How about those minimum wage laws

So exactly what do minimum wages laws do to an economy?

A couple of researchers have a book with the consequences....

Minimum wages exist in more than one hundred countries, both industrialized and developing. The United States passed a federal minimum wage law in 1938 and has increased the minimum wage and its coverage at irregular intervals ever since; in addition, as of the beginning of 2008, thirty-two states and the District of Columbia had established a minimum wage higher than the federal level, and numerous other local jurisdictions had in place "living wage" laws. Over the years, the minimum wage has been popular with the public, controversial in the political arena, and the subject of vigorous debate among economists over its costs and benefits.

In this book, David Neumark and William Wascher offer a comprehensive overview of the evidence on the economic effects of minimum wages. Synthesizing nearly two decades of their own research and reviewing other research that touches on the same questions, Neumark and Wascher discuss the effects of minimum wages on employment and hours, the acquisition of skills, the wage and income distributions, longer-term labor market outcomes, prices, and the aggregate economy. Arguing that the usual focus on employment effects is too limiting, they present a broader, empirically based inquiry that will better inform policymakers about the costs and benefits of the minimum wage.

Based on their comprehensive reading of the evidence, Neumark and Wascher argue that minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital. The authors argue that policymakers should instead look for other tools to raise the wages of low-skill workers and to provide poor families with an acceptable standard of living.

But hey, why let something like science get in the way of bad public policy (see global warming).

Is it a coincidence that Ohio's economy started tanking right after the minimum wage hike?

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Another company flees

From IBD.....

Energy: Another day, another oil company fleeing the country. No, this isn't Ecuador, the banana republic that just defaulted on its debt after chasing out investors. It's the United States, and what we're seeing is self-defense.

Much political hay has been made in Congress about "unpatriotic" corporations that move operations abroad. Weatherford International is the latest, taking its headquarters from Houston to Switzerland. The oil services company said that it wants to be closer to its markets. But what it really meant was that it no longer saw the future in the U.S.

In a political atmosphere of blaming corporations, it's no wonder. Halliburton fled to Dubai in 2007. Tyco International, Foster Wheeler and Transocean International all went to Switzerland. As a pattern emerges, America's global standing diminishes, in part because it's based on the willingness of companies to invest. It's an especially bad sign when domestic companies flee.

"The U.S. is an important market," Weatherford CEO Bernard J. Duroc-Danner told the Houston Chronicle Thursday. But, "it's just a market. It's not the primary market."

How does that sound for a loss of global leadership? If that's not clear enough, try this: "In the hierarchical pecking order, (Houston's) not going to be Rome anymore."

What accounts for this vote of no confidence in the U.S.?

Start with the demonization of oil companies. Executives have been hauled before Congressional star chambers, held up to abuse and ridicule, and then blamed for high oil prices as if they wanted to kill their markets. Rising global demand, nationalizations and Congress' failure to open the country to drilling go ignored.

Huge companies such as Exxon Mobil, whose market cap exceeds the GDP of most countries, create $100 billion in earnings in quarters when oil prices soar. It looks high, but over the years, the industry's average returns, at 9%, are less than other industries.

Nevertheless, Exxon's profits are evidence of its success at extracting oil from miles below the earth's surface, even underwater, and from unbelievably hostile environments, such as the Arctic. Instead of being objects of national pride for their productivity and efficiency, and subjects of heroic Hollywood movies, their success is considered to be dishonest.

Congressional hostility affects oil companies' operations abroad, too: Exxon, remember, noted that Congress' animus toward oil profits directly encouraged Hugo Chavez's uncompensated expropriations of $1 billion of Exxon's assets in Venezuela, which drove oil prices higher.

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Unions seek support from republicans?

It's union busting day here at the blog.

Festering animosity between the United Auto Workers and Southern senators who torpedoed the auto industry bailout bill erupted into full-fledged name calling Friday as union officials accused the lawmakers of trying to break the union on behalf of foreign automakers.

The vitriol had been near the surface for weeks as senators from states that house the transplant automakers' factories criticized the Detroit Three for management miscues and bloated UAW labor costs that lawmakers said make them uncompetitive.

But the UAW stopped biting its tongue after Republicans sank a House-passed bill Thursday night that would have loaned $14 billion to cash-poor General Motors Corp. and Chrysler LLC to keep them out of bankruptcy protection. The Bush administration later stepped in and said it was ready to make money available to the automakers, likely from the $700 billion Wall Street bailout program.

