Madoff Matters

I'm still thinking (as are we all) about Bernie Madoff and the New Year recession. Over at the Daily Beast, an artist conveys what it's like to go from riches to rags over night. I link to it mostly because of the appalling comments it generated.

As the author tells it, she scrimped, saved, and worked her way to a schmancy NY apartment, a vacation cottage in Palm Beach, fancy truffles, and real pearls, refusing even to take alimony post-divorce! Yet, oh so predictably, readers crap all over her. Why? Even if she'd inherited all her money and spent her days in a heroin haze, does that make it all right to steal her money, then vilify her? She was victimized! And the readers victimize her again.

There's a lot of petty emotion from readers too obvious to bear discussion, but these are comments we really need to talk about.

Land of the Free

LAND OF THE FREE....Juan Gómez, American citizen, would like to be able to return to his country after an overseas trip the same way every other American citizen does: by showing his passport and walking in. Unfortunately, Juan Gómez is in TSA hell:

Time and time again, I've been cleared for entry into the United States. So why does my name remain on the list? Will I have to go through this for the rest of my life? In desperation, I always ask airport-security officers how my name can be removed. I've heard it all, from writing to my congressman (as if that would do any good) to filling out a form (never mind that no one has been able to produce the document or tell me where I can find it). The most honest answer came from a young, Afghan American officer at Dulles a couple of weeks ago: "There's absolutely nothing you can do."

Welcome to America, Juan.

Everyone here was stunned to read the news a couple of days ago that Al Meyerhoff, a fighting lawyer who among other things exposed the Saipan scam (whereby American manufacturers have products made in sweatshops in the U.S. protectorate, then slap a "Made in USA" label on them--legally), has died at age 61. Al served for a few years on MoJo's board; he was a memorable presence, expounding in his booming voice—and, later, via the emails that regularly showed up in our inboxes, and no doubt a few thousand others—on this or that corporate or political outrage. He once told a student magazine that he'd developed his "active dislike of the abuse of power" from having been bullied as a kid. Those bullies messed with the wrong guy. We'll miss him a lot.

*Modern Architecture

MODERN ARCHITECTURE....The Los Angeles Times asked eight local worthies to choose the ten all-time best houses in Southern California. The results: nine out of ten houses are in Los Angeles and ten out of ten were built more than 40 years ago. Discuss.

President Bush to Sink Another Election Bid?

He already sunk McCain. With numbers as bad as the ones below, I have to believe he'll sink his brother, too. Which, of course, is a good thing for dynasty haters. And Americans who don't want to lose their sanity.

From a new CNN poll:

Thinking about the following characteristics and qualities, please say whether you think it applies or doesn't apply to George W. Bush:
Is a strong and decisive leader: Yes 45%, No 55%
Cares about people like you: Yes 37%, No 62%