Oh my, my, my!

http://www.nytimes.com/interactive/2014/02/01/nyregion/bridge-letter.html

In a letter from David Wildstein’s attorney to the General Counsel for the Port Authority asking them to reconsider footing the bill for Mr. Wildstein’s legal fees they let this drop:

…evidence exists as well tying Mr. Christie to having knowledge of the lane closures, during the periods when the lanes were closed, contrary to what the Governor stated publicly…

If such evidence is legitimate and is produced, the Christie resignation watch can commence. Then the Lt. Gov. Guardagno resignation watch can begin. She might get a week or two as governor unless they have to negotiate a package resignation.

Who will be my governor? Senate President Stephen Sweeney is next in line after the Lt. Gov. I’m betting even money he’s the governor of NJ before the end of 2014. At this rate it could be before March!

It’s like a bad sit-com. I’ve been following the story of how Volkswagen in Germany is, of course, heavily and successfully unionized and would like to have their Tennessee plant join the UAW. The NYT has an update today. But local politicians and Club for Growth anti-worker propaganda outfits are working overtime to keep Tennessee union free and right to work for less. So yes, the company wants the union, the workers want the union but local activists do not. It’s insanely bizarro-world ironic.

A business-backed group put up a billboard declaring, “Auto Unions Ate Detroit. Next Meal: Chattanooga,” while a prominent anti-union group, the National Right to Work Committee, has brought legal challenges against the U.A.W.’s effort, asserting that VW officials improperly pressured workers to back a union. (emphasis mine)

The anti-union forces, like anti-tax freak Grover Norquist’s Center for Worker Freedom (fully utilizing the expected Orwellian nomenclature) have hilariously claimed that the field is unfairly tilted because they should have as much access to the workers (to lie to them) as the union and the company management has.

The story in a nutshell is that German companies have worker councils that work hand in glove with management that they feel give them competitive advantages. VW thinks it would be a great idea if their American plants had them too. But what would VW, and their workers who chose to unionize, know about running a car company and manufacturing cars? Clearly, Grover Norquist and GOP Senator Bob Corker know better.

Senator Corker said…“While I care about Volkswagen, what I care most about is our community and about our households being able to progress and have a great standard of living,” he said….

He added, “The work rules and other things that typically come with the UA.W. would drive up costs. It would make the facility less competitive.”

The anti-union organizers (anti-organizing unions?) are frightened to death that their work to kill unions will be undone by a resurgence of collectivism. If the union gets into VW, then BMW and Mercedes will be next and before long being a right to work state will have lost all its meaning.

The only thing they’re more scared of is the lack of hatred that young people are evidencing towards unions. Decades of demonizing unions has not seemed to had much effect on those young people striking against McDonalds and Walmart. And now student athletes want a union?

What are we coming to?

Michael Moore points out in HuffPo that in adjusted dollars Henry Ford way exceeded $10.10 an hour in 1914.

One hundred years ago this month Henry Ford began paying his workers a minimum of $15 an hour! (It was $5 for an eight hour day – which would be worth $116.48 now.) That’s right – in a much poorer America, one without TV, radio, phones or House of Cards on demand, Ford could afford it. In fact, Ford later said, he couldn’t afford not to: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”

CNNFortune explains Why income inequality should matter to corporate America.

In the U.S., the gap between rich and poor is wider than it has been since the 1920s. The top 1% own 42% of the nation’s wealth and on average made $717,000 per year from 2008-2012 compared to $53,046 for everyone else. While the financial crisis of 2008 may have hurt all of us somewhat, the 1% reaped 95% of all income gains since that time.

These statistics are pretty depressing, and yet they still don’t capture the wider implications that income inequality could have on U.S. businesses and the broader economy. Those who earn less typically spend less. That’s obvious, but less talked about is how the growing gap between rich and poor could dampen the motivation of workers and therefore lead them to produce less.

Obviously when people’s choices are limited to choosing between McDonalds, Walmart or some other extremely low wage situation, that is discouraging. We’ve seen this with the fast food and Walmart workers increasingly willing to risk their jobs and go out on strike to paid a more livable wage. If the American Dream just seems like a come on for suckers then business is going to find itself struggling to find motivated workers.

Costco gets that. Henry Ford got it 100 years ago.

The entire article is interesting and I expect will be dissected on the TV tonight post-SOTU.

Staff members in the governor’s office created tabbed and color-coded dossiers on the mayors of each town — who their friends and enemies were, the policies and projects that were dear to them…

Long after most of the State House had been shuttered for the night, Mr. Christie’s aides worked on spreadsheets, documenting calls and meetings with key players in the towns — one Republican called it “political Moneyball” — as the governor tried to win endorsements and friends.

Officially known as “intergovernmental affairs,” the operation was a key element of the permanent campaign that allowed Mr. Christie to win twice in a largely Democratic state. It was led by Bill Stepien, his two-time campaign manager and deputy chief of staff, and then by Bridget Anne Kelly, who succeeded him in his role in the governor’s office.