Still, autoworkers remain angry with the senators who tried to negotiate wage and benefit concessions from the union, then scuttled the House-passed bill that would have granted the loans and set up a "car czar" to oversee the nearly insolvent companies and get concessions from the union and creditors. Their top targets were Senate Minority Leader Mitch McConnell, R-Ky.; Sen. Bob Corker, R-Tenn., who led negotiations on a compromise; and Sen. Richard Shelby, R-Ala., who has been a vocal critic of the loans.

Kentucky, Tennessee and Alabama all house auto assembly plants from foreign automakers, and union officials contend the senators want to drive UAW wages down so there would be no reason for workers at the foreign plants to join the union.

So let me make sure I've got this right. You bust your ass to campaign against republicans for the past, say, 25 years, and now you're pissed when they don't step up to the plate for you.

The audacity of audacity.

Where's my copy of Animal Farm?

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Why I hate unions

Mainly due to the Teamsters theft of my father's pension.

But besides that there's things like this.....

A nonprofit organization founded by California's largest union local reported spending nothing on its charitable purpose -- to develop housing for low-income workers -- during at least two of the four years it has been operating, federal records show.

The charity, launched by a scandal-ridden Los Angeles chapter of the Service Employees International Union, had total expenses of about $165,000 for 2005 and 2006, and all of the money went to consulting fees, insurance costs and other overhead, according to its Internal Revenue Service filings.

Anyone have a copy of Animal Farm?

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Happy Holidays

Apparently, the economy is sooooo bad that when people lose their jobs, they can't afford to keep their kids in day care.

I saw this headline today....

Struggling families drop day care

Huh?

After losing her job as an administrative assistant, Josselyn Gorman says she had no choice but to pull her 9-month-old son, Cody, out of full-time day care.

It was a difficult decision, she said, because Cody thrived at Rhymes and Reasons Nursery and Preschool in Farmington Hills. But she and her husband needed that $210 a week for more pressing expenses, such as groceries.

Gorman is now home to take care of her son while she looks for another job.

So let me make sure I've got this right. You lose your job and now have time to take care of your kid at home but yet this is somehow the downside of losing a job?

Am I losing my mind?

First, I've often noted that if people did the numbers they would find that second wage earner doesn't pay when you factor things like day care expense.

For instance, let's assume the lesser wage earner in a family makes $15/hr. The gross pay is $600.00/wk. After tax, this income will be somewhere around $400.00 - $500.00 a week.

Now you are going to $210.00 a week in day care. That leaves you with $200-$300 in take home pay. Not much left to pay for the increased expenses you incur with a second wage earner (things like cars, gasoline, work clothes, etc.).

In my mind, what remains doesn't amount to much in comparison to what you lose, time with your child.

Second, I would think that keeping your kid out of day care would be a positive if you lost your job. You know that whole lemon/lemonade metaphor.

Once again, it's no wonder newspapers are losing money. They can't even come up with a good bleeding heart story.

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Friday funny

The night before X-mas.... redneck style

Microsoft surface

Hey Microsoft, why don't you design a real fancy operating system that doesn't take 17 years to boot up.

But they don't have insurance

Riddle me this Batman.

Allegedly, people without health insurance have no access to health care. If that's the case, how is it that illegal immigrant's health care cost the state of Texas 677 million dollars.

The state of Texas and local hospital districts spent an estimated $677 million to provide health care to illegal immigrants in a year, a new study says.

The survey, issued by the Texas Health and Human Services Commission, said that most of the money — $597 million — was spent by local hospital districts for the immigrants' care during the state's fiscal year that ended on Aug. 31, 2007.

Lawmakers from both parties said they were not surprised by the millions spent and expressed hope that the report, required by the 2007 Legislature, will help prompt Congress to pass comprehensive immigration reform legislation.

State Rep. Garnet Coleman, D-Houston, said the study only tells half of the story.

He noted that the immigrants contribute to government coffers by paying sales and property taxes.

The report said that in the fiscal year ending Aug. 31, 2008, the state spent $80 million under the Texas Emergency Medicaid program, which pays hospitals to provide life-saving care, including labor and delivery services, to patients living here illegally. The state also paid $1.2 million to provide services to undocumented immigrants in family violence shelters.

