Sunday, February 19, 2012
Sitting in the Starbucks on DuPont Circle, Washington, DC, waiting for the TH Daughter to complete her night's sleep in the hotel above. Naturally I have items worthy of some small attention.
The first is a small bit of news, sadly with no documentation. As I walked out of the DuPont Circle Hotel this morning, there was a huge white BMW sedan with big air dams and other accouterments designed to enhance its, well, hugeness. A well-dressed couple were climbing in, obviously having just retrieved it from the valet. The vanity plates said "FEDBIZ." Perhaps jumping to an unfair conclusion, I believe I just saw some serious looters, in the Ayn Rand sense of the word.
Speaking of which, on the math, the United States tax system is substantially more progressive than its European counterparts. We also redistribute less. Which suggests to me, perhaps incorrectly, that looters of the FEDBIZ variety are making off with a fair amount of it.
Which reminds me of a Facebook moment a couple of days ago. A fairly centrist friend of mine posted a picture of the pitted and crumbling underside of a bridge in a northeastern city, prompting a slew of comments from her more statist friends that we really needed to rebuild the nation's infrastructure. I swung the conversation sharply to the right with this observation:
After almost $900 *billion* in allegedly shovel-ready stimulus spending, it is hard to believe that our public infrastructure is not in massively better shape than just three years ago. And if it is not, then I respectfully suggest that our government has become wholly ineffective at maintenance of its public assets. If *that* is true, then more spending without a wholesale restructuring of government operating mechanisms is just sheer waste.Various people did indeed wonder where the money went. Now we know: To Germany to pay for FEDBIZ's car.
On a lighter note, the questions that Thomas Edison asked in job interviews. I'm going to start using some of them.
Two links on the current crappy economy. First, it is different this time. Second, no it isn't. It is, at least by the reckoning of my lifetime, for two reasons. It takes a long time to clean up bad debt, which you need to do before people are ready to get rocking again. But, sadly, our elected and unelected officials have extended that period by various means, primarily to (i) postpone the pain until after the next election, again and again, and (ii) enacted regulatory policies in one industry after another that work against the expansive fiscal and monetary policy.
An interesting article about economic friction and how to think about efficiency when considering the social usefulness of private and equity investors and so forth. The descriptive part is more interesting than the squishy argument at the end about "too much efficiency," to wit:
For an individual company and its shareholders, there is no such thing as too much efficiency. The price of too much efficiency is not paid by the company. It is what economists call a negative externality, paid by the people who lose their jobs and the communities that suffer from job loss. Thus, we can’t expect the free market to find the level of efficiency that keeps firms competitive, provides quality goods at affordable prices and sustains workers and their communities. If we are to find the balance, we must consider stakeholders and not just shareholders. Companies by themselves won’t do this. Sensible regulation might...All very nice, and at this point it will not surprise you that the author is a professor of psychology, rather than an economist. And, indeed, who can object to cherishing the simple things in life like hearth and home and more time with friends? The problem, of course, is hoping that regulation is the path to that future. It is not, and cannot be in our democracy. Why? Because there is no advocate in government for those homespun values. Our government -- which contemplates a country of continental size and almost unbelievable social and economic complexity -- responds to interests. Regulations benefit some people, and hurt others, and those people fight to shape those regulations to help them the most or hurt them less. The constituency for homespun has no seat at the table. Finally, because any regulatory proposal or enacted regime requires vast resources in its development and subsequent compliance, it inherently favors large organizations over small ones. Only big companies can afford to hire Mr. FEDBIZ. Dodd-Frank is a competitive advantage for huge banks compared to small ones. The FDA's new aggressiveness is a competitive barrier for start-ups, and tends to entrench the large multinational device companies. And so on. No, the path to homespun values lies at home, with people choosing to live their lives differently, perhaps by spending far less money and working less hard. Government cannot deliver that, without making us all a lot poorer.
