Too Small to Save

I've written about what's happening in my hometown in previous posts here and here. Long story short, after losing 9K jobs in a town that has 14K people, my town has become the milk-carton metaphor for the greatest economic downtown in generations.

Spirit lifting rhetoric has been plentiful, substantive action has not. A while back, governor Ted Strickland drummed up some blatantly ridiculous anti-trust talk. Then, Senator Sherrod Brown boldly "took up the DHL job fight" -- asking the company to "re-think" their proposal to pull out operations. This effort was met with exactly the amount of success you'd have guessed. Of course, the officials rode into town for all the nationally televised press conferences and scored the press hit. I'm not saying they don't care. I'm sure they do.

But, at the end of the day they sit around with their senior staffs and access the situation in a politically candid manner. And the situation is this: Boy, that sucks for them...but, really there's nothing we can do. We can't make DHL keep a business unit that's hemorrhaging money. The majority of laid off workers aren't unionized, and so don't have a national lobby, (due to a long and storied history of anti-unionization tactics), they're not in a swing voting district, and if you're a Democrat, you know you're not getting those votes no matter what happens. If you're a Republican, you are, and you're probably not predisposed toward any kind of government intervention to begin with. It's really important that Strickland/Brown Inc. do something though. Maybe try to secure a couple of million in aid, and work on an earmark or two. Get somebody to start beating the aforementioned anti-trust drum, which is a pipe dream at best, but will get them in all the papers and provide them with the appearance of being proactive.

Sherrod Brown even "devoted" a full-time staffer to the issue, though a review of his web site would suggest that perhaps that's no longer the case. I don't know what this person was supposed to do (working in a Senate office, and being familiar with the office structure, I'd wonder what kind of a staffer they were, and to what extent they were concentrating strictly on this issue). Full disclosure: when I was looking for an internship I wrote an email to Brown's office offering to assist this person in any capacity I could, whether or not the position was paid...an offer that still stands. As is often the case on the Hill, I never heard back. That's the tragedy of the Hill really. Getting a chance to do anything worthwhile is so difficult. There isn't a person in the world that would work harder and be a more effective advocate for Wilmington than I would. I really believe that. But, when no one in your family is a BFD (a Hill abbreviation for "Big F&*#ing Deal"), and you didn't go to Georgetown, getting that chance can be depressingly difficult. Staffs often consist of 25 people with 25 separate agendas, with political and office inertia sometimes precluding aggressive constituent advocacy instead of enabling it. Like a golfer with a lead going into the back nine, the beating pulse of politics far, far too often consists of a two word mantra: avoid mistakes -- not really a recipe for substantive change and bold action.

500 words into this post, and it's turned into a cartoon fire hose; just flinging me around as I futilely try to direct the flow. I'll try to meander into something resembling a point.

I went home for Thanksgiving. It was right after the job cuts were formally announced (they'd been all but certain for months). It would all be over on January 31. During the holiday weekend I spoke to quite a few DHL employees. Some at the bar over drinks, one or two at an annual day-after-Thanksgiving touch football game, one was a friend's parent. There wasn't a lot of complaining, just a bitter acknowledgment of an even more bitter reality. No severance packages to fall back on. Not much talk of where they'd find work when things closed up.

My girlfriend, in Wilmington for the first time, kept asking, "so what will they do", or "what happens after they (DHL) close"? What, indeed.

The Saturday after Thanksgiving, we both went to see my mother play in a multi-denominational bell choir, at the Quaker church -- my family's church. 60 Minutes had a camera crew at the church for a feature they were doing on Wilmington. They said they were there to cover the "day's biggest community event" which they thought, "captured the essence of the town". I guess. Though, as my girlfriend and I left the church we saw that part of an adjacent street had been blocked off for what must have been a better attended event (only a couple of dozen people, many of them family members, sat in the mostly empty pews of the Quaker church).

You can kind of see the story, right? Soon-to-be-economically-devastated small town, where the "town-folk" sparsely fill the pews on a Saturday, listening to a local bell choir, politely and quietly clapping after each song. Get some footage of the grim-but-determined laid off workers. Find another worker or family member that's so upset about their future prospects that they cry. The former being men, and the latter a woman. Not on purpose of course, that's just the footage they got. After all, small towns reinforce gender roles, they don't defy them. Nobody will be talking about bringing in new green-collar technology jobs. Nobody mentions approaching the federal government for bailout money. Hell, with any luck the weather will be overcast while the camera crew's in town. The last shot of the segment could be a series of late-model sedans and pick-ups pulling out of the DHL lot in the morning after third shift ends. No music or narration, just the sound of car engines and the thick exhaust, rolling out of tailpipes on a cold morning. All very rural and blue collar. Again, not on purpose, it just worked out that way. Can you see the story now? Two full segments I bet. Don't miss next week's exclusive interview with Katie Holmes.