Federal law requires hospitals and ambulance services to provide care to anyone needing emergency treatment regardless of their citizenship, legal status or ability to pay.

Whoa, whoa, whoa!!!! You mean to tell me if I don't have health insurance, hospitals still have to take care of my emergency!

How is that possible if I don't have health insurance?

One of the things republicans need to do to is start educating the public on the distinction between health insurance and access to health care.

Case in point, everyone in Canada has insurance. Unfortunately, they have little access to actual medical care. In some cases it takes six months for an MRI. Canada's health care has created the only growth industry in Buffalo NY.

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Smells like Team Clinton

This whole Blago/Rezko/Obama drama is staring to smell a lot like like Clinton; except for the stench of fat chicks and cigars.

In the conservative standard bearer, LA Time blog an interesting take on what's going on in Rezko's world right now.

While most of the media's attention focused today on the Chicago news conference of President-elect Barack Obama announcing new Cabinet members and repeating his call for onetime ally Illinois Gov. Rod Blagojevich to resign (see video above), a federal judge made a small, little-noticed legal move on another case.

More on Obama below.

Without explanation, District Judge Amy St. Eve canceled her own deadlines for lawyers to file briefs on the upcoming sentencing of Antoin "Tony" Rezko.

That name should sound familiar, as detailed in a Special Ticket Report the other day; he's the Illinois political fixer, real estate man and fundraiser with close connections to Obama, Blagojevich and other Chicago political clans who is unhappy in solitary and sought to advance his sentencing to Jan. 6 on 16 federal counts of fraud, money laundering and abetting bribery. (Obama was not implicated in that trial.)

Now, why would a judge extend the period before sentencing when the convicted prisoner expressed a desire to get on with prison? Without a new briefs deadline, the expedited Jan. 6 sentencing could now be pushed back further.

Because Rezko, in the hopes of reducing his sentence, is singing in his cell about Blagojevich and maybe others. He's not done with his song repertoire and the feds haven't fully checked out his information to determine how grateful to be in sentence-seeking.

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O'Rourke on bailouts

PJ O'Rourke on another bailout.... Namely the print media....

HELLO? Bailout people? Mr Secretary of the Treasury Hank Paulson? Aren't you forgetting somebody? Like me? I'm a print journalist. Talk about financial meltdown! Print journalists may soon have to send their kids to public schools, feed dry food to their cats and give up their leases on Prius automobiles and get the Hummers that are being offered at such deep discounts these days.

The print journalism industry is taking a beating, circling the drain, running on fumes. Especially running on fumes. You could smell Frank Rich all the way to Nome when Sarah Palin was nominated. Not that print journalism actually emits much in the way of greenhouse gases. We have an itty-bitty carbon footprint. We're earth-friendly. The press run of an average big-city daily newspaper can be made from one tree. Compare that to the global warming hot air produced by talk radio, cable television and Andrew Sullivan.

There are many compelling reasons to save America's print journalism. And I'll think of some while the waiter brings me another drink. In the first place, one out of three American households is dependent on print journalism.* And if you think home foreclosures are disruptive to American society, imagine what would happen if USA Today stopped publishing. Lose your home and you become homeless: a member of an important interest group with many respected advocates and a powerful political lobbying arm. But lose your newspaper and what are you going to do for covers on a cold night while you're sleeping on a park bench? Try blanketing yourself with Matt Drudge to keep warm.

You know, he does make a good point. I can't carry my workstation into the john to read Drudge.

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I guess they'd be Holocaust deniers as well

So if you are one of those "progressive" types who worship at the alter of global warming what do you think of this band of scientists?

The UN global warming conference currently underway in Poland is about to face a serious challenge from over 650 dissenting scientists from around the globe who are criticizing the climate claims made by the UN IPCC and former Vice President Al Gore. Set for release this week, a newly updated U.S. Senate Minority Report features the dissenting voices of over 650 international scientists, many current and former UN IPCC scientists, who have now turned against the UN. The report has added about 250 scientists (and growing) in 2008 to the over 400 scientists who spoke out in 2007. The over 650 dissenting scientists are more than 12 times the number of UN scientists (52) who authored the media hyped IPCC 2007 Summary for Policymakers.