Perhaps we can use the criticism of Bain Capital as an opportunity to bring a little friction back into our lives. One way to do this is to use regulation to rekindle certain social norms that serve to slow us down. For example, if people thought about their homes less as investments and more as places to live, full of the friction of kids, dogs, friends, neighbors and community organizations attached, there might be less speculation with an eye toward house-flipping. And if companies thought of themselves, at least partly, as caretakers of their communities, they might look differently at streamlining their operations.
Finally, just to piss you off, the HuffPo leads with an election year perennial fave, "Intelligence Study Links Low I.Q. To Prejudice, Racism, Conservatism," followed by a picture of the Klan. We note that the authors of the "study" are not only professors, but Canadian professors. TTYL.
A quick Google search on the vanity plate turned up this: http://www.google.com/#hl=en&sclient=psy-ab&q=FEDBIZ&pbx=1&oq=FEDBIZ&aq=f&aqi=g1g-s1g1g-s1&aql=&gs_sm=12&gs_upl=0l0l1l219l0l0l0l0l0l0l0l0ll0l0&bav=on.2,or.r_gc.r_pw.r_qf.,cf.osb&fp=d272a33775ff33c4&biw=1832&bih=915
Lots of ego-centric origins for such a plate, ranging from gummint to "journalism" to horse racing and beyond.
None of which may actually be the motive for the ostentation of such a license plate, made redundant by sticking it on such a car.
Of course, race horses are another form of vanity ostentation, at least for many of the sport's owners. A racehorse named "FedBiz" probably did not get its name from somebody who earned his money in spite of government.
Actually bad debt cleans up quickly if market forces are allowed to work to clear the debt through insolvency.
The S&L crisis of the 1980s was a tremor to the Housing Bubble earthquake of the 2000s. In the S&L crisis the government facilitated the orderly liquidation of the insolvent businesses and disposal of the assets via the RTC, allowing the market to reset.
By contrast, in the present housing bubble the government and the Fed have actively propped up both the insolvent institutions, namely our banks, and the real estate market. The capital generated by the US economy (or more accurately China's economy) is being consumed by force of government to prop up these sectors. Hence the capital is not available to be employed productively by, say, funding start up companies which create jobs.
There is a way out this mess, but this time it is not Lincoln S&L that needs to be liquidated. It is Citibank, Bank of America, Wells Fargo, and perhaps even Goldman. This is not going to happen, so to borrow a phrase from history we will continue to hear the great sucking sound of capital, the lifeblood of any economy, being consumed to cover for an insolvent banking sector.
Correct me if I am wrong, TH, but you have been generally supportive of these policies, both the explicit bailouts from the Treasury and the bailouts from the Fed, have you not?
Anon Attorney's business is insanely busy and 2012 looks like it is going to be a very good year. Keeping my fingers crossed.
Owner of the horse Fed Biz is Kaleem Shah from Bangalore. Apparently the horse just had a big win at Santa Anita and is a favorite for the Kentucky Derby this year, so it looks like we will be hearing more about Fed Biz.
Looks like Shah's major biznez is writing spy software for the feds, and business has been good.
Unfortunately, this is what passes for an entrepreneur today.
It used to be your started a company, made things and sold them to people and made money doing so.
Now you just sell stuff to the federal government.
The country is going to hell in a hand basket.
Short bio of Shah follows:
Born: July 6, 1962, in Bellary, India.
Residence: Vienna, Va.
Family: Family: Wife, Lubi, and daughter Sophie and son Arman.
Education: BS in electrical engineering from Bangalore University, India; MS in computer engineering from Clemson University; MBA in international finance from George Washington University.
Professional Background: After developing software for the Telenet company, he founded CalNet in 1989 and is its president. CalNet handles intelligence analysis, telecommuncations, financial and information technology for its clients, which include the federal government, the armed forces and state governments. It is based in Reston, Va., with a branch office in San Diego.