After briefly speaking with the 60 Minutes crew and watching them interact with community members at the church, I couldn't get those pictures out of my mind. I felt pissed off, a feeling that hasn't abated in the intervening week.

I'm the consummate realist. I get it. I get why we don't get bailed out and Wall Street does. I get why we don't get bailed out but Detroit does. I get why 60 Minutes wants to do a feature on Wilmington. I get why we'll have 25% unemployment and become the face of the most difficult economic environment in generations. I get that it has to be somebody.

But, for the last week I just haven't been able to shake just how goddamn unfair it all is.

The citizens of Wilmington didn't make knowingly high risk gambles with other people's money, become obscenely rich in the bargain, and then demand trillions of dollars because they were "too big to fail". They didn't fight tooth and nail against regulations that might have made their products economically feasible or disingenuously and systematically deny mounds of scientific evidence because it was economically lucrative. They didn't send politicians whose job it is to advocate for them to demand 10's of billions of dollars to ensure the continued production of products that no one wants.

They just went to work everyday, with marginal benefits and almost no job protection. They busted their asses, sorting freight, loading planes, and working third shift for 20 years, and watched as that company was sold to a bigger German company. They watched as company executives made fortunes due to the acquisition, and were told that this move would ensure the company's long term survival and prosperity.

Now they've lost everything, they're informed that they get to bail out bankers who are still, unbelievably, unconscionably, receiving their year end bonuses and going on elaborate corporate junkets. They get to bail out Detroit executives that don't believe in global warming. They get to spend $1 trillion on Obama's stimulus program and the 2.5 million jobs he'd like to create (crossing their fingers and hoping that a couple of them make their way back to Clinton County). Flint bails out Malibu. The Spartans bail out the Persians. The hen bails out the fox.

Chuck Todd said the other day, "...And maybe it's because we also don't know anybody that works at GM...We don't know those families. But, we do know somebody at JPMorgan Chase." He's said that, or variations of that, on several occasions as the fools on MSNBC tried to figure out why GM's panhandling effort was less successful than Wall Street's.

The unfortunate truth is that Wilmington isn't even Detroit. Not by a long shot. If Chuck Todd and the gang don't know anybody that works for GM, Wilmington doesn't have a prayer. No bailout money for us. We wouldn't have even known who to shake our cup at. The verdict: Too small to save.

I'm a realist. If I pull back and take a deep breath I might understand why it has to be this way. But, cold rationalization is no substitute for rent or a heating bill. It's no substitute for help either, and even though I want to more than anything, I have no idea how.

Public Works

President-Elect Obama has announced that at least the opening phase of his economic recovery plan will entail a massive public works program, including renovations to government buildings, rebuilding schools, rebuilding road and bridge infrastructure, upgrading broadband internet connections, and digitizing the transmission of medical records. Overall, he hopes to create 2.2 million jobs. See the story at Politico.

This is presumably the first of many announcements on this subject from Obama, as he attempts to integrate his campaign priorities with job creation, this first one feels distinctly like a 21st century reference to the programs FDR tried to fight the great depression with. Taken with the existing bailout package, and the possibility of additional packages to come, Obama is certainly working to energetically address the financial crisis. While these are certainly worthy goals for job creation programs, Obama has the opportunity to take his powerful new cabinet and address far more controversial issues in his first hundred days. With the speed and resolution Obama has demonstrated in recent weeks, it feels like the honeymoon period should be reduced from one hundred to ten days, or extended to his whole first term.

I will insert this one reservation about the announcements today, at the risk of seeming a Luddite: I do not like these programs to digitize medical records and transmit them over the internet. Firstly, at this point there is no standard format for digitized records, meaning that doctors and hospitals can send materials to one another, but not necessarily read them when they get there. Secondly, I am just bracing myself for the leaks. No network can be made entirely secure- a national network with thousands of access points and tens of thousands of users is a security nightmare. Medical records might not have the same sort of profit motive as banking info, but unlike your credit information, they really can't be repaired once leaked. Hospitals stand to save tremendous sums using digital storage, but we are asking for trouble if they start networking that information. It is quite possible that Obama will attempt to address these problems. It is probably likely that I am attempting to turn back the tide on this one.