The U.S. Senate report is the latest evidence of the growing groundswell of scientific opposition rising to challenge the UN and Gore. Scientific meetings are now being dominated by a growing number of skeptical scientists. The prestigious International Geological Congress, dubbed the geologists' equivalent of the Olympic Games, was held in Norway in August 2008 and prominently featured the voices and views of scientists skeptical of man-made global warming fears. [See Full report Here: & See: Skeptical scientists overwhelm conference: '2/3 of presenters and question-askers were hostile to, even dismissive of, the UN IPCC' ]

What cracks me up is the people who most like to make fun of Christians for having blind faith in a superior being, are the ones most likely to believe in this malarkey.

What's so "progressive" about non science?

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Why pols are corrupt?

How is that there seems to be an increase in politician corruption?

Matt Towery with a theory...

Too many people are attracted to elective office to satisfy their own egos. They're willing to sacrifice family and personal economic responsibility so that they can regularly get their rear ends kissed. It's sad, but it's true. Believe me.

Some states have gotten smart. Florida has a total ban on gifts and gratuities to its elected officials. That helps. But efforts like these don't eliminate the arrogance and sense of entitlement that make some part-time public officials feel entitled to honor and tribute at every turn.

I would offer this bit of wisdom

Most politicians were the total goobers in high school. They weren't talented enough to be a jock, a musician, a thespian, or an academician, but they hungered for public adulation none the less. In addition, they probably had a nice sprinkling of narcissism thrown in to their own warped personality. So politics became a natural career path for them.

Second, there would be no corruption in politics if these guys had no money to throw around. John Quixote McCain tried to "clean up" campaign finance and all he did was pushed more money into nonaccountable outlets. If the feds had no money, how much money do you think the Obamanator would have raised for his campaign? I'm thinking it would have been materially less than the $750 million he did raise.

I've been around a lot of local politicians, and I can say that most of these guys have the most screwed up lives you could believe. And those are the republicans.

When we quit trusting pols to take care of us and take our money back from them, I'm guessing the corruption will clean itself up.

Until then, Blago will become the standard bearer.

Hilarious

Froma Harrop exclaims that the NY senate seat is not a Kennedy heirloom....

Have New York Democrats lost all self-respect? Their excited talk of whether Caroline Kennedy is "interested" in Hillary Clinton's Senate seat makes you wonder. The late John F. Kennedy's daughter has made at least one feeler phone call to New York Gov. David Paterson. And Uncle Teddy, the Massachusetts senator, is busy pulling the levers to slip her in. The seat will be vacant upon Clinton's confirmation as secretary of state.

This unsavory spectacle has been upstaged by the wild drama in Illinois, where Gov. Rod Blagojevich is being accused of trying to sell Barack Obama's Senate seat. The doings in New York are not blatant corruption, but they are corrosive to our democratic ideals. Lest anyone forget the point of the American Revolution, our representatives are not chosen by hereditary succession, which, to quote Thomas Paine, "is an insult and imposition on posterity."

Are you kidding me? The democratic party is all about heirlooms. Ted Kennedy, the Massachusetts Manatee, has his seat solely as a result of being a Kennedy. Who else could have killed someone in a drunk driving incident and kept their senate seat?

As far as NY goes, did Froma consider that Hilary Clinton, who never spent one year in NY as a resident, leap frogged right over everyone in the state to take that seat.

For some reason the Kennedy's are democratic royalty and the party keeps hauling them around like Cleopatra.

Call me when I quit laughing.

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Call in Gay

So how did that "Call in Gay" campaign turn out yesterday.

Personally, I didn't notice a difference. My lesbian bartender showed up for work and served me my cold ones as she has for years. She thought the whole thing was "stupid".

The gay community has done an excellent job of marginalizing its own community. Maybe now they can have a nationwide gay pride parade where every ding dong with a sexual fetish can show up and make people, sensitive to the gay marriage issue, disgusted.

Next time, don't call in gay unless you want the nation to yawn again.

Article

Cincinnati Bearcats Big East Champs- Orange Bowl

Somethin' for nothin'

Reason #4415 why you should be against bailouts of any kind...

People will intentionally sabotage their lives to get a shot at the trough.

Don't believe me? Read this....

Are homeowners purposely falling behind on their mortgage payments to qualify for cheaper home loans?

Economists, lenders and other housing experts are concerned that programs to bail out troubled homeowners might have an unintended consequence: encouraging people to miss mortgage payments so they can qualify for a handful of programs that ease loan terms.

"It's a problem," says Mark Zandi, chief economist and co-founder of Moody's Economy.com. "A lot of the programs require you to be at some stage of delinquency, so homeowners say, 'What about me?' and they get delinquent in order to get help."

Many mortgage modification programs require that borrowers be 60 to 90 days late on payments to get a mortgage reworked.

Let's say you're busting you ass to make things work to keep you home. Why? Don't get a second job; go buy yourself a hammock and kick back.

That's also true of GM, Citibank, et al.

Seriously, this is why I went from being a bleeding heart liberal to a bleeding heart libertarian. I've personally seen how welfare has destroyed people's souls. I've seen how a bailout does nothing more than enable irresponsibility.

There's more scientific evidence that alcoholics have genetic predisposition to chemical abuse. Should we just feed them all the booze they want because "they were just born that way"? I don't think so. Nor should we bailout assholes who speculated on homes they couldn't pay for. For some people, rock bottom is the only way they learn a lesson.

Think about it. If you refused to pay your mortgage today, you could essentially live in that home for at least two years, rent free, before the bank was able to send you delinquency notices, go to court to get a legal default notice, foreclose and kick you out.

All the while you could be partying it up on that money. Why wouldn't you do it?

A day without gay

I did show up to work today. Does that make me a heterosexual or a closet homosexual?

I guess if you were to get your hair done today you need to reschedule your appointment.

Questions for the people who sponsored this....

Will Barney Frank go to work today?

Is the Logo channel programming today?

Will you cease being critical of us hetero's who still think a fashion statement is a new shipment to Sam's Club?

Is Ellen showing today?

Will Larry Craig, George Michael and Boy George stay out of public restrooms and pick up their hoes the traditional way, in bars?

Will I be able to go to Burnet Woods or Mt. Airy forest today without being hit on?

Are flights still available out of San Francisco?

What happens when no one but hair salons, government offices and art studios notice you're missing?

Back to the future

The producers of Back to the Future might want to consider a redo of the Michal J Fox classic and recast the movie for a more contemporary theme... Political corruption

Think of it the cast members

Rod Blagojevich (governor) as Jim Guy Tucker
Tony Rezko (mutual corrupt friend) as Jim McDougal
Barack Obama (black president) as BJ Clinton (first black president)

Cameo roles by

Rahm Emanuel as Rahm Emanuel
Bill Richardson as Bill Richardson
Hillary Clinton as Hillary Clinton


Who will star as Ken Starr, Monica Lewinsky, Linda Tripp, James Carville, and Janet Reno?

For sale - barely used Senate seat

Over at Craig's List

For Sale/Barter,

Slightly used United States Senate seat. Only one owner this term, though rarely present -- like new. Illinois ties preferred.

Must be willing to barter 1/2 million in monetary compensation, and employment (either government or nonprofit, preferably the latter) for myself and my wife. I'd like to do this for more than recognition. Please don't relegate me to the the "free" postings. This is too valuable for that.

Union friendly, would not like corporate work (like BofA).

Let's make sure we do all negotiations by telephone.

Email for more info.

"Hot" Rod B.
Springfield, IL

Maddux retires

Over the years, my once starving interest in baseball has waned to the point that it's non existent.

None the less, I tip my cap to Greg Maddux as he announced his retirement yesterday. Maddux is probably the last of old fashion ball players who played with more than one dimension in a game loaded with specialists.

I've always said that Maddux started a game with one run in his pocket over his opposite number. His ability to field his position, back up the right base, bunt, hit and run the bases always kept his teams close; even when his pitches weren't all that effective.

I don't disagree with some who believe that Maddux was the beneficiary of a large strike zone.

Regardless, in a day when "chicks dig the long ball", I would watch baseball every day if each team was loaded with players like Maddux.

Congratulations to the future hall of famer. Even Bartman would be proud.

you can take a horse to water....

I remember someone telling me that if you took all the world's wealth and divided it evenly among all the 8 plus billion inhabitants, within ten years the rich and powerful would be the same people it is today.

Here's a little anecdotal evidence of that wisdom....

For fun, Keith Bryce and his wife, Elizabeth, play bingo on Tuesdays at a Knights of Columbus Hall, or watch movies on a mattress in the living room.

