing a memoir?"  Given the amount of chemicals and alcohol he details ingesting, maybe he wanted to get his early life down on the page while it's still fresh, and there.  The better answer is that he sees an immigrant story that is somewhat universal but rarely told in such a blunt and self-deprecating way that gets to the difficult truth of the experience.

This book, to use a cliche, "pulls no punches".  Coming to America from Leningrad at the age of six with his parents and a grandmother, he has a long hill to climb learning English and integrating himself into communities with many more prosperous families.  He slowly assimilates, accepting regular beatings throughout his childhood from classmates and frequent humiliations by his parents.  The book has integrity because one cannot fathom this being anything but the truth, given the unattractive character he paints(himself) at many points.  He notes that his parents finally began to get along with each other, and with him, when he left for college, was no longer around.

He wanted to be a writer and stuck to it despite his parents fervent desire that he be a lawyer.  Through a quick and fortuitous series of events at the age of 29, he went from writing in anonymity,  poverty, and being a mooch extraordinaire to having his first book published, one that he viewed as still a work in progress.  "The Russian Debutante's Ball" was a major success.  He followed that with the equally successful "Absurdistan" several years later.  At the time that he was writing these books he went through a series of mostly dysfunctional relationships that he needed, mostly is said as one with a girl from Raleigh, N.C. could only be called redemptive.

Those first two books seemed to be based on the premise that every other sentence needed to be a punch line for a guffaw.  Here, they eventually seemed exhausting but the younger reading public took to them in a major way.  "Super Sad True Love Story" mostly broke that pattern, and "Little Failure" leaves it behind.  Not that this memoir doesn't have its humorous twists and turns, but non-fiction often leaves a jagged edge beneath the laugh.

This unexpected memoir works.

Wednesday, February 26, 2014

Long Island Power Authority(LIPA) replaced by who...

The blatantly incompetent managers of LIPA finally have been relieved of their authority after the power disaster that prevailed as a result of Hurricane Sandy, their incredible mismanagement, and lack of any useful knowledge.  It is unclear whether those managers and board members of LIPA  are still on the union arranged payroll, but rumor has it that they are still being paid.

Whoever chose the replacements should now be investigated.  PSEG(Public Services Electric & Gas Company) now handles all electric on Long Island.  They provide this service to much of New Jersey and now we get them here.  Couldn't we have passed the baton to another company, one from a less corrupt and bureaucratic state at least.  The one remarkable change with PSEG is that electric power prices have now risen dramatically.  When our last bill came it looked like the kind of bill we would get in the summer when the air conditioning was on.  Two of us here, using lights carefully, listening to the radio, using the computers, watching television, and no space heaters.  The bill was unbelievable.

National Grid has been handling gas for power and heat, and their service is non-existent.  If something goes wrong with your furnace they provide no service.  You're on your own.  Their billing system is broken and it is impossible to reach a customer representative on the phone.  Not kidding, they never answer the phone, wait as long as you want.  Their contract is over at the end of the year and will revert to PSEG, so it seems as if National Grid is skimping along.  Oh boy, and then PSEG gets to price our gas.

One wonders why government is often viewed as incompetent.  Actually, I don't.

Tuesday, February 25, 2014

Ukraine in uncharted territory

In Ukraine a tyrant has been toppled but the country is without a government, without money, and on an essentially open border with an unpredictable and empire conscious Russia.  What happens next is not clear, but certainly the situation can move quickly.

From this perspective, there are many more troubled areas of the world, say Syria, Afghanistan, North Korea, Iraq, Egypt, the Congo, Nigeria, and others, but there is some degree of predictability as to what may happen near term or even medium term in these places, much of it predictably not so good to terrible.

With Ukraine, the pull of the eastern and western parts of this politically divided country and the completely different agendas of its patrons, Western Europe, Poland, and the U.S. vs. RUSSIA,  does not have a clear outcome.

Putin was obviously the sponsor of Yanukovych, even given an understanding of his looting the Ukrainian treasury to build his extravagant residence, golf course, zoo etc.  After all, Putin lives in a 100,000 square foot palace outside of Moscow and has a huge dacha in of all places, guess, Sochi, as well as St. Petersberg.  Putin has had his stooge Medvedev already dismissing a new Ukraine government before it has even been formed and saying that the elected Parliament is illegitimate.  If a hair on the head of any Russian speaking and aligned individual of consequence in eastern Ukraine is touched, Putin could have an excuse to unleash a sizable force over the border in a day.

President Obama has said that "there will be consequences" to any adverse moves affecting Ukraine's sovereignty, but what consequences.  Would there be economic sanctions for a country that already is almost bankrupt.  That would be counterproductive.  Would Germany, Poland, or the U.S. intervene militarily?  That is highly unlikely, impossible really.  Why does Obama say these things about "consequences" and "red lines" when he will just look for a way out later to save face, his face.

The IMF, the European Union, and the U.S. are no doubt working on an economic package to bailout Ukraine, but who will they hand it to.  Putin is no doubt calculating a plan of his own, and determining who Russia would hand it to.

Uncharted territory ahead.

Sunday, February 23, 2014

Sunday filing and organizing

At this time of year with organizing for tax filing arriving, it sometimes seems as if I must have been trying to make my life complicated.  Why are there so many accounts to review and why are the accounts so multifaceted.

It may be, or is, quaintly old fashioned, but I work with paper at a time like this.  Of course, my accounts are all on the computer, but paper back-up is preferred here.  My accountant needs me to do my part.  As I approach a certain age more decisions need to be made about transferring some assets from one account to another.  Overwhelmed with tedium is the tenor of the afternoon on this pleasant and mild winter day.

Who wants to be organized?  There is no choice.  Stock picking is much more fun, but now I pay. 

Thursday, February 20, 2014

Pussy Riot Rules

Pussy Riot, the Russian performance art collective that espouses various causes including freedom of speech, prison reform, and gay rights, has been in the middle of the news over the last four days in Sochi.  They are decidedly anti-Putin who is strangely and inadvertantly their biggest promoter.  Horsewhipped by Cossacks, beaten, and sprayed in the face with irritants when they were playing their latest song "Putin Will Teach You How to Love the Motherland"yesterday in a small square in downtown Sochi, 20 miles from the Olympics, news cameras caught the event.  How could they be offered a better platform for international attention than that.

When Pussy Riot first emerged in 2011 with their unapproved song in a Moscow cathedral, one could have seen them as annoying attention seekers.  No longer.  Two members of the group then, and still members of the collective, spent almost two years in prison for "hooliganism" related to that event and when released picked right up where they left off although they no longer perform.  Continuing their campaign in 2014 shows that they do not intend to be passing fad, or just a publicity seeking stunt.  Their brazen acts could have significant negative consequences for them.

Today they left the Sochi Olympics, but released a video of some of the events during their days in Sochi.  The video includes the song "Putin Will Teach You..." and here it sounds like a reincarnation of the 1970's New York Dolls, David Johanson's group at that time.  In other words, from this perspective they sound like an exceptional band, with only one guitar and five vocalists.  That was a surprise.  They can play, and have a sense of humor attached to their seriousness.

Having seen one of the group members interviewed on some television channel last week, she was articulate, thoughtful,  and what else can I say but "normal".  Here's a wish for their safety.  

Southwest Chief --- a beautiful ride in jeopardy

The possible rerouting of the Amtrak managed Southwest Chief has been followed with great interest here.  Its path from Chicago to Los Angeles goes through many small towns in Colorado, Kansas, and New Mexico among other states, and these small towns rely on it.  It's a really big deal for the continuity of life for many of those towns apparently.

I took rides on that train in 1964 and 1966 to go to and return from Philmont Scout Ranch in New Mexico.  It was some route from Virginia to Chicago to the Chief that I don't exactly remember.  Chicago train station stands out in the memory of this former small town boy.  We were sort of chaperoned but could just do as we pleased in that seemingly vast building and the downtown around it.  The ride that began on the Chief there was amazing as it developed, with full length windows on both sides of the train and, not without great importance, that was back in the day when trains served full meals in dining cars.

It was obviously a long trip and obviously a great adventure.  I do hope the Chief survives intact for others to enjoy the views and so that the small towns it serves survive, even though the ride now is without the amenities that once existed on trains.

Wednesday, February 19, 2014

The coming equity surge

In 2014 to date, we have seen a more or less stable, a nice word for flat, equity market.  That's a broad brush look at the indexed markets, a valid indicator for sure.  Beneath the surface it's a different story as there have been opportunities in various stocks, especially small caps, and industries, notably technology, that seem to be relatively obvious and have offered almost immediate capital appreciation.  This is a situation related directly to the current equity market and not a long term prescription for investing, but it has been working in 2014.

This mixed but overall "stable" market has been in the face of rationalizing the 2013 gains and dealing with U.S. weather conditions that have been more important than many pundits want to realize.  The ubiquity of the harsh weather has had widespread impacts on consumer spending, on new home starts(duh), and on new hires, but that has all been relatively gracefully absorbed by the forward looking market.  Here that is viewed as a signal.

Barring unpredictable negative events, the underlying strength of the U.S. equity market will begin to show up as we dig out, in the South, the Northeast, and the Midwest, which pretty much covers most of America except the dried up California(not unimportant in having an impact).  The opportunities that are seen in the merger and acquisition market could begin to start a gold rush of sorts, as so much cash has been stored away at healthy corporates.  Should Congress and the Administration get embarrassed into actually starting to take some action on either immigration or infrastructure spending it would be additive in a major way, but that is unlikely as long as Harry Reid is around, one of the most dismal characters in Washington, one who inspires more animosity than cooperation even with many in his own party.

While the equity market is, as mentioned, forward looking and it may have already discounted a reasonable amount of  what is commented on here, unfolding current events can always disrupt what has been expected.  From this perspective some positive disruption seems entirely possible as the year progresses. 

Tuesday, February 18, 2014

The minimum wage debate

President Obama set the stage for the banality of this debate when he announced the increase in the minimum wage for federal employees.  His primary explanation was that the increase was "fair", which so far has been about the limit of his ability to explain his views on economics.

What if something was viewed as "fair" but would push the economy into recession?  How does "fair" relate to economics?  Obama is so patronizing and insular that he refuses to acknowledge the intelligence of the American people and actually explain the economic rationale for any of his thoughts, like his resentment of corporate America's right to determine its own salary structure with its shareholders looking over their shoulder(agree here that executive salaries are too high but that is not an easy cat to put back in the bag).

The good news is that raising the minimum wage does not threaten the U.S. economy.  In fact, the opinion here is that it could be positive, perhaps very positive, for the economy.  Why won't any of the cautiously timid Democratic leadership make such a comment.  A higher minimum wage of a meaningful amount(God only knows where $10.10 came from, Obama's number that defies explanation, but maybe that's somewhere near a meaningful starting point) would attract more people to the job market and we'll find out how many people are not working because with various benefits that's more attractive than the demands of work.

A higher minimum wage could set a more positive tone for many in the job market, and obviously lead to increased consumer spending.  The fact is that no one in D.C. can see the future any clearer than the average citizen.  There could be limits for certain sizes of business, there could be an age cutoff of some type for those under 18 --- who is trying to do anything creative.  But believe me, it's "fair".