Bonuses, Suicide, Tits: Chuck Grassley Sums It Up.

Seems like Sen. Chuck Grassley (R-Iowa) picked the wrong week to stop sniffing glue.

It all began on Monday when Sen. Grassley was steamed about AIG bonuses. He suggested that AIG executives should resign or “commit suicide.” Not surprisingly, he apologized the next day by claiming that he didn’t mean suicide literally. → source

So, how can Grassley redeem himself? Easy! He throws himself a press event and utters the following sentence: “From my standpoint, it’s irresponsible for corporations to give bonuses at this time when they’re sucking the tit of the taxpayer.”

One thing is not quite clear to me. Does the sucking tit part come before committing suicide or as a result of it?

Prilosec Commercial Dancing Proves White Folks Can’t Dance

No introduction or words necessary.

Rick Santelli’s Ridiculous, Childish And Uninformed Rant

If you haven’t already heard or seen Rick Santelli’s rant on CNBC, check out the video below. If you have, then you probably have already made up your mind about whether he’s right or not. I hope to challenge you if you’re on his side.

Background: Santelli is a CNBC reporter (and a former derivatives trader). Last week, he went on an unintelligible rant on Chicago’s trading-floor about the $75 billion stimulus package. Among other things, he said that “the government is promoting bad behavior” by bailing out “the losers” who took out irresponsible mortgages. He went on to ask “how many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bill, raise their hands.” Cheers were shouted by floor traders.

I will not address here whether or not the stimulus package is good for our long term prosperity. That topic is irrelevant. Instead, I want to address Santelli’s idea that bailing out “the losers” who took out irresponsible mortgages promotes bad behavior.

We live in America. It’s the land that has most famously coined the phrase “government of the people, by the people, for the people” by a famous Republican at Gettysburg. In other words, the government is instituted to protect the people of this country – not the corporations, not the banks. The operative word here is the people. 

Yes, many “losers” bought houses they could not afford. Many “losers” lied about their income on their mortgage applications. Many “losers” did not consider the inevitable consequences of signing up for unaffordable and incomprehensible mortgages. Those “losers” deserve to lose their homes. Those “losers” are partially to blame.

But then you should also consider that those “losers” would not have qualified for mortgages if the banks and mortgage companies had not made it possible. In fact, by many accounts, they down-right encouraged the practice of lending money to those who had no hope of repayment. Mr. Santelli didn’t mention anything about promoting bad behavior by bailing out those banks and mortgage companies, did he? Not once did Mr. Santelli condemn the banks for fraudulent practices, did he? Where’s your outrage, Mr. Santelli, about keeping zombie banks such as Bank of America alive? Aren’t failed banks “losers” too? Oh, I see! The banks are too big to fail, but the people are dispensable. 

I strongly believe in a free market economy. But the concept of free market does not imply screwing the people for the benefit of corporations. The government’s focus should be to protect the people (rather than corporations) with reasonable regulations.

Please don’t tell me, my conservative friends, that you are for less government. I consider myself more conservative than liberal. But what does less government mean? It does not (and should not) mean lack of protection for the people. Do you truly believe that less regulation is always necessarily better? Do you? Do you believe that toy companies, in absence of meaningful and reasonable regulation, would have alerted you that your child is licking Chinese toys painted with lead? Free market competition would not have helped in this case if there was no mandated testing of toys. No one, including the competition, would have known about the lead paint. 

I can cite many other examples, but this is not the post for it. Most conservatives I know seem to think free market implies less government regulation, but no one I speak with seems to be able to quantify what that means or how that would affect their families and daily lives.

So, Mr. Santelli, how about some respect for the people. If you rant about ”losers” who purchased houses they cannot afford, then you should go on an even bigger rant about corporations that made it all possible and encouraged the practice. If it’s OK to bail out the banks, then we should bail out the people. In my opinion, neither the people nor the banks should have been bailed out. 

Rant of the year? I’m calling BS on this one. Your rant was down right irresponsible. You wouldn’t have a day job, Mr. Santelli, would you?

McDonald’s: Be A Hero And You’ll Forfeit Your Workers Compensation

Nigel Haskett

Here’s yet another easy PR opportunity that a large corporation has managed to foul up. Remember the Walmart debacle in March 2008?

It’s McDonald’s turn. Last summer, 21-year old Nigel Haskett was working at a McDonald’s in Little Rock when he observed a man smacking a woman in the face. Haskett fought the man, Perry Kennon, removed him from the premises and refused to let him back in. Moments later, Kennon returned with a gun and shot Haskett several times. 

Haskett underwent three abdominal surgeries. In retrospect, his recovery was easy. Receiving any monetary assistance from Workers Compensation to cover over $300,000 in medical bills was anything but easy. The official word from McDonald’s is: “we have denied this claim in its entirety as it is our opinion that Mr. Haskett’s injuries did not arise out of or within the course and scope of his employment.”

To be fair, McDonald’s claims that employees are instructed NOT to be heroes in the event of a robbery or potentially violent situation and to call 911. Haskett, on the other hand, claims he never received such instruction during his 30 minute orientation.

Clearly, this is an initial finding and by no means the final outcome of this case. But come on, McDonald’s! Even if you believe Mr. Haskett’s action was improper – and it may have been – you should know that most people will react negatively to this decision. Your customers will always cheer for and be on the side of a hero – someone who selflessly aids others. All you have to do is to announce that Haskett may have stepped beyond his expected duties, but that you (McDonald’s) are capable of recognizing and rewarding a hero. $300,000 is pocket change compared to the bad publicity you’re about to generate.

Hey McDonald’s, don’t be like Walmart. Don’t screw up this easy PR opportunity.

Ponzi Scheme: 1, Insider Trading: 0

As of January 14, Bernie Madoff has managed to remain out of jail and only under house arrest in his Manhattan apartment.

I know it’s still early in the investigation of this case, and that he will likely serve some prison term. But does anyone else see the irony in all this. Madoff created a $50B ponzi scheme. Countless people lost their savings and investments. His actions negatively affected the lives of others. In contrast, Martha Stewart served a 4-month jail sentence in 2004 for improperly selling (through insider trading, as it’s claimed) 4000 shares of ImClone. That action, in contrast, did not directly harm others’ well being.

Welcome to our justice system.

Temporary Life Line For The Big Three Compliments Of Bush, The Unlikeliest Source

Perhaps the Mayans were right all along in their belief that 2012 marks the end of the world as we know it. Numerous recent signs point to troubling, unexplained and unprecedented events.

Obama’s victory was unprecedented. The global financial meltdown is troubling. President Bush coming to the aid of the auto industry, UAW praising Bush, and a Democratically led Congress defeating a bailout package for the big three are all unexplained.

I am not an economist by any mean, but I do exhibit (most of the time) common sense and do employ (ditto) logic in my views. In the case of auto industry bailout, I’m not afraid to admit that I don’t know what the right answer is. I said so in a previous post ”Auto Industry Bail Out – What To Do, What To Do“.

First, what bothers me more than anything else about this bailout is that President Bush and VP Cheney are fierce supporters of it. That makes me skeptical beyond explanation. It is the same healthy skepticism I have of Al Gore’s intentions. Whether global warming is real or not is irrelevant to me as compared to the unbelievable profit he has made from preaching it. Gore owns a carbon trading company. He makes about $10M per year and has an estimated worth of about $100M. Google it if you don’t believe me.

Second, I reject Congress’ grilling of auto CEOs with respect to their private jets. That was just silly. It was time ill-spent. GM claims that it requires $4B to survive the next few weeks. Even if the total monthly cost of ownership and operational maintenance of GM’s private jets is $4M (and that is an uncharacteristically high number, I’ve researched it), that represents a mere one tenth of one percent of GM’s $4B deficit. In other words, who cares? I promise you, the auto industry’s problems are not because of owning and operating corporate jets. 

Perhaps it was the symbolism of riding in private jets while asking for a bailout (or loan depending on your point of view). Should the CEOs have demonstrated sound judgement and left their corporate jets back in Detroit? Of Course. But let’s be realistic and not waste time on irrelevant issues.

Finally, the entire idea of CEOs working for $1 a year is also merely more symbolic than useful. Again, I promise you, that solves nothing. Their salaries are mere pocket change compared to their debts. Why $1? Who’s idea was that? Why not $0? Why not ask the CEOs to work for nothing AND give back 5% of their company stocks to be reinvested in their own company? That would make much more sense.

Auto Industry Bail Out – What To Do, What To Do

By now, we all know the fate of the $14 B auto industry bailout bill. It was killed in the Senate last Friday. I admit it. I am torn by cognitive dissonance. I don’t know which side of this issue I am – or should be.

Reasons For The Bailout

• The financial industry, which is ultimately responsible for this global meltdown, received a bail out with no strings attached. We (our Republican President and administration) could not wait to rush to the aid of all those billionaires who run banks, and whose wealth came from (and despite of) their ill decisions that brought us this recession. 
• The auto industry is precariously intertwined with many other ancillary industries, factories, and businesses. The livelihood of countless families is at stake, many of whom are mere innocent pawns. Conservatives should be best equipped to comprehend this situation. If you believe in trickle-down economics with respect to wealth-building and benefiting the broad population, you should also agree that the opposite effect could be just as authentic. Auto industry’s collapse could negatively and inadvertently trickle down and hurt the broader population. 
• How do you justify withdrawing promised benefits to those whose sweat went into building cars for decades? Were the benefits they were promised illogical and unsustainable? Perhaps. But blame negotiators on both sides, not actual workers.
• As compared to the financial sector which is built on a complicated house of cards involving speculation of non-tangible papers and securities, the auto industry at least has a real, physical and touchable product. Is it a product that is not as good as it could be? Yes! Does it have trouble competing in a global market? Certainly! But that’s besides the point.
• Remember when we bailed out Chrysler a couple of decades ago? They paid the taxpayer’s loan back early and in full. It can be done, and there’s precedence for it.

Reasons Against The Bailout

• Free market economy functions spectacularly when outdated ideas and industries are quickly phased out. Most Democrats should understand this part well. If you consider yourself an environmentalist or if you believe in evolution, you are fully aware that Mother Nature executes the plan of natural selection with brutal efficiency. Emulating that which has been perfected for over 4 billion years (sorry my religious friends, it’s true!) should be beneficial in the long run.
• Even if you don’t believe in evolution, bailing out the auto industry should make you cringe. How long, and at what price, should the Pony Express or Telegraph companies have remained in business? Should they have received a  bailout?
• President Bush and Vice President Cheney are in favor of it! Seriously. It’s been reported that Cheney has advised GOP Senators that it’ll be “Herbert Hoover” time if aid to the industry is rejected. That tells me something profound. It convinces me that this is a futile attempt at saving his administration’s legacy and, as such, I am not able to support it. 
• The auto industry itself has resisted ideas and legislation for years. They have stopped at nothing to align themselves with oil companies. Let the oil companies use their record profits of the past two years to bail out auto companies.

What to do , what to do, . . .

It’s NOT The Economy Stupid, It’s The Stupid Economy

By now, we all know that Congress failed to pass the $700 billion bail-out package on Monday. I’m glad. It does not imply that I don’t care about pain and suffering of the average American. I have learned that opposing any plan that President Bush says is absolutely urgent with dire consequences requires much needed time out and contemplation.

I reject Republicans’ whining that Nancy Pelosi’s speech, just prior to the vote, condemning Bush’s policies is the culprit for the failed bail-out. Karl Rove, on O’Reilly’s show on Monday night, said that the Republicans had no choice. Many in Pelosi’s leadership team voted against the bill, which prompted minority Republicans to also vote it down. Oh, please stop insulting my intelligence by presenting Republican lawmakers as a bunch of weak pansy pushovers that blindly follow Democrats’ commands to sit and stay. I’m not buying this ‘Pelosi Republicans’ non-sense. Subsequent to Pelosi’s speech, 60% of Democrats voted for the bill and 60% of Republicans voted against it. How could Pelosi’s speech have had such a spellbinding power over Republican lawmakers. Did she hypnotize them? Did she slip a Mickey in their drinks? If Pelosi can exert so much power over Republicans, Democrats better seize the opportunity and bottle this intoxicatingly potent and yet masterfully cloaked power. Gosh, I sure hope Democrats use it for good and not evil!

This is a bad bill by conservative standards. In what way is it acceptable to believe in conservative values which rely on self-regulating forces of free market, but expect to step in when things go south? If it’s OK for oil companies to make unprecedented profits despite the chocking effect on the American economy and consumers, it should also be acceptable to let market forces choke the banking system. If conservatism thrives on less-to-no regulation, then government involvement should not be an option for Republicans to pursue. Benefit and risk are the Yin and Yang of free market forces. Corporations should be free to benefit from fruitful risk-taking decisions. At the same time, they should swallow hard and suffer consequences of failure.

This is a bad bill by liberal standards. For a group with an ideology that epitomizes big bad corporations as red-hooded wolves who feast on poor old weak grandmas, this is a heck of a departure toward capitalism. Why would you want to force tax-payers to pay for mistakes of corporations? Where’s your compassion for people?

The economy and market forces are always partially at the mercy of natural harmonics. Everything is susceptible to movements of up and down, left and right, right and wrong, feast and famine, war and peace. You get the picture. Prosperity and recession are not immune from this natural experience. We’ve had prosperity for a while, and now it’s time for recession (maybe).

Alternative solutions from both Republicans and Democrats are ill-advised. Republicans introduced the idea of completely eliminating capital gains tax into the bail-out plan. That’s just stupid. The solution to a failed policy of reduced regulation is not to pile on more of the same. And this is not the right time for it. Democrats introduced more regulation such as a stock-transaction charge. This is equally as ridiculous.

Let the markets’ natural forces take their course. Quick, unprecedented and expensive fixes may temporarily sway the economy in a desired direction, but its effect will be short lived. The full force of its bounce back as a result of our feeble and misdirected impulse will be disastrously more painful and prolonged. We have a choice. We can mess with natural market forces, enjoy a short-lived period of prosperity, and soon suffer its consequences. Or we can face the music now, suffer a short-lived painful period of stagnation, but enjoy a quicker recovery out of this miserable mess.

I predict we will take the first approach. We are Americans. We want less pain, more prosperity, quick fixes, and we don’t want to pay for any of it. Well, guess what? That attitude has now caught up with us. Are we sufficiently intelligent to recognize it?

Memo To Airlines: Only Positive Incentives Are Effective

I just purchased a very expensive international plane ticket. Let’s just say it was very, very expensive. And that’s not all. There are very stringent restrictions on luggage based on number and weight. Exceeding the weight limit by even one pound will result in paying dearly for it.

This made me think. As any good teacher is already aware, negative incentives do not work. Telling children not to do something gives them exactly a reason for doing it. Even in business transactions, a good negotiator knows that a positive approach is much more likely to succeed than a negative one.

Here’s my out of the box proposal. Let’s face reality. By many recent accounts, over 40% of ticket prices go toward fuel (source). Weight affects fuel consumption. Therefore, airlines should set ticket prices according to total weight of the passenger and his/her luggage irrespective of the number of bags. This applies to both checked and carry-on luggage.

For example, let’s assume a hypothetical weight limit of 240 pounds. A 190 pound individual can only pack 50 (total) pounds in one or two bags, or pay more for the extra weight. A 150 pound individual can pack 90 pounds of luggage. A 210 pound individual – you guessed it – can only bring 30 pounds. And no, this is not discrimination against larger individuals. This is just the reality of the current situation.

Further, airlines should incentivize lower weight usage by passengers. If the total weight (me and my luggage) that I carry on the plane is only 200 pounds, then I should receive money back from the airline – the same amount per weight that they would charge me for over-weight condition.

Negative incentives don’t work. Are you listening airline industry bigwigs?

Japanese Solar-Paneled Bra: Check Out Them Digital Displays!

Someone stop the Japanese from inventing – please!

Only 2 days after I wrote my previous post about a new Japanese cigarette machine, a new useless and completely idiotic invention has hit the airwaves: the Japanese Solar-Paneled Bra!

It’s an eco-friendly bra by Japanese lingerie maker Triumph International. It has a solar panel and a digital display, and it’s made with material that looks like artificial turf. Congratulations to the Japanese for achieving the impossible: they have successfully invented a bra that turns men OFF. It produces enough electricity to power or recharge a mobile phone or an iPod. I can’t wait to go up to some woman and ask nicely if she can help . . . energize my gadget. There’s only one problem. Solar panels require direct sunlight; women cannot wear a shirt on top of this bra.

The manufacturer warns would-be users of this undergarment NOT to wear it on rainy days. I wonder what the washing instructions say.