It's a long way from the craps tables, flashing lights and plush presidential suites at the swank Las Vegas hotels of their honeymoon.

Since Bryce won the Mega Millions lottery three years ago, he has clashed with family, spent close to $3 million and isn't far from the poorhouse - a place he assumed he'd never visit again.

In the first 30 days after hitting the jackpot - which brought him $3.7 million - Bryce dished out at least $1 million.

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SHOCKER... young families move to the 'burbs

In yet another surprise to no one, the hot growth spot for young families in the Cincinnati Metro area is not in the hot bed of "progressive" life but the neanderthal, knuckle dragging, gun toting area of Liberty Township.

From the Enquirer.....

Young families are increasingly clustering in Cincinnati's northern and eastern suburbs, forming a ring of communities that are among the most family-dominated in the state.

Among them is one fast-growing Butler County community that can safely be called the Family Capital of Ohio: Liberty Township.

According to Census data out today, Liberty Township leads the state and the region in almost every measure of young family life:

First of 110 Ohio communities in average household size (3.19 people).

First in married couples (75.1 percent of households).

First in households with children under 18 (53.8 percent)

Exactly how is it that people keep moving out to those back woods, Christo-fascist suburbs when the city offers all these wonderful "progressive" amenities?

What's so "progressive" about the city exodus?

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Illinois Governor in Federal Custody

By the way, what is that animal on his head?

Default again

Here's a surprise to almost no one.

People who defaulted on their initial mortgages and did "loan modifications" to avoid foreclosure are now back to defaulting on their loans.

Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.

Dugan said based on data collected from some of the biggest U.S. institutions, like Bank of America, Citibank and JPMorgan Chase, home foreclosure starts fell 2.6 percent in the three months ended in September.

However, data which is to be issued by the OCC and the Office of Thrift Supervision (OTS) next week could throw cold water on a push by some U.S. policymakers for loan modifications as the key remedy for the ailing U.S. financial and economic crisis.

Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.

At one time, banks used to have what they called "underwriting standards". Those standards didn't come about arbitrarily. It wasn't like a pack of bankers sat around in a circle, doing bong hits and said, 20 percent down is a good idea. Maybe a borrower's debt to income ratio shouldn't exceed 25 percent.

No. They developed those standards through years of trial and error. Errors they had to eat when they screwed up.

The fact is many people who received credit in this past decade weren't ready to be responsible borrowers. They could modify these loans yet again and guess what? The defaults will be right back to where the are today.

As a society, we keep wanting to believe that all people need is an opportunity and they will succeed. Unfortunately, even Jesus understood that not everyone wants to be healed.

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MWTOTY #4

Vote Democrat

Should we burn her tongue out of her head?

In an act of global warming heresy, Angela Merkel had the audacity to say that jobs were more important than global warming.....

Chancellor Angela Merkel has been keen to promote herself as a tough actor on climate change, but with a new EU climate deal in the making, she's issued a new caveat: It must not jeopardize German jobs.

With the recession tightening its grip on the German economy, Merkel is betting that job reassurance is more important to the average worker than being a pioneer in tackling climate change. On Monday, she vowed to fight any EU climate deal that could jeopardize German jobs.

Speaking ahead of a European Union summit starting Thursday in Brussels, Merkel told the top-selling Bild newspaper: "It must not take decisions that would endanger jobs or investments in Germany."

"I will make sure of that," she added.

How best should we torture Angela for her sacrilege; draw and quarter, cut her tongue out, burning at the stake, stoning....

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Another good deal?

Hey maybe The Messiah will force the banks to do this deal...

The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits.

The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James Follo, the Times Company's chief financial officer.

The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company's portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.

The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company's worsening finances. Analysts have said for months that selling or borrowing against assets would be the company's best option for averting a cash flow problem next year.

Let me educate those not familiar to credit standards. In general, lines of credit are usually extended for seasonal cash needs. For instance, let's say you are a retailer who has to buy inventory in September and October for your Christmas sales season. You would access your line of credit to take advantage of sales discounts and short term cash needs and pay it back when you turned your inventory.

Typically, a bank would want to see a 30 day payout on a line to assure them that the line was used for seasonal needs and not to fund operating losses.

In this case, the Times have tapped out two 400 million dollar lines of credit with no ability to repay them.

Now they want to borrow $225 million more using their real estate as collateral.

If you are a junior credit analyst for a local savings and loan you would probably ask Pinch and the boys this question, "you don't have the cash flow to pay back $800 million on your lines and now you want another $225 miilion? Exactly how do we get paid back?"

But of course, as we know from the previous post, it will be the bank's fault that the NY Times decided to alienate millions of potential customers by reprinting the Communist Manifesto.

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Will someone loan me money for payroll?

Let's do a hypothetical.

Let's assume you loaned me $2,000 last January and I promised to pay you back $2,000 plus interest this December 31st.

You knew I was good for it because I had a good job with with Ford Motor Co.

It's now December, I need to pay you back in a couple of weeks but instead I call you up to say, Hey Joe, look I had a bad year this year, can you loan me another $1,000 and I'll pay you back $3,000 plus interest next December.

Do you do it? Especially knowing that my job at Ford is probably in jeopardy and given that I couldn't pay you back $2,000 when times were "good"?

Well, if you are a worker at Republic Windows and Doors, they'd expect you to do it.

The company, which has been in business since 1965, told employees Wednesday that its main lender, Bank of America, had canceled its line of credit due to a severe downturn in business at the plant.

At the high point of the residential construction market, product sales to home builders totaled $30 million at the company. This year, those sales will total $6 million, said Amy Zimmerman, vice president of sales and marketing. Sales of replacement windows will total $38 million this year, down from $40 million.

"Banks are in the business to make money and at some point they have to make a business decision and that's what this is," Zimmerman said. "Certainly the new construction segment didn't help. If the bank saw some type of light at the end of the tunnel, maybe the bank would have extended a line of credit to Republic."

The United Electrical, Radio and Machine Workers, which represents 260 workers at the factory, is protesting the closing, saying workers were not given the 60 days' notice of a mass layoff as required by federal law, and has been told workers will not receive their vacation pay. The union is directing its ire at Bank of America, not Republic.

So it's the bank's fault that Republic's business sucks? The bank is supposed to loan money to a company who's sales have dropped from $70 million to $44 million? They're supposed to loan a company money to pay out to its employees knowing it won't be paid back?

Of course, The Messiah has the same intuitive business sense of the workers.

“When you have a financial system that is shaky, credit contracts. Businesses large and small start cutting back on their plants and equipment and their workforces. That’s why it’s so important for us to maintain a strong financial system. But it’s also important for us to make sure that the plans and programs that we design aren’t just targeted at maintaining the solvency of banks, but they are designed to get money out the doors and to help people on Main Street.

Yo B. I hate let you in on a secret, but this whole financial mess started because banks loaned money to people who couldn't repay. And now you want them to go back to this system?

This morning, I heard the head of the union tell a reporter "This is not fair, all these employees have worked hard to make this company the success that it's is".

The one time I would have to agree with a union head.

More.....
and here....

IOU

They call it paradise
I don't know why
You call someplace paradise,
kiss it goodbye

From the great "progressive" state of California....

California, the world’s eighth-largest economy, may pay vendors with IOUs for only the second time since the Great Depression, State Finance Director Mike Genest said.

In a letter to legislative leaders Dec. 1, Genest said the state “will begin delaying payments or paying in registered warrants in March” unless an $11.2 billion deficit is closed or reduced. California, which approved its budget less than three months ago, may run out of cash by March, state officials say.

Governor Arnold Schwarzenegger warned that the state may issue the warrants, which are a promise to pay with interest, to suppliers and contractors as the seizure in credit markets may make it too costly to borrow.

“It’s getting worse very quickly,” Schwarzenegger, a 61- year-old Republican, told reporters Dec. 1 after declaring a fiscal emergency and ordering the Legislature into a special session to find ways to close the deficit. “It’s like an avalanche in that it gains momentum. And that’s what we’re in right now, so it’s a real crisis.”

More....

What's so "progressive" about IOU's?

A rousing success?

A nice self serving piece in the WSJ on the incredible success of US drug policy....

Whatever challenges await him, President-elect Barack Obama will not have to reinvent the wheel when it comes to keeping a lid on the use of illegal drugs. Our policy has been a success -- although that success is one of Washington's best kept secrets.