Racing Background: Loved horses and racing since he was a child, when his father, Majeed, a major trainer in India, won many Group 1 and classic races there, including the Indian Triple Crown with both Bright Hanovar and Our Select. His uncle, Saeed, won two Indian Derbies ... His father kept him away from the races in India, preferring his children to concentrate on their education.
Racing Career: Shah was able to enter the ownership ranks on a small scale in 1996. He raced horses in Maryland with trainer Jimmy Murphy, elsewhere on the East Coast with Dale Capuano and a few horses in California with trainer Doug O'Neill, including stakes-placed Go On Baby ... Met trainer Bob Baffert at the sales, where Baffert began buying horses for him ... Has silks in U.S. red, white and blue colors and often uses "American" and "Patriot" in his horses' names ... Bought May Day Rose for $220,000 at the 2010 Ocala Breeders' Sales Co. June sale of 2-year-olds and horses of racing age. She has won the 2011 Santa Ysabel S. (G3), Railbird S. (G3) and Instant Racing ... Also owns Irrefutable, who finished second in the 2011 Ancient Title S. (G1) and Smile Sprint H. (G2); Smash, who finished second in the 2011 Carry Back S. (G2); Brigand, who finished second in the Hollywood Juvenile Championship S. (G3); and American Story, who finished second in the Milady H. (G2)... Purchased Concord Point after he broke his maiden in late 2009. Concord Point won the 2010 West Virginia Derby (G2) and Iowa Derby (G3), setting a track record in the latter ... Purchased Take Control, a son of Horses of the Year A.P. Indy and Azeri, for $1.9 million at the 2009 Keeneland April 2-year-old sale. The colt was impressive breaking his maiden in early 2010, but developed shin problems. He is back in training at Santa Anita ... Shah's developing runners include the promising 2-year-old Fed Biz, a son of Giant's Causeway-Spunoutacontrol, by Wild Again, who cost $950,000 at the 2010 Keeneland yearling sale.
Breeding/Racing Operation: Has about 30 horses in training, mostly with Bob Baffert on the West Coast but also with Dale Capuano in the East ... Owns about 10 broodmares, which he keeps at Hill 'N' Dale Farms in Kentucky and Magali Farms in California ... Breeds several of his mares to Concord Point, who is now at stud at Hill 'N' Dale.
Some more about CalNet:
CALNET, Inc. is one of the fastest growing privately held companies in the Intelligence Analysis, Language Services, and IT consulting services arena. Headquartered in Reston, VA, CALNET, Inc. provides world-wide services in CONUS and OCONUS to include Afghanistan, Iraq, Guantanamo Bay, and Korea. CALNET, Inc.'s success as a company depends solely upon providing our clients with the people and solutions they need in a timely and cost effective manner. Our value proposition is based on the talent and experience that CALNET, Inc. and partners bring forward to every engagement. Our company slogan: "Partnership for Success" signifies our commitment to win customers one project at a time.
CALNET, Inc. delivers high quality linguists with clearances as required for the job to include Secret, Top Secret and Top Secret / SCI / Full Scope Polygraph any place in the world. Our interpreters provide a variety of linguistic services in many languages to include Arabic, Chinese, Dari,Farsi, Hindi, Kurdish, Malay, Nurastani, Pashto, Turkoman, Uguyr, Urdu, and more than a dozen other languages. Our interpreters are experienced in supporting U.S Armed Forces missions.
CALNET, Inc. interpreters are technically qualified and experienced native-speaking language specialists with interpretation and translation experience. All interpreters are interviewed and tested for their specific bilingual or multilingual skills and experience in simultaneous and/or consecutive interpretation.
CALNET, Inc.’s interpretation experience is extensive. CALNET, Inc. has been providing interpreter and translation support to the U.S. Armed Forces and the Intelligence Community.
So the next time we target the wrong village you can bet CalNet had a finger in it.
Of course then there is this group of weasels who are selling subscriptions to a "service" advising small business on how to fleece the government via SBA's: