As the old world dies

March 13, 2010

This is a follow-up to my post called “Governments shutting down services”. Tammy Bruce talked about a couple articles on the decline of Detroit, MI. One is on Detroit Mayor Bing’s plan to relocate some residents because they live in areas of the city that are largely abandoned, where the government sees no hope for recovery. The other is an article based on the account written by a Detroit blogger, which says that Nature is reclaiming parts of Detroit. New meadows and prairies are appearing that used to be developed. Wild animals are reclaiming parts of the city. The account reminds me of old Manhattan Island when it was a developing city settlement that coexisted with lush forests and country farmers who lived in sparsely populated areas.

Since 1950 Detroit has lost about 900,000 residents. Many of them have moved to Detroit’s suburbs. Unlike New Orleans, which lost a significant amount of its population due to Hurricane Katrina, there is no big push behind a recovery plan. A big reason for this is that Detroit was not hit by a natural disaster. This “disaster” has come about largely because Detroit “bet the farm” on the auto industry, which has been in decline for decades. Another cause that I think is unavoidable is Michigan’s economic policies. By this I mean their inflexibility. From the ads I’ve been seeing on TV they seem to be trying to welcome entrepreneurs, perhaps for the first time. What I’ve been hearing, though, is that Michigan’s government still doesn’t understand how to spur economic growth. So while they get points for effort, they have more to learn to really succeed.

Reviewing this information, and information from other sources, I’ve begun to wonder if we may someday see cities in California suffering a similar fate. Since the 1990s there has been an outward migration of residents from California to other parts of the country. Detroit’s and Michigan’s economic decline has taken about 4 decades. California is a larger state. So it may take longer. Then again, there is the old saying, “The bigger they are, the harder they fall.”

Edit 6-16-10: Here is a very good video analysis of “What happened to Detroit”, showing its current state of decay, done by Steven Crowder:

A question that came into my mind as I was watching this is, “If Detroit is the poster child of liberal policies, and the decrepitude it causes, why didn’t this happen to New York City?” New York has had more “political diversity” than Detroit has. It’s had liberal, moderate, and conservative mayors. For a time New York City was bankrupt and in a state of decay. Then they elected Rudy Giuliani… But then the question came to mind, “What about San Francisco?” One of the most, if not THE most, liberal cities in the country. I don’t have an answer for that one. I can say though that Los Angeles is nearly bankrupt right now.

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Obama makes a decision on Afghanistan

December 4, 2009

Well I’m glad this day has come. Obama announced on Wednesday that he’s sending 30,000 soldiers to back up the forces we have in Afghanistan. I learned yesterday on the O’Reilly Factor that in addition we’re sending in 20,000 Marines, making the total deployment 50,000. And from what I heard in Obama’s speech it sounds like he understands the reasons for this decision, which is gratifying. Stanley McChrystal expressed confidence that he has been given the forces he needs to do the job. So I’m happy to hear that. I’ve heard a little about McChrystal’s resume, and he sounds like someone who is capable of handling this situation. He has studied, and is experienced in counter-insurgency strategy. The only caution I’d give to Obama is to avoid the temptation to micromanage the war. Keep your eyes on the big picture, and “don’t sweat the small stuff”. If he can do that then there’s a good chance we can achieve our goals.

I am cautiously optimistic that we will succeed in Afghanistan, if only because we’ve been tying our hands behind our backs on some things. We’ve revealed our methods of interrogation. The rules of engagement have been changed so that if there are civilians in the vicinity of the enemy we will not attack, and we’re not allowed to enter a town until we have notified the town that we are coming (which will also alert the enemy of our movements). This worries me. This is the one aspect that, I hate to say, sounds like Vietnam. In that conflict the UN had to be notified of any troop movements. The communist North Vietnamese had moles in the UN who would relay this information to them, and they’d know just what we were going to do. I heard the story of one officer who decided to break the rules and make a sneak attack. He won the battle, but was dishonorably discharged for failing to make the proper notification before making his move. It’s stuff like that that’s going to lower morale, and possibly make the war unwinnable. You can’t win a war if you’re disabling yourself to the point that you give the enemy crucial advantages.

I wanted to address a couple things in the speech. The first thing that jumped out at me was Obama claimed that there had been numerous requests for additional forces in Afghanistan, which were denied. This was surprising, since I don’t recall even the media ferreting out such requests. I would think with all of the rancor of opposing forces against the Bush Administration that somebody would’ve leaked that back when it happened. I didn’t hear a peep about this. Former Secretary of Defense Donald Rumsfeld came out with a statement yesterday saying that he never received such a request during his years in that post (he was replaced in 2006). I believe the Obama Administration corrected the President’s statement yesterday, saying that there was one request made a year ago for additional forces, just at the end of Bush’s term, which had not yet been fulfilled.