The question before prosecutors today is how far would the Christie people go to reward friends and punish perceived enemies? I think it will become clear that it is mostly about this kind of pay to play abuse of power, whether it’s about endorsements or property development. If they used Sandy funds as a cudgel, just like they apparently closed traffic lanes and DMV offices to punish “enemies”, they weren’t just effecting the pols they had a beef with, they were hurting citizens directly. This may not be unprecedented in politics, but it’s unforgivable when discovered, and it’s extremely understandable by the public as an abuse.

This is the paragraph that stood out to me:

Mr. Christie himself tended to the smallest of details. He personally oversaw appointments to the State Board of Physical Therapy Examiners, legislative leaders said, and when he wanted to discuss something with lawmakers, he texted them himself. (He told one top legislator that he had learned from his experience as United States attorney not to email; texts were harder to trace.)

So Christie had his sausage fingers in so many pies that he “personally oversaw appointments to the State Board of Physical Therapy Examiners” but did not know about Fort Lee until December? Yeah, not working. The irony of the text v. e-mail debate is delicious.  

There was a lot of speculation about the State of the Union address, as there always is, that the President would be ready to be confrontational about the almost complete stasis in Congress, about income inequality, about the insane disrespect shown him as president. After the 5 years of watching this President turn the other cheek in the most congenial way, were those expectations realistic? No.

As much as we might want him to, Obama would never throw up his hands in public, call out the GOP and place it all on their heads – as appropriate as that would be. Instead he worked his zen jiu jitsu to wink at the Republicans, graciously acknowledging their intransigence, while asserting that he is not giving up in trying to lead the country and working towards solutions. And he’s going to keep hoping and praying that Republicans will want to do their respective jobs and work with him (wink, wink, he knows they won’t). But his infectious good nature and sunny optimism in the face of their mean spirited obstructionism absolutely undermines their message that he’s the problem what with his Muslim, Hitler unAmericanism.

The question for everyone in this chamber, running through every decision we make this year, is whether we are going to help or hinder this progress. For several years now, this town has been consumed by a rancorous argument over the proper size of the federal government. It’s an important debate — one that dates back to our very founding. But when that debate prevents us from carrying out even the most basic functions of our democracy — when our differences shut down government or threaten the full faith and credit of the United States — then we are not doing right by the American people….

And in the coming months, let’s see where else we can make progress together. Let’s make this a year of action. That’s what most Americans want, for all of us in this chamber to focus on their lives, their hopes, their aspirations. And what I believe unites the people of this nation, regardless of race or region or party, young or old, rich or poor, is the simple, profound belief in opportunity for all, the notion that if you work hard and take responsibility, you can get ahead in America.

He calls out the intransigence, gently, reminding people of the shut down. He recalls the “rancorous argument” but he is without rancor. He brings up inequality, but using the words “opportunity for all”, language that is universally accepted and not seen as divisive. Most importantly, “Let’s make this a year of action” when almost every pundit called 2013 a wasted year and expects 2014 to be even worse because of the Nov. midterms. Obama set up the Democrats for those midterms by the challenge of this speech to be active, serve the American people and increase opportunity.

But what I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class and build new ladders of opportunity into the middle class. Some require congressional action, and I’m eager to work with all of you. But America does not stand still, and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.

The stasis will not stand, man. Work with me, or watch my dust. Watch my approval rate go up and yours continue to scrape the ocean floor along with whale shit.

The point is, there are millions of Americans outside Washington who are tired of stale political arguments and are moving this country forward. They believe, and I believe, that here in America, our success should depend not on accident of birth but the strength of our work ethic and the scope of our dreams. That’s what drew our forebears here.

This is as leftist an assertion as you can get – and guess what, only the Koch Brothers and the few real economic elitists would publicly disagree with this. This core tenet of America is what makes us a center-left country no matter what the beltway bloviators say.

Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home…. create jobs rebuilding our roads, upgrading our ports, unclogging our commutes… my administration’s launched two hubs for high-tech manufacturing in Raleigh, North Carolina, and Youngstown, Ohio, where we’ve connected businesses to research universities that can help America lead the world in advanced technologies. Tonight, I’m announcing we’ll launch six more this year…

All popular ideas. The hubs are a version of Jack Kemp’s enterprise zones. Who could object?

He spoke about energy in the context of climate change, extolling natural gas as a cleaner bridge to renewables (which it is) without mentioning fracking (bad) and pushing solar. Again, he asserted what every fair minded person knows – that climate change is real and the people in the room shaking their heads are not fair minded or honest.

It is time to do away with workplace policies that belong in a “Mad Men” episode.

Cathy McMorris Rodgers, the Republican given the horrible task of doing the so-called “response” did not vote for the Lily Ledbetter Act. McMorris Rodgers, although reportedly possessing a vagina, consistently votes against legislation addressing gender equity, reproductive freedom and women’s healthcare concerns. It’s the policies coming from the retrograde Republican Party that comprise the front of the War on Women just as much as the sexist comments from their male politicians and talking heads. Throwing a woman up there does not prove you are on the side of the 51% of the population you consistently disrespect.