Reported drug use among eighth, 10th and 12th graders has declined for six straight years. Teen use of cocaine, marijuana and inhalants is down significantly, while consumption of methamphetamine and hallucinogens like LSD and Ecstasy has all but collapsed.

The number of workplace tests that are positive for cocaine is down sharply, to the lowest levels on record. Even the sudden spike of meth use -- remember the headlines from just a few years ago? -- has yielded to a combination of state and federal regulations controlling meth ingredients. And abroad, crackdowns in Colombia and Mexico have caused the price of cocaine to roughly double in the past two years.

I guess the four hundred people in Chicago gunned down this year, many as a result of the illegal drug trade, might have a slight disagreement with this clown's assertion.

Or maybe the 1400 plus murders in Juarez Mexico who've been gunned down because the drug prohibition has made the money all the more worth killing for.

The War in Iraq has been a rousing success when compared to our "War on Drugs" and "War on Poverty". When will we demand a cease fire on these wars?

A must watch

Non-Smoking

Barack Obama says you won't catch him lighting up a cigarette in the smoke-free White House.

"There are times where I've fallen off the wagon," the president-elect said when asked in a broadcast interview whether he has kicked the habit.

"I've done a terrific job, under the circumstances, of making myself much healthier," he said. "And I think that you will not see any violations of these rules in the White House," he said on Sunday's "Meet the Press" on NBC.

Obama told the magazine Men's Health in an interview for its November issue that he wished he had more time for staying fit and that he still occasionally smoked a cigarette.

Obama said in that interview that he had bummed a cigarette a couple of times during the campaign. "But I figure, seeing as I'm running for president, I need to cut myself a little slack," he said.

Dec 7, 1941

From the www.unionleader.com:

Today is the 67th anniversary of the Japanese sneak attack on Pearl Harbor. The anniversary may seem remote, but it comes just days after a national commission on the prevention of terrorism issued a chilling report on the likelihood of a new attack on America.

With Europe aflame and Japan already slicing up China and threatening more mayhem in the Far East, would a sleepy America have paid more attention and been better prepared had a U.S. commission warned of a Pearl Harbor-like attack back in the late 1930s?

We doubt it. There were in fact warnings and predictions of Japanese aggression but they fell largely on the deaf ears of an isolated America more intent on its own economic problems.

Today, is it any different? Even with the modern-day Pearl Harbor of Sept. 11, 2001, as a stark example, and with the repeated Islamic extremist warnings and attacks (see India two weeks ago), much of America seemed to yawn at the headline, carried in our own daily paper, "Biological weapons attack is likely in next 5 years.''

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Billary at State

Dick Morris:

"By way of his appointment of Hillary, President-elect Obama has set the stage for a civil war within his administration. The rivalry between the State Department and the National Security Council has always been sharp.

NSC adviser Henry Kissinger dueled with Secretary of State Bill Rogers. NSC adviser Zbigniew Brzezinski battled Secretary of State Cyrus Vance.

The Bush administration was animated by the rivalry between Secretary of State Colin Powell and Donald Rumsfeld at the Pentagon. The conflicts between these two powerful poles in the foreign policy universe have been epic. But now the push-pull between the White House and the State Department is likely to become particularly inflamed.

As long as Obama is riding high, everything will be fine. But should his ratings falter, can anyone doubt that it will be Hillary Clinton to whom worried Democrats will turn in 2012?"

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Steve Kelley

Wonder Life

Jackie Gingrich Cushman:

It’s early December, which in our home means putting up the Christmas tree, white outdoor Christmas lights and pulling out our favorite holiday movies. Inevitably, every year we watch “Rudolph, the Red-Nosed Reindeer” and “White Christmas.” However, my favorite Christmas movie is Frank Capra’s “It’s a Wonderful Life.”

The story begins on Christmas Eve, 1946. Faced with hard times, George Bailey (played by Jimmy Stewart) stands on a bridge overlooking an icy river and contemplates suicide. But when he sees a person in the water struggling to swim, George’s focus on his own life is replaced by his concern and action to save another’s. He jumps into the river, saving the life of what turns out to be an angel, second class, Clarence Odbody.

Many of us might feel a bit like George Bailey this year, financially strapped and not sure how we will make it through the tough times. This often leads to desperate thoughts and can affect our entire outlook on life. A reframing of our thoughts away from monetary and economic matters might help remind us as well that there is much good in life and much to be happy about.

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