Obama came back to the subject of closing Guantanamo Bay. I’ve written previously about my opposition to that idea. He brought up the issue of “torture” as well. I’m not going to go into another harangue about that, because I’ve already talked about why this is a false charge.

Overall I’m satisfied with Obama’s decision, and I support the fact that he’s not going to run away from this fight, at least for now. I am still skeptical about his commitment. He has a lot of opposition within his party. I understand, but I still wonder if he’s willing to stand alone on this, or at least team up with the Republicans to keep it going until the battle is won. I’ve been nothing but critical of Obama in most of my posts, but I give him praise for this. Thank you for hanging in there, Mr. President.


Oh. My. God. They really are this crazy — Part 2

September 3, 2009

This is a sequel post to Oh. My God. They really are this crazy.

I just happened to find this from Fox News today, thanks to BreitBart TV:

Say what?? Van Jones signs a petition saying that former president George W. Bush probably knew about the 9/11 attacks and allowed them to happen. For those of you who don’t know, Van Jones is President Obama’s “green jobs” czar. He’s an advisor to the President…and he at the very least entertains conspiracy theories. At worst, he believes them. I think Charles Krauthammer is right. This is a serious matter. This isn’t the first time that a public official in our government has had paranoid delusions. President Nixon believed that the Democratic Party was undermining his administration and therefor the U.S. government (funny how he put those two together, eh?). He used this as justification for the Watergate break-in that he ordered and then tried to cover up, roping the FBI and the CIA into his scheme before it was all over. We should not tolerate this in our government. Granted, Van Jones is not someone with a lot of power, but the President needs people around him who will give him their sound judgment and accurate information. Based on his actions, Jones cannot be counted on to serve the President well in either capacity. He should go, or rather, be replaced.


Obama is the law

May 8, 2009

In “The liberal/conservative divide explained” I talk about an interview with Thomas Sowell from October 2008. The interview is on his new book called A Conflict of Visions. The unconstrained vision describes Obama and the Democrats to a tee. I revisited this interview in light of the recent situation with Chyrsler.

Thomas Sowell had these relevant words to say.

From his book, A Conflict of Visions:

The constrained vision sees market economies as responsive to systemic forces, the interaction of innumerable individual choices and performances. The unconstrained vision argues that this is not how the economy operates, that it is currently obeying the power of particular interests, and should therefor be made in the future to obey the power of the public interest.

In the interview Sowell followed this up with:

They imagine that they can define what’s in the public interest, by themselves. Whereas in a market, each individual defines his own interest himself, and acts accordingly, interacting with other people and accommodating other people, and competing with other people.

I didn’t understand the significance of the situation with Chrysler until a couple days ago when I read Michael Barone’s article on it (h/t Tammy Bruce).

Barone grew up in Detroit, and said he was saddened by Chrysler’s plight…

But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.

After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.

To the untrained reader one might get the idea that Barone is saying that the Obama Administration is breaking the law, but that’s not what he’s saying. He’s saying that the Obama Admin. has in effect sidestepped the part of the bankruptcy law that would normally apply in a case like this, by coming to Chrysler before it went into bankruptcy, with a pre-packaged deal, with most of the other bond holders signing on to it. Barone talks about how all of the partners that have signed on to this deal are banks who have received TARP funds, and suggests they were pressured to go along. Some of the bond holders (hedge funds), who are not TARP recipients, objected, citing the same rule that Barone talked about, and their fiduciary duty to maximize their return for their stockholders. In other words, they’re acting the way a corporation would normally act. The others are not.

The Obama Admin. wanted to get everyone to sign on before Chrysler went into bankruptcy, but that didn’t happen. The issue was going to go to bankruptcy court, but I saw an interview with Lauria today saying that the last bond holder has caved, and the Obama Admin. deal will be accepted.

What’s being violated by this deal is the spirit of the law. The bond holders lent money to Chrysler under explicit conditions in a contract that spelled out what would happen if Chrysler went into bankruptcy. This is called secured debt and if this had been decided in bankruptcy court the judge likely would’ve said the secured creditors must be paid back first. The Obama Admin. has managed to convince the bond holders to forfeit their contractual claims and take a loss, which in most circumstances would seem real odd, because normally they would have a fiduciary responsibility to seek the maximum return they’re allowed in the interest of their stockholders (and in the case of the banks which are using TARP funds, that’s us, the taxpayers!).

Michael Barone gets to what is really troubling about this deal, and he’s the only one I’ve heard talk about it:

Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.

Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.

The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series. [my emphasis in bold italics]

A commenter to Barone’s article, named Pablo Panadero, made a good point:

It will be interesting whether Ford is allowed to oppose the deal. If the UAW actually is rewarded a piece of Chrysler, Ford will then have a union that is substancially invested in their competition. Thus Ford’s union employees will have a vested interest in seeing success by their competition. By any reading of the anti-trust laws, this is clearly a violation.

Ford should be front and center on this issue. Just imagine what will happen come bargaining time. UAW will of course select Chrysler as the strike target, and the investors (re:Obama) will be quick to grant their demands to protect the “investment”. Thus Ford will be completely screwed when they come to them for a contract. The best thing for Ford to do is then move all of their production outside UAW’s reach. 

This has all the makings a true financial disaster. But is this really Obama’s agenda? Makes me start to wonder.

Obama acts like the hedge funds are just out for themselves. They are out for themselves. That’s part of the idea, self interest, but one in which there are other people who benefit, people with pensions, people’s retirements.

In the interview I cite above, Thomas Sowell says that in the unconstrained vision the “right leaders” are put in place (“The One”, etc.), and what ends up happening is the leader becomes the law. Rather than a nation of laws we become a nation of people with all of their prejudices and foibles holding sway. The Founders of the U.S. intended for the people’s voice to be heard, but for it to be tempered by a system of competing institutions and competing interests, and a specific process that allows those interests and institutions to set the rules of the road. Obama’s regime of governing violates this idea. Instead of respecting the intent of the laws which were formed by the people’s (and business’s) representatives, he decides what principles of law will be respected. President Bush had some characteristics of this as well. Given how our structures were effectively “hacked” on 9/11 I excused his bending of some rules to help fight the jihadists.

I am making a value judgement here, because I think that the UAW and its members are in denial. They are clinging desperately to what they have left. They have their prize today, but it will continue to slip away from them. They cannot continue the way they have in the past. It is unsustainable. In the process they will continue to destroy value in our economy, and until the government turns off the spigot we the taxpayers will pay for their denial.

Any way you look at it Obama is distorting the market to fit his vision, and in the process he is distorting people’s expectations about the law as well. Obama is taking steps to try to politicize the economy, but it’s going to fail, as all attempts to do this have. Dyed-in-the-wool leftists have believed for generations that if money was directed to the right places, determined by them, that the right people (their constituents, the ones they deem to be the downtrodden) will prosper. Capitalists will be allowed some prosperity, but not as much as they’d like. Historically the end result is one that nobody is happy with. Workers do not end up prospering, and while the wealthy aren’t too happy, because they can’t find as many investment opportunities as they’d like, and they feel pushed around by the government, they end up being relatively better off than anyone else, because they’re smart about their money. Trying to direct “the unseen hand” of the economy always fails. It’s a fool’s game.

It’s true that there are capitalists who take actions that destroy value. I agree that government in its “traffic cop” role should put in prudent regulations that limit value-destroying activity as much as possible. What I see happening is that Obama is also taking actions that destroy wealth-creating activities. Part of maintaining a healthy economy is creating a consistent playing field where capital investors can count on certain conditions, not a capricious economy whose rules change depending on which way the political winds are blowing. They can’t count on a positive return for their money (in most cases), but they can count on certain rules applying to their investments. That’s something that’s needed, and we’re not getting it.

Edit 5/16/09: George Will wrote a column talking about the same subject.

I’d like to close with a couple videos that I think show the fallacy of the political actions of the Obama Admin. Whenever I’ve seen cases of an interest group vying for government help or favoritism, this episode of The Twilight Zone (1980s) comes to mind for me, called “Button, Button”. I can see the point of this story was to show what people will do for money, greed. That’s part of my point here. Obama is replacing one party’s greed for another. The key part of the story for me is where the mysterious man (think of him as representing the government) talks about how the couple’s decision will affect people “they don’t know”, and in the end reveals the catch: The same deal will be offered to someone else, and it will be somebody who does not know them!

“Button, Button”, Part 1:

Part 2:



The DOD is tone deaf

April 27, 2009

I heard about this story today on the news. Learned a little more by reading the New York Post article (thanks to Army Wife). People in Manhattan were terrified for a brief time when the DOD decided to do a “photo op” with an Air Force One plane (a Boeing 747) just outside the city. The plane buzzed the city and circled the Statue of Liberty, all at low altitude (a la the terrorists on 9/11). The way I saw it reported made it sound like Obama was on the plane at the time. He wasn’t.

Good job guys. Way to announce that the War on Terror is over. I don’t think the people of Manhattan got the memo. Please don’t take their squeamishness at your stunt as a lack of sense of humor. What you did was in bad taste.

I found some video footage of the incident:


Insanity wins: Churchill wrongfully terminated

April 2, 2009

Ward Churchill, who was fired from his job as CU professor in 2007, sued CU for wrongful termination on First Amendment grounds. The jury found in his favor today, saying that Churchill’s speech (his infamous 9/11 essay) was one of the reasons CU fired him, and according to the law speech can play no part in the decision to fire a state employee.

This verdict stretches credulity. One could argue that the investigation of Churchill’s works began as a result of the uproar over his 9/11 essay. The timing of it certainly doesn’t look coincidental. The thing is, an investigation does not mean that Churchill’s termination was inevitable. The process took 2 years. Had Churchill shown real scholarship in his work the investigative committees would have had no reason to recommend his ouster, and the regents would have had little justification to do so. Yet the jury was convinced that while his essay was not the only reason he was fired, it was one of them, hence their verdict.

I followed the coverage of the trial a little bit, listening to Caplis & Silverman occasionally. Silverman noted during the trial that all of the jurors were under the age of 30. That concerned me, and my worst fears were vindicated. I listened to Caplis & Silverman today, and supposedly (it could not be confirmed at the time) one of the jurors called in. Dan Caplis had been gloating during the show today that while the jury voted in favor of Churchill, they only awarded him $1 in damages. He took this to mean that while CU lost, they had seen through Churchill’s charade and saw him for what he was: an academic fraud. The supposed juror who called in said this had nothing to do with the decision on damages. She said the jurors couldn’t make up their minds what to award him. Most of the jurors wanted to give him some amount, but one did not, and was apparently adamant about it. She said they spent several hours just on this subject. It sounded like they ultimately broke down and decided to award Churchill nothing just to get the matter overwith. The supposed juror said she couldn’t see why the legal system was asking them to make this decision anyway. They asked the judge if $0 was okay. The judge instructed that $1 was the minimum if they decided in favor of Churchill, and so that’s what they awarded. It was a cop out.

The supposed juror sounded confused and in over her head. When Caplis and Silverman asked her questions it was difficult for her to give a coherent answer. She said that the jury felt that their only job was to determine if Churchill had been fired because of his essay, and they didn’t consider other factors. It sounded like they found the credibility of CU’s witnesses suspect. She said she believed Churchill when he gave his testimony, and while she didn’t agree with all of his controversial 9/11 essay, she thought “he made some good points.” Unbelievable. She said the jurors reviewed the investigative committee report on Churchill’s plagiarism and academically unethical practices. She said she agreed with a couple things in the report, but she thought they nit-picked the rest, and she didn’t think that the violations cited in the report that she agreed with warranted his firing.

Apparently some of the fault for this falls on CU. I feel like they dropped the ball, like their attention has been diverted to other matters, and they didn’t consider this trial a priority. It looks like they didn’t do their due diligence in selecting a competent jury. I didn’t get a sense that the supposed juror who called in was competent to deal with the subject matter of the trial. She was only receptive to simple arguments, and lacked critical thinking skills.

This clip kind of reflects what a joke I think this trial was:

The Chewbacca Defense

Anyway, a separate hearing will be held to determine whether Churchill will be reinstated at CU, or the judge may just decide not to reinstate, but rather give him a lump sum. If Churchill is reinstated it’s going to be egg on CU’s face. In that case, how could CU be taken seriously again?

Not that anyone from CU administration is listening, but my one word of advice to them is the next time they receive complaints about the academic performance of their faculty, they should act to investigate it promptly rather than sit on it, which has been their modus operandi until this blew up in their face four years ago. Evidence of problems with Churchill’s scholarship had been mounting for years. The record that Caplis & Silverman were able to uncover through public document requests showed that Phil DiStephano yucked it up every time a complaint about Churchill came to his attention. He was apparently happy that Churchill was drawing the spotlight, perhaps bringing attention to CU in a sick sort of way. DiStephano had been helping Churchill advance his career at CU, until the controversy erupted. I shouldn’t single him out. The CU Administration has shown itself to be kind of like the Keystone Kops (again, no offense to the town of Keystone), stumbling into this investigation when they felt overwhelming public pressure. Maybe this will teach them a lesson? Are they learning the right lesson? Maybe not. A sad state of affairs indeed.


The Alex Midyette trial

February 11, 2009

Perhaps you have forgotten about this. It’s an old story by now. Jason Midyette, a 9-week-old infant died in the hospital in 2006 from massive head trauma. The Boulder DA’s office dragged its feet for more than a year before bringing charges. Molly Midyette, the mother, was tried and convicted in late 2007 of allowing child abuse resulting in death. Alex Midyette’s trial was delayed. The venue was changed. It just recently got under way. He is charged with inflicting the abuse that caused the infant’s death. It’s looking like a short affair. From the headlines I’ve been reading lately it sounds like it’s almost over.

The Daily Camera has been keeping a legal blog of the Alex Midyette trial. From what I heard at the time, the Camera’s blog coverage of Molly’s trial was excellent.