Presidential Election Anything but Laughable
• September 20, 2012

In the early 1970s, the late comedian Pat Paulsen wrote a book called “How to Wage a Successful Campaign for the Presidency.” In it, he prepared speeches, advertisements, debate responses, and answers to media questions for any candidate.

If Paulsen were alive today, he might have written a mock acceptance speech from a Presidential candidate that looked something like this…

Thank you. Thank you so much. Thank you, delegates.

I am so proud to accept your nomination for the [Republican / Democratic] candidate for President.
Isn’t my wife great? Aren’t my kids beautiful and great?

Our nation’s economy is [in trouble / improving].

In September 2008, when our financial system was on the edge of collapse, the government did the [right / wrong] thing by letting a few large investment banks fail and then stepping in to save the others.

Many economists [agree / disagree] this led our nation, as well as the world economy, into its greatest economic crisis since the Great Depression.

A few weeks later, the nation’s largest commercial banks, where you have your checking and savings accounts, were on the brink of collapse. The government had to decide whether to let them [live / die] [with / without] government assistance.

A Republican President and Democratic Congress worked together on a $700 billion bailout. I believe they did the [right / wrong] thing.

A few months later, another President and Congress agreed on another $800 billion bailout for the auto industry and the rest of the economy. This time, I believe they did the [right / wrong] thing.
Since then, the situation [has / has not] improved [because / even though] the private sector has created 4.5 million new jobs. That is [as good as possible / not enough] given the circumstances. Government is smaller and has trimmed more than 600,000 jobs. That is [good / bad] because there were [too many / not enough] teachers, police, fire fighters, and other public servants.

Now, we [are / are not] through the worst of this crisis, and must move the country forward.
I have a five point plan to put the country back on track.

First, we must make our country energy independent. Our nation is blessed with vast quantities of natural resources that can allow us to be energy independent by 2020 and fuel our country for a century or more. We need to develop domestic sources of [fossil fuels / natural gas, nuclear power, wind, and solar energy]. We [must ease / are easing] the regulatory burden on our energy companies. New sources of energy can provide the new high paying jobs and become our largest export.

Second, we must improve our educational system and give everyone a better chance to succeed. I am so fortunate to have gone to Harvard [with / without] government assistance. Only an educational system designed at the [federal / state / local / parental] level can compete with Germany and Japan. Steve Jobs told me that Apple needs 30,000 new engineers who can be trained in America. My iPod has music from [fill in this blank to appeal to your voters].

Third, we [must negotiate / are negotiating] free and fair trade agreements so American workers and businesses play on a level playing field. We must stand up to China, and protect our intellectual property and the dollar.

Fourth, we must reduce the deficit by [raising / lowering] taxes. Spending is [out of / hard to] control because of [this / the previous] President.

Finally, we must [start / continue] to help small businesses, they are the source of new jobs of the future. Over the past four years, government has [hurt / helped] small businesses more than ever before.

If you vote for me, we will do this together. We can change the direction of our nation.
Thank you. Thank you so much.

God Bless the United States of America.

Pat Paulsen called this comedy. Today we call it “talking points.” This year’s candidates could have taught Paulson a thing or two about debating. When several of them got questions they didn’t like, they ignored it and said, “You ask the questions you want; I give the answers I want.”
If only Mitt Romney and President Obama could make us laugh.

Linda Greenan’s Lasting Legacy
•

Much has been said about Linda Greenan’s legacy [The Georgetowner, Sept. 5, editorial] as she retires from her long tenure as vice president for community relations at Georgetown University. For nearly two decades, Linda played an integral role in securing District government approval for university development projects such as the Canal Road entrance and the Southwest Quadrangle. She was the face of the university in negotiations with the community on the Campus Plan and on student conduct issues.

But Linda’s most lasting legacy may be as a leader in securing voting rights for college and university students in the District of Columbia. Sixteen years ago, a group of GU students sought to take a more active role in local government by voting in local elections and serving on Advisory Neighborhood Commissions. They launched a student voter registration drive and nominated G.U. students to run for seats on ANC2E. But a handful of Georgetown residents vigorously opposed them. They challenged the right of students to register in the District, and they challenged the credentials of students attempting to vote, creating long lines at the polls on Election Day.

Linda passionately believed that everyone should have the right to vote and to run for local office. She encouraged the students to stand up for their rights and guided them to victory at a day-long hearing before the Board of Elections.

As a result of Linda’s leadership, university students now can vote in the District and can serve on ANCs, and they routinely do so. College and university students in the District have Linda Greenan to thank for this. A fine and lasting legacy, indeed.

Grace Bateman,
Georgetown

Salute our veterans
• September 13, 2012

From the Halls of Montezuma,
To the shores of Tripoli;
We fight our country’s battles
In the air, on land, and sea.
-United States Marine Corps Hymn

When President Woodrow Wilson first declared in 1919 that Nov. 11 would henceforth be recognized as “Armistice Day” — renamed “Veterans’ Day” in 1954 — who could have imagined the historic role the armed forces of this emerging, young nation would come to play in the 20th century and beyond? Who could have imagined that the Stars and Stripes of the United States of America — and the soldiers who proudly hoist it high — would become known worldwide as a symbol of liberty over tyranny?

Although select members of political establishment shy away from proclaiming “American Exceptionalism,” this nation in its short yet glorious history declare otherwise. And no other sector of this nation embodies that exceptionalism more than the United States Armed Forces.

Whenever tyranny arises — whether its Nazi fascism in Germany, communist totalitarianism in Russia and Asia, or radical Islamic extremism in Afghanistan, Iraq, New York City, or Fort Hood, Texas — American soldiers faithfully rise against it. In a world of increasing uncertainties, the American serviceman has remained steadfast and true.

As people of America look back at all of the places where the cry of freedom has beckoned its soldiers to battle — “from the Halls of Montezuma, to the shores of Tripoli,” from the blood-soaked beaches of Normandy to the rugged mountains of Afghanistan — our only response can be gratitude and awe.

So on Veterans’ Day last week, and every day of the year, it was, and is, altogether fitting that Americans pause in reverence to thank veterans young and old for the willingness to “pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty.”

The Hunger Games of Romney-Ryan Plan
• September 6, 2012

Republican presidential nominee Mitt Romney said he’s been reading “The Hunger Games” to relax. Me, too. Romney is reading the novel by Suzanne Collins. I’m reading the budget by Paul Ryan. They are remarkably similar.

Novels, of course, are fiction and don’t really happen. Budgets also distort reality and don’t really happen.

“The Hunger Games” is a novel about a country where the government has created a food shortage to keep the people in line. Each year, two dozen children are placed in an arena on a reality TV show where their objective is to fight for food, kill the others and be the lone survivor.

The Republican Romney Ryan plan – or TripleR, which sounds rather Reagan-esque, doesn’t it? – is also a reality show about whether the United States should continue to provide a social safety net for the elderly and the poor. To those affected, it is about survival.

TripleR is a quick read, at fewer than 90 pages long. It is mostly about what’s wrong with our national financial mess and is peppered with some really bold proposals that radically change the national approach to providing a safety net for those in need. Like most novels, TripleR ends in the future—30 years from now—when the budget is finally balanced, the nation is prosperous and everyone lives happily ever after. Of course, by then, most baby boomers will have met their maker, and the elderly population will be in decline.

Like Herman Cain’s 9-9-9 idea that simple is good and solutions are easy, TripleR proposes four simple steps: cut taxes, convert Social Security to a private savings plan, give seniors a voucher to buy their own health insurance and give states block grants for Medicaid to serve the poor and disabled.

TripleR avoided the rigor of being “scored” by the non-partisan Congressional Budget Office that estimates the economic impact of new laws and budgets. Instead, TripleR created its own assumptions and reached its own conclusions. (I could do that. After all, I am a CPA. Accountant jokes are rare, but one fits in this case. A client has a question for his accountant who answers, “Tell me what you want and I’ll make it come out.”)

So, here’s the plan. Decide whether it’s fact or fiction.

First, cut taxes to the lowest rate in 80 years. Revenues will increase because everyone will work harder and invest more, knowing they can keep more of their income.

Second, convert social security to a personal savings plan. So, suppose the average family and employer invests the same 12.4 percent now paid into Social Security, or about $6,000 per year. For today’s twenty-somethings, that would add up to $600,000 over 40 years and provide a $3,500 monthly pension. Sounds good, but what about inflation? In 40 years, that $3,500 per month will be like $750 today. Put another way, and ignoring inflation, if you save 12 percent of your income every month, say $500 for 40 years, can you then live on, say, $1,000 per month (24 percent of today’s income) for the following 20 years?

Third, give seniors a voucher of $700 per month to buy their own insurance. I am 63, and if in perfect health, could buy insurance for about $700 per month after paying the first $3,500 each year. Like many my age, I’ve had some health issues. So, my insurance is already double that. My 78-year-old father-in-law had a heart attack 15 years ago and now has a pace maker which cost $30,000. Ann Romney, Mitt’s wife, has had cancer and has multiple sclerosis. What insurance company is going to sell any of us a policy for $700 per month? Buying my own insurance is also supposed to make me a better health care shopper since I won’t buy it unless I really need it. That would make me my own death panel.

Fourth, give states a “block” grant to cover Medicaid for the poor and disabled. That would save the federal government billions by shifting the entire risk of increasing health care costs and increased poverty rates to the states. Health care costs have risen three times faster than inflation for more than 20 years, and the number of poor people qualifying for Medicaid has increased dramatically. States are broke. How will they bear that burden? Maybe the poor will move to states with better benefits.

That’s TripleR. Individual responsibility, reduced retirement benefits and less health care for the elderly and poor.

Now, that really does sound like “The Hunger Games,” doesn’t it?

Lou Roffman: Our Own American Hero
• August 22, 2012

We all knew Lou Roffman at the Georgetowner. He had special standing here because he was our former publisher Dave Roffman’s uncle, hence the nickname Uncle Lou. He was Uncle Lou, also, to still more who had occasion to hear stories about him from Dave or to meet him on his occasional visits from out West. He was Uncle Lou at the Midway and World War II Memorials, and he was Uncle Lou at the Nats game a couple of years ago.

Even if he had another name, but the same life and history, there’s more than enough to celebrate the life and mourn the passing of Lou Roffman Aug. 10 at age 94. A World War II veteran in the Army Air Corps, he made history, being one of the rare American soldiers to serve at both Pearl Harbor and Midway, the first a military tragedy for the United States, the second a battle that turned the tide against the Japanese in the Pacific.

That wasn’t the whole story. Roffman was a flight engineer with B-17 bombers of the 31st Bomb Squadron at Hickam Field on Dec. 7 when the Japanese attacked. Later, he fought at the Battle of Midway. Later still, he was wounded in a bombing mission. He received a Purple Heart and the Distinguished Flying Cross for his actions in mission in which he landed a plane after the pilot had been killed.

Reading Uncle Lou’s obituary, you can sense the full life well and long-lived, something of a true and wonderful life which might have made an inspiring movie. He served in the military until 1968, retiring from the Air Force with the rank of senior master sergeant.

During retirement, he and his wife Irene began a whole new life in Riverside, Calif., where he owned a pool hall and three bars, was a member of the Veterans of Foreign Wars, the Elks Club and Hollywood’s Magic Castle and perhaps more fittingly the Optimist Club, of which he should have been president.

In California, he practiced magic, a passion of his. He would perform for children in children’s hospitals, regale then with stories and magic tricks and remind them of the stories of the greatest generation of which he was an honored member.

Around here, we remember Uncle Lou, slowed a little by age in his latter years, a smiler and laugher and story teller. We remember him at the Midway commemoration, where former sailor Tony Curtis, the movie star at 80, wearing cowboy boots and hat, kissed a female autograph seeker. Lou came up behind him and Curtis asked him “Do you want a kiss, too?” Lou said, emphatically, “Hell, no! Just the autograph.” But we do remember Uncle Lou accepting kisses from the girls at the restaurant after the dedication of the World War II Memorial. We remember when his nephews Dave, Randy and Phil gathered here to fete Uncle Lou at the new Nationals Park, where his name sparkled on the scoreboard.

We remember Uncle Lou, an old soldier and airman whose memory will not fade away.
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Egypt’s President Morsi, Firmly Behind the Wheel
•

In his excellent Middle East travelogue, “Baghdad Without a Map and Other Misadventures in Arabia,” Tony Horwitz writes:

“In Egypt, aggression and impatience are frowned upon. The unofficial Egyptian anthem, ‘Bokra, Insha’allah, Malesh’ (‘Tomorrow, God Willing, Never Mind’), isn’t just an excuse for laziness. In a society requiring millennial patience, it is also a social code dictating that no one make too much of a fuss about things.”

This sentiment seemed alive and well in Cairo as Mohammed Morsi was sworn in as Egypt’s president last month. Not even the first choice of the Islamist Group, the Muslim Brotherhood, Morsi was widely viewed as an accidental president of sorts, and therefore destined to be a figurehead president. It was widely believed that real power would continue to reside, as it always had, in the Supreme Council of the Armed Forces—or SCAF.

But early last week, Morsi took everyone by surprise—including the United States. In a lightning-fast series of maneuvers and brokered deals that would make Machiavelli proud, Morsi removed his political and military rivals, and nullified a constitutional decree that gave the military council ultimate authority over Egypt’s administration, security and, significantly, the government’s purse strings.

Simultaneously, Morsi issued a constitutional edict granting himself full authority over the executive and legislative branches of government. Knowing a bridge too far when he saw one, he left the judiciary alone. To preempt any potential dissent from the judiciary, Morsi appointed reformist senior judge Mahmoud Mekki as his vice president.

The ostensible catalyst for the shakeup was the killing of 16 Egyptian soldiers in northern Sinai earlier in the week, but it seems obvious that this was only a convenient excuse for actions already planned. Morsi quickly exploited the incident, and replaced his defense minister, the army chief of staff and each of the service chiefs.

It is the moral equivalent of a U.S. president firing his Secretary of Defense and all of his Joint Chiefs of Staff in one fell swoop.

Morsi’s stunning consolidation of power followed a sequence that caught the occupants of Washington’s “C” suites and cabinet secretaries completely off-guard. Reluctant to admit a lack of advance knowledge of Marsi’s power-play, State Department spokesperson Victoria Nuland said:

“We obviously did know that there were discussions ongoing about a new defense team — with regard to the precise timing, less so.”

In retrospect, the move should have been fully anticipated. The obvious historical examples of past presidents Anwar Sadat and Hosni Mubarek are clear evidence that staying power in Egyptian politics requires strength. Morsi was understandably motivated to reclaim the political power that the military had seized in the wake of the Arab Spring uprising last year.

To calm those at home and abroad, Morsi delivered a radio address, insisting,

“I never meant to antagonize anyone… We go on to new horizons, with new generations, with new blood that has long been awaited.”

Assuming an apparent wait-and-see posture, the White House has yet to offer any substantive reaction to Morsi’s dramatic power-grab, except to issue non-specific diplomatic statements about “shared interests” and the new appointees being “well known” to them.

Their silence on the real issues at hand is what’s so significant. Indeed, if the aim of the White House’s long-range goal was Egypt’s “full transition to civilian rule,” as Secretary of State Hillary Clinton has articulated it, the end result has been hardly worthy of celebration. Any vision of a secular democracy in Egypt has been relegated to virtual-mirage status.

While the administration would like to calmly portray Morsi as doing what is necessary to place Egypt back on the road to democracy, it should be worried. Morsi’s actions point to a far more ominous course now underway.

A judge in Egypt’s Higher Constitutional Court (HCC), immediately responded to Morsi’s actions, saying, “A president does not have the power to abrogate a constitution, even a temporary one….”

With his newfound authorities in place, and with the ability to rewrite the new constitution, the process of Islamizing Egypt’s domestic policy is almost sure to follow.

Despite Morsi’s personal assurance to media chiefs that press freedom would not be restricted, actions to suppress media criticism against Morsi are now fully underway. The day after Morsi’s “Sunday Coup,” police attempted to confiscate all copies of newspapers critical of the Muslim Brotherhood and suspended the broadcast license of a television station that has actively criticized Morsi in the past. Last week, Egypt’s upper house of parliament appointed new editors for the country’s 50 state-run newspapers, effectively placing the media under Brotherhood control.

Morsi now has control of all executive and legislative levers of powers, and has reinforced his authority by imposing control of the media. In such an environment, and given the stated long-term goals of the Muslim Brotherhood, the implications for Israel’s security and the future of the Camp David Accords are obvious.

To even the casual observer of Egyptian politics, Morsi is now fully in the driver’s seat as president. As such, Horowitz’s continued observations of the “Bokra, Insha’allah, Malesh” anthem seems entirely, metaphorically, relevant:

“Egyptians undergo an odd personality change behind the wheel of a car. …But put an Egyptian in the driver’s seat, and he shows all the calm and consideration of a hooded swordsman delivering Islamic justice.”

Getting nothing for $5 Billion
• August 21, 2012

$5 Billion!

Fifty-some laws. Most were meaningless.

That’s the Congressional record for 2012.

Largely dominated by the newly energized “Tea Party,” this Congress came to Washington two years ago with great expectations and promises to change Washington.

For sure, a few enormous changes have occurred since President Obama was elected four years ago. On his way out of office, President Bush sought and received $700 billion to bail out the big banks. President Obama’s $800 billion stimulus saved the auto industry and propped up state and local governments hit by the Great Recession. Obama also pushed through his signature health care law.
All that happened four years ago, before this Congress came into office.

Since then, nothing.

The Legislative Branch Appropriation now exceeds $5 billion per year, or more than $10 billion for each two-year session of Congress.

In the last two years, gridlock has only worsened and any pretense of compromise has disappeared.
In 1948, President Truman railed against a “do nothing” Congress. That Congress passed over 900 laws, relatively normal for the times. President Truman’s real complaint was not about how much Congress did. He simply opposed the laws Congress passed. He vetoed 75 of them, and Congress overrode his veto six times.

In more recent decades, Congress has passed approximately 400 new laws per session. This Congress has passed about 135 new laws, about eighty in 2011 and fifty-some this year. That’s 15% of what President Truman’s “do-nothing” Congress accomplished.

President Obama has vetoed only two laws, both three years ago. The last time a president vetoed only two laws was in 1881 by President James Garfield who was in office for only six months before being assassinated. Why so few vetoes with a President and Congress at odds with each other? Congress can’t get anything done. Congress has passed nothing for the President to sign into law or to veto.

So, what taxpayers get for $5 billion?

18 laws naming or renaming buildings.

25 non-controversial laws that did things such as approving negotiated real estate deals with states and cities, maintenance on the Kennedy Center for the Performing Arts, and increased prosecution of smugglers who build or finance tunnels into the US.

A handful of existing laws were extended for another year such as this year’s Social Security tax cut and rehiring temporary bankruptcy judges to handle the huge backlog of cases.

Five laws fall into the genuinely “new” or “big” category. Five? FIVE!!! Several were mostly about jobs — building highways and airports and reducing regulations on small businesses. Another prohibited Congressmen from trading on insider information.

That’s $5 billion.

That’s not to say that Congress hasn’t been busy. For the past few decades, approximately 8,000 to 9,000 new bills have been introduced during each two year term of Congress. This Congress introduced over 10,000, more than 1,000 more than ever before. In years past, Congress passed about 5% of laws introduced. This year, less than 1.5%.

Most of those 10,000 bills were mere grandstanding, intended to make a statement or enhance a voting record for re-election purposes. (I know. I worked in the Senate for three years and did just that.) For example, this Congress introduced dozens of bills to repeal Obama’s health care law and voted three dozen times, knowing that they would fail.

Even so, this Congress worked fewer hours. Most Congresses are in session about 2,500 hours every two years. This Congress was in session for 1,900 hours, and has declared that the year over, awaiting the election.

Many want Congress do less, to pass fewer laws. Some suggest a part-time Congress. Maybe that’s what we have, though we pay for the full freight.

This Congress kicked the can down the road as never before, but it also painted itself into a corner. Next year will be different by necessity and isn’t going to be pretty.

Expiring Bush tax cuts will force tax changes, like it or not.

The debt ceiling will be reached again and will require action, like it or not.

Automatic, but unidentified, $1.2 billion in spending cuts that Congress passed last year go into effect in January. Those changes will not happen silently or easily. And may be undone.

Next year, Congress has nowhere to hide and much to do.

Whither the Corcoran?
• August 10, 2012

For a few months now, rumors and facts about the Corcoran Gallery of Art and the College of Art and Design have been swirling through the press, among bloggers, students, local artist and Corcoran members.

The historic Flagg buildings which houses the gallery has been put on the market. Board of trustees’ chairman Harry Hopper III acknowledged as much again in a letter sent to Corcoran members on July 20 and stated that no decision to actually sell the classic, much admired property had as yet been made.

The Corcoran scheduled two town hall community meetings in August, the first of which was held last week featuring a panel that included faculty member, and noted artist Bill Dunlap, performance artists and poet Holly Bass, Philip Brookman, the Corcoran’s chief curator, and Mark Schwartz, the Corcoran’s director of development and communications, who moderated the affair.

The auditorium at the Corcoran was about 75 percent full for the meeting, and most of the people there, many of them members or students, were plainly frustrated, angry and puzzled. Because Corcoran officials, including Hopper, had indicated that there was some consideration about actually selling the Flagg building and moving the Corcoran and presumably its collection to the suburbs, either in Virginia or Maryland, many people became alarmed. “You would be committing suicide if you do such a thing,” one member said. Dunlap, whose career was helped by having exhibitions of his work at the Corcoran, said that the Corcoran was losing touch with its institutional memory and the local arts community. “Where are the exhibitions of local artists today?” he asked. “An institution that loses its connection to the community is going to lose its soul.” Dunlap suggested that a serious attempt be made to get philanthropists and businesses to donate. “People like that can keep a sale like that from happening,” he said. “I mean, this isn’t just a business. It’s a treasure. It’s part of the heart and soul of the community. You can’t start selling things off like it’s some mergers and acquisition deal.”

Brookman suggested that the Corcoran might perhaps consider re-inventing itself. “I think this must become a modern art museum, full-service, with interaction from the community and with visitors, programs that encourage people to come and get a full experience.”

“It would be a tragedy if the Corcoran were to sell this building,” Bass said.

Schwartz assured people that the Corcoran would continue to hold its scheduled exhibitions through 2014. “No decision has been made on the sale. There is no imminent closing or sale or anything like that. “
Even so, there was a sense of urgency at the meeting, a sense of something imminent. It’s true that the Corcoran has been having its share of problems. It’s been under critical attack. Its planned renovation and extension with a Frank Gehry-designed project fell through, and it is now on its third director over a short period of time.

The fate of the Corcoran’s own large collection was not mentioned, save for assurances that selling it off was not being considered.

A search firm is now working on finding a replacement for temporary director Fred Bollerer, a banker who focused on the Corcoran’s financial issues. In fact, it’s the gallery that’s losing money while the school has been financially sound and successful.

“What we’re doing here is opening a community dialogue, we want to listen to what you have to say,” Schwartz said. “No decision on the sale has been made.”

Another community meeting, focusing specifically on the college of art and design, is scheduled for Aug. 23.

Jim, Carl and Myself and Our Embrace of Civility
• August 8, 2012

Please don’t tell anyone, but some of my friends are evangelical conservative Republicans, my political polar opposites.

I am a talking voice on an Internet radio political talk show in small rural southern county begun and moderated by an Episcopalian vicar.

I am an unapologetic Democrat on a program that broadcasts to an audience that is close to 65-percent Republican. Two of the local county commissioners, Jim and Carl, are unabashedly evangelical conservatives who, despite a federal court ruling to the contrary, open county commissioner meetings with Christian prayers. They led the opposition to same sex marriage.

Regardless, I like Jim and Carl.

I’ve known Jim for 40 years. If I were drowning, I bet he would be the first to dive in to save me. I knew of Carl – I didn’t really like him – but I met him across the table every week as one of the Republican talking voices, and I now really enjoy being with him.

Most of the time, I find myself swimming upstream advocating my theories that government is important, does good and is critical to helping make tomorrow better than today. That makes me a liberal. In today’s world, I cannot be called much worse. Carl and Jim generally believe the best government is the least government and support traditional values, that is, that yesterday was better than today.

The U.S. political axis shifted in the 1960s. We put a man on the moon, but we also expanded the social safety net and waged a failed War on Poverty. Voters began shifting to conservatism. President Richard Nixon exploited the politics of division. When he declared that he was not a crook, government became the enemy, not the friend, of the people, even though the government is us.

Carl and I laugh way too much. We and the other talking voices share humorous emails during the week.
We also agree on a surprising number of issues, or at least, find a lot of middle ground. Maybe too much. Every week, I find myself saying, “If anyone hears that I agree with Carl, it may ruin my reputation.”

Carl jokes likewise.

That’s not to say that Carl and I don’t disagree. We do, but we are never disagreeable or nasty toward each other. I miss Carl when he is not there. He genuinely believes what he believes and that makes me think. And we laugh.

One question last week was, “What is necessary to revitalize our county’s economy?”

I said: “For decades, the county’s economy was dependent on textiles. Almost 10,000 jobs are gone and are not coming back. Independent drug stores like my family’s are being crushed or swallowed by CVS, Walgreens, and Walmart. The only answer, in my opinion, is to have a strong education system that produces a highly qualified workforce and strong leadership that aggressively chases smart businesses because we offer them a workforce and lifestyle no one else can. Amazon is opening 140 new warehouses around the country. Why not here?”

Carl talked about reducing regulations and the importance of widening the interstate highway in the county. I agreed having been through a regulatory purgatory but reminded him that building highways was a government action.

Carl and the other participants on the broadcast are different than I am. They put their names, their ideas and their reputations on the ballot. Abraham Lincoln once said, “Only the test of fire makes fine steel.” They face the heat of public opinion. I only write about it.

Certainly, I’ve disagreed with Jim and Carl – particularly on the public prayer issue – and have said so to them publicly. But, if I ever ran for office and won – both very unlikely – I’m confident that we would get along, find a lot of common ground and have some laughs along the way.

A few weeks ago, I met Joe Scarborough, Morning Joe on MSNBC. He talked about how “vile” Washington has become because congressmen no longer know each other personally. He talked about his first term as a Republican congressman when he was hell-bent against a Democrat who had proposed new legislation. One day, he picked his daughter up at kindergarten and learned that her best friend was the Democrat’s daughter. He thought, “Oh, my God, he’s a nice guy. I can’t attack him.” He toned down his rhetoric and worked out a compromise.

President Ronald Reagan and House Speaker Tip O’Neill were on opposite sides of the political spectrum but famously shared drinks and laughter after dark.

Washington must find a way to be pleasant to each other again. Only then will government work again.

See you next week, Carl.

The Dancing Monkeys of Libor
• August 7, 2012

Aesop tells the fable of a prince who had trained some monkeys how to dance. As natural mimics, they soon proved to be very good dancers. And when dressed in rich clothes and masks, they danced as well as any of the human courtiers. The spectacle at the lavish parties the prince held became wildly popular throughout the land and was repeated each night to great applause from the partygoers.

Applied today, at a time where the extremely affluent are today’s self-appointed royalty, the prince could be the CEO of any of the world’s superbanks: Barclays, JPMorgan Chase, Citibank, or Deutsche Bank. No commercial arena has consolidated more power, influence and wealth. In that glamorous world of hedge fund managers and investment executives, the monkeys—the lowest-of-the-low (with the low bonuses and salaries to prove it)—are the money market traders.

Until the financial boom began to show signs of slowing, there was no real incentive for the royals of finance to pay any attention to their money market traders. With their princes awash in cash, this band roamed the dense jungles of finance from The City of London to Wall Street, happily feeding off scraps. One day in 2007, however, the jungle caught fire and began to consume their collective habitat. Cash flew out of high rise windows. Banks began to fail. Panic ensued.

A few years earlier, Thomas Haye, and Philippe Moryoussef, both former derivatives traders, began to form loose cells of fellow traders from the other superbanks to manipulate interest rates. They had one goal: to obtain advance knowledge of the benchmark interest rate. Together, they communicated with the money market traders—the monkeys—and then colluded to rig the world’s benchmark interest rate, called the “Libor.” The adjustments were slight—usually just fractions of a percentage point—with the specific intent to eliminate any uncertainty in the rise or fall of the core interest rate.

It was a dazzling and grand scheme. Today, the Libor is tied to up to an estimated $800 trillion in financial derivatives and instruments worldwide.

And so it went. Suddenly, the prince’s monkeys found themselves in the spotlight, with a key role in eliminating uncertainty for the superbankers—the princes. They were now thrust on center stage.

The advanced rigging was often done in bars and pubs over champagne.

“Come on over; I’ll open a bottle of Bollinger,” one trader emailed his colleague after a triumphant Libor rigging session. To another monkey trader he exclaimed, “Dude. I owe you big time!

… I’m opening a bottle of Bollinger.”

What’s the harm in a little Bollinger?

When I recently asked one veteran Wall Street friend his thoughts on the Libor scandal, he shrugged. “Nothing significant will be done about it because the adjustments were done mostly on the downside, not the upside.”

It’s taken me a while to frame my thoughts on this, but I’ve come to the conclusion that my Wall Street friend is wrong. Libor matters to everyone. Everyone who borrows money—whether it’s a car loan, student loan, credit card, mortgage or personal loan is affected by what happens to the Libor, because it affects the cost of money for all of us. So, if the Libor rate was artificially high when you took out any of those loans, you were effectively ripped off.

Many pension funds are also pegged to the Libor. Cities like Baltimore are suing the superbanks involved with artificially rigging interest rates because of the adverse affects the rigging had on their city pension funds.

Superbanks who were in relatively weak financial shape arranged through the growing Libor cartel to artificially inflate or deflate their interest rates to give the false impression that they were strong and creditworthy.

What’s perhaps most intriguing about the Libor scandal is how brazenly and open the collusion was:

“Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.”

–Senior trader in New York to submitter

Senior Department of Treasury and Federal Reserve Officials openly admitted that the Libor was “deeply flawed,” and yet proceeded to use the same rigged rates for federal bailout programs like TARP, knowing that in doing so, they were saving the superbanks billions and billions of dollars.

So, even if you still don’t know what Libor is, know this: it’s a very big deal, and we’re all affected. “This is the banking industry’s tobacco moment,” said one bank’s CEO. “It’s that big.” An investigating official recently remarked, “It’s hard to imagine a bigger case than Libor.”

Aesop’s fable goes on to relate how the prince’s monkey’s were received with great applause, until on one occasion a courtier, bent on mischief, took from his pocket a handful of nuts and threw them upon the stage. The Monkeys at the sight of the nuts forgot their dancing and became (as indeed they were) Monkeys instead of actors.

Pulling off their masks and tearing their robes, they fought with one another for the nuts. The dancing spectacle came to an end amidst the laughter and ridicule of the audience.

Let’s hope that the Libor Cartel Show has come to an end, and that the Glass–Steagall Act is being brought back to replace it.