Epic Fail

I don't know if any of you are football fans, but even if you are not, I feel attention should be paid to a team on the edge of infamy this year.

The Detroit Lions are well on their way toward becoming the first team to lose every single regular season game this year. There are some stories on the current state of the team, here describing how the quarterback is desperate for a single win, here about how local fans have failed to sell out 4 of the last 5 games in a relatively new stadium specifically built to enable sellouts after the absurdity of asking the Lions to regularly fill the Pontiac Silverdome's 83,000 seats.

It has been a bad year for the Lions- at 0-12, they've already fired their quarterback and replaced him, in mid-season, with 31-year old glass-boned Dante Culpepper, who started for the team like 72 hours after being hired and, judging by the size of the play cards on both his wrists, unsurprisingly still doesn't know the offense. He remains, nevertheless, a high point for the team this year. Revel here in the numerical explicitness of the Lion's failure, lingering over their bottom of the league placings in on both offense and defense, and the still shocking .000 win percentage.

The thing is, the Lions aren't just having a bad year- they have actually become an institution for the generation of mediocrity, ruining the careers of the highly talented draft picks their poor showings entitle them to each year. Think about it- who was the last great Lion since Barry Sanders, for whom Detroit can't take developmental credit anyway? He showed up the best running back in the league, and retired the best running back in the league, a year away from the rushing record, his years with the Lions having destroyed his enjoyment of the game. Yes, they've produced a couple of decent receivers over the years, but have not been able to translate them into wins. Or even playoff appearances.

So, Ahab like, I'll be watching the game this Sunday with a friend from Minnesota, who apparently wants someone to laugh at over his buffalo wings. The sports-talk radio station in Detroit, 97.1, hosted a conversation last week focused on who might buy the team for next year, what city they might move it to, and whom they should fire in what order. I'm right there with you, Detroit- this organization has been mediocre for as long as I've been alive, and downright horrible far too many years. Detroit Lions: what is wrong with you? This isn't baseball, where century-long losing streaks are possible- the salary cap and drafting system have tended to ensure a high degree of volatility. At least this year the Lions have managed to excel at something- even if that thing is the opposite of the reason this extremely expensive organization exists.

Lions, enjoy the bitter fruit of 2008. And then please: fire people, shake things up, move to Montana, start taking better steroids, start doing voodoo rituals before games, replace yourselves with cyborgs, disband the freaking team, but don't make me watch you do this again.

A TPBP Milestone

In the comments section of today's Overheard Line of the Day post was a nonsensical remark posted by one "Thankful Paul". Now, the comment being totally unrelated to the post made it in no way impossible that some irreverent friend of TPBP was using the comments section as a graffiti artist uses an alley. But, further investigation revealed that Thankful Paul just started this blog last month.

You really owe it to yourself to check this thing out, and if you do you'll note rather quickly that "Paul" is a two bit scam artist! The first we've had here at TPBP! He's got the hilariously false story along with the donation link so that he can "commit random and not so random acts of love in the name of Jesus".

I can't speak for PW and Aaron, but in my estimation it's a proud moment for the entire TPBP community. Thanks Paul, and good luck!

Update: Don't miss the comments section (of Paul's blog that is). He erased the negative comments right? I can't possibly be the only one that called shenanigans.

Extinct Blog of the Day

Today's foreclosed blog belongs to Bill McCready, whose futures blog we were assured would be filled with:

...articles, trading tips and charts which show how to day trade futures, including futures trading strategies, systems and resources, as well as money management and trading psychology for successful traders.

Alas, Bill's blog, though not quite extinct, seems to only ring in at about one post every other month. Though lacking in posts, Bill's a big fan of labels, which he uses liberally. It's worth checking out, if only to see Bill's kick ass head shot in the upper left-hand part of the page.

Update: I googled Bill's name, and it seems as though he wrote at least one of those silly 10 step "guide-to-making (X) wildly-successful" books, X in this case being running a small business. It's difficult to figure out whether he's semi-legit or a snake oil salesman. Either way, I'd wager his blog receives significantly more traffic than mine.

Hats off to you Bill, our Extinct Blog of the Day.

Overheard Line of the Day

On Capitol Hill at around 10:30AM:
Random Woman: What do you want?
Random Guy: A V8 if they have that.
Random Woman: What if they don't?
Random Guy: A Red Bull...Actually just get me a Red Bull.
Feel the magic.

PW's Pirate Redux

Well, if we’re going to seriously engage in this pirate business, then 1) I have some thoughts, and 2) it’s time to administer a good old-fashioned TPBP smackdown to PW, who while possessing a generally superior intellect, is off the mark on this one.

He starts out on the right track by attempting to point out the economic contexts of the situation. I remember reading recently (I can’t find the source, so take it with the requisite grain of salt) that piracy generated Somalia’s largest influx of hard currency, ringing in at over $100 million in the last year (a shockingly small amount for the largest sector of a 7 million person economy).

But then we get to this:

Certainly, there is something to the observation that much of Africa should be better integrated into the global economy on terms that actually generate wealth for more people who live there. But that doesn't really fly in Somalia.

I think that it would fly. It would take a large investment, but not impossibly large. Move in 10K troops for peacekeeping purposes, and dump $1 billion a month for infrastructure spending. I should point out that I have no idea what I’m talking about in terms of aid expenditure, distribution, etc. -- which is an admittedly poor start, but I have a hard time believing that some small fraction of our Iraqi expenditure, used even semi-productively, wouldn't make a real difference in economic terms.

Minus some kind of real government/economic security improvement you can count on these attacks continuing, if not escalating. But, when PW posits --

What kind of weapon systems could you fit to a tanker for half the cost of the 20mil USD you'd have to pay for a ransom?

--he's sidestepping a problem of scale.

Arming any one ship would be quite expensive, arming an entire fleet even more so, and arming all cumulative fleets that travel in Somali territorial waters would be impossibly expensive. There’s a reason this option hasn’t really been discussed, and all of these companies are instead clamoring for government military escorts. It’s deceptively intuitive to see a scenario that morphs into an acquadic version of the last half hour of Fast and the Furious (a la truckers with shotguns), but it’s not going to happen. PW is making an economic argument: raise the cost of piracy to the point that the pirates will no longer wish to engage in it. Though it’s not inconceivable that the costs of piracy become high enough to prevent it, that evolution is somewhat at odds with Somalia’s overall economic and political reality.

I’m not advocating the following tactic so much as opening the floor for discussion, but perhaps these pirate groups (or at least the most powerful among them) should be engaged in negotiations to open Somalia’s costal shipping lanes. This would neutralize the threat, prevent PW’s (ultimately inefficient and expensive) armed conflict and allow us to open up lines of communication with a group (the pirates) with whom we probably have more in common than the Islamic Courts Union folks that are ostensibly in charge of the country.

This piracy business is a pain in everyone’s ass, but more importantly it’s an increasingly costly pain in everyone’s ass. The only way PW’s solution works for any meaningful length of time is the permanent and significant arming of all commercial shipping operations (lest they get lax and the piracy resumes). If you could just pay the pirates some percentage less than the total cost of said arming (hopefully a tiny fraction of the total cost) everyone would be better off. It’s probably not the solution, but worth thinking about at any rate.

Enough With The Yarrrr!

So here is yet another post on pirates.

These were novel when we started making them some months ago, because pirates, really, shouldn't exist in the 21st century, save in MMORPG's and Disney movies.

As the novelty has faded with each new instance of piracy off the African coast, so has the amusement. Huffpo reports that they went after a cruise ship yesterday, a disturbing escalation. It's one thing to hold tanks or oil for ransom, another entirely to hold people who have to be fed and cared for.

Following the seizure of the Saudi oil tanker last week, news coverage has rather exploded, and has shifted to focus on the people doing the pirating. This Reuters article talks about the new beachfront hotels going up in Somalia to cater to pirate-patrons. Much of this coverage has turned to the idea that the ultimate cause of the piracy is a lack of economic development in Africa.

Certainly, there is something to the observation that much of Africa should be better integrated into the global economy on terms that actually generate wealth for more people who live there. But that doesn't really fly in Somalia. Somalia remains effectively lawless - if you still had money to invest, how much of it would you invest in Somali port development, roads, factories? There are places where international aid could be the answer, but Somalia, right now, isn't one of them.

Which sorta reduces the possible solutions, and I guess I don't really understand all the hand-wringing. I hate to be so crude, but the solution to this problem is probably about 600 years old- you put guns on your ship, and when pirates try to board it, you sink them. What kind of weapon systems could you fit to a tanker for half the cost of the 20mil USD you'd have to pay for a ransom? The whole business model of seizing incredibly valuable, defenseless assets evaporates once the assets are no longer defenseless. Certainly, there is no way to sink a tanker with small arms. Yes, there might be some escalation from the pirates, but as the Indian Navy recently demonstrated, once you force the pirates into bigger ships, the professionals can deal with them in the time-honored fashion. Open sea lanes have been the foundation of the world's economic order since the British put themselves in charge of patrolling them, and people who threaten the great global commons should be playing for the highest of stakes.

Eh

I don’t follow Canadian politics much, but it seems like I ought to start. Canada’s two more left wing parties and Quebecois separatists are planning on putting together a coalition government, despite the fact that it hasn’t been done before. It just emphasizes how much more flexible (or unstable, depending on your point of view) a parliamentary system is than our system. I think both have positives and negatives, although after eight years of George W. Bush, the negatives are certainly uppermost in my mind.

Thought of the Day

If you are over the age of 15 and say "like" in five or more consecutive sentences while recounting a conversation, odds are that you are a fool.

Sullivan Links to a Stupid Equivalency

Sullivan, via someones book review, includes the following excerpt:

If you're like me, you grew up worrying about people starving in other countries. Your mom would tell you things like, "Eat your food. There are kids going hungry tonight." But hunger, as a global threat, is now dwarfed by overweight. According to Popkin, the population of obese and overweight people worldwide—1.6 billion—is now twice as large as the population of malnourished people.

Well that might be true in a literal sense, but it's ridiculous in a practical one. Comparing obese populations to malnourished ones overlooks the fact that malnourishment is comparatively much more problematic and detrimental. I'm not a nutritionist, but I'd wager that indicators such as life expectancy would be much shorter in malnourished verses obese populations. Not to mention that obesity often (though I realize not exclusively) stems from lifestyle choices. I don't think malnourished folks in rural Appalachia or Sub-Sahara Africa are sitting around, watching TV, deciding to forgo sustenance.

Clinton at State, Gates to Stay Put

I haven’t really had a whole lot to say about politics in the last couple of weeks. I’ve never heard of the vast majority of the people the Obama administration will be made up of. It seemed kind of silly to pretend like I had much of an opinion on exactly what’s going into the new government. I voted for Obama, he got elected: it only seems fair that he should get a chance to actually start governing before I begin complaining too much.

Of course, the big news of the last couple weeks is the slow motion dance that Obama and Hillary Clinton have been engaged in. I’m glad that particular story has finally come to its conclusion. I don’t have any real strong feelings about this, either, although it puzzles me on Clinton’s part: giving up a Senate seat she could have held for life to take up a cabinet post that will last only a presidential term, if that, seems like an odd decision. But I don’t make her choices for her. While Clinton and Obama had their disagreements about foreign policy during the campaign, there really wasn’t a whole lot of difference between the two – and I doubt that Clinton is going to be running her own show. Obama is still going to call the shots. Still: eh. I can’t really summon much enthusiasm for the pick, one way or the other.

Keeping on Gates, though, is I think a thornier issue. I’ve heard the argument that the military is comfortable with Gates, that it’s a tiny bit of compromise towards Republicans and might allow some of the more realistically-minded Republicans to reach across the aisle and work with Obama instead of just obstructing until they get another chance to reduce the Democratic majorities in the Congress.

Fair enough, I suppose, and I won’t say the argument doesn’t have a certain internal logic to it. What bothers me is the idea this reinforces, that the military is more comfortable with Republican figures than Democrats. That meme, whether it’s real or exists purely in the media imagination, is a dangerous one. Obama, and progressives more broadly, need to make sure that we move the country away from that idea. If Gates can act as a transitional figure to a progressive voice that’s acceptable with the military establishment, that’s great. We need to see an end to the idea of conservatives as the big, tough warriors who will keep us pony-tailed, Volvo-driving, NPR-listening liberals safe while we go on and on about domestic issues.

Meanwhile, speaking of NPR, where’s my canvas tote? I need to get down to the farmer’s market to grab some arugula.