Finally, the very popular minimum wage issue. Even a majority of Republicans are on board with raising the minimum wage. This, like almost all of the issues in the speech are issues Americans agree with him and the Democrats on. Only Congressional Republicans stand athwart the issue crying “Halt!”

To every mayor, governor, state legislator in America, I say, you don’t have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too. In the coming weeks I will issue an executive order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour because if you cook — (cheers, applause) — our troops’ meals or wash their dishes, you should not have to live in poverty…. Give America a raise.

What a great line. A master stroke to put the GOP in the position of pushing forward with the President and the public or standing out as an obstructionist sore thumb.

You want to know how effective this speech was? GOP operative Alex Castellanos said:

A speech by Barack Obama is a lot like sex. The worst there ever was is still excellent

HA!

That’s right. The United States did not diplomatically recognize the Holy See until Reagan established diplomatic relations in 1984.

The real fun fact is why no diplomatic recognition existed until then: separation of church and state. It was viewed as an unconstitutional violation of the separation of church and state to recognize the Pontificate as a foreign nation. Also, American Protestants were hostile towards the Pope and the Catholic hierarchy and were historically against such recognition.

For much of the 20th century U.S. Presidents would send a personal representative to the Holy See, but they were not an official ambassador until 1984.

History can be surprising and illuminating, no?

Barry Ritholtz’s The Big PIcture Blog is terrific. He’s an investor and finance guy who explains economic issues in approachable terms. He also writes for Bloomberg and makes frequent appearances on Stand Up With Pete Dominick on Sirius 104 to talk about economic issues. 

His very realistic approach to the climate change issue is thus:

My perspective on global warming is different from some. As a car and boat enthusiast, the various gasoline-powered vehicles I own crank out a few thousand horsepower and generate a not-insignificant amount of pollution. However, I don’t pretend climate change is a hoax or that it won’t matter in the future. So long as creating pollution is cheap and legal, we won’t see many people changing personal behavior. The most likely fix for this is some form of a carbon tax.

To Ritholtz the scientific debate is over. What remains is the debate about how we’ll remediate and to a very large degree who will win the jockeying for “market share” and who will adapt and invest or disinvest wisely. Unfortunately, our best hopes for coming up with a plan that’s politically viable is for business interests other than oil and coal to decide what’s in their best interest and influence legislation. Make no mistake they will be doing it to bolster their bottom line firstly, and to save mankind secondly. 

Business and the military have been modeling potential global climate change scenarios for years. They’re well ahead of the stupid political debate where one side calls it a hoax and nothing gets done.

Investors should be considering this as a fight over market share, not a scientific debate. That is the approach taken by McKenzie Funk in a new book, Windfall: The Booming Business of Global Warming. The impact is across many industries. It’s time to throw out your preconceptions of climate change as a fight between green hippies and Big Oil. This is far broader and more complex. And it goes far beyond energy, to include agriculture, insurance, transportation, construction, recreation, real estate, energy exploration, food production, health care minerals and even finance.

The right has to come to reality and stop science denial. The left has to realize that short of getting money out of politics and fearlessly enacting real change like a carbon tax, our real allies in this fight are our natural “enemies” of industry and the military. We will have to work with them to move the GOP and the public towards a consensus for reasonable action.

On Jan. 17 I noted that 75 economists were urging our brilliant and honorable leaders to raise the minimum wage and the GOP were sticking their fingers in their ears and singing “nah-nah-nah, I can’t hear you” (Grammy winner, best taunt song 1973).

Now 602 economists are urging them to do it. That’s 300 buff, greased warrior economists defending Sparta’s economy – times two!  PLUS TWO!

The 602 economists — including seven Nobel laureates and eight former presidents of the American Economic Association — have signed an open letter calling on President Obama, House leaders John Boehner (R-OH), Eric Cantor (R-VA), and Nancy Pelosi (D-CA), and Senate leaders Harry Reid (D-NV) and Mitch McConnell (R-KY) to raise the minimum wage to $10.10 per hour by 2016, and index it to protect against inflation thereafter.

The GOP could ignore the 75. Can they defend their kingdom of Stupidstan against the 602? King Boehner the Orange has stood stalwart against such a raise in the minimum wage claiming that raising the price of labor will cost jobs.

According to the PhDs who signed the EPI letter, however, Boehner is flatly wrong.

“In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market,” the letter reads. “Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”

The reality is that the citizens of Sparta, Persia and America all agree that the minimum wage should be raised. I expect that Boehner the Orange will continue his opposition. The issue then will go to the ballots in 2014 and be for Democrats what gay marriage was 10 years ago for Republicans, inspiring their base to come out and vote and boosting the electoral chances of Democratic tickets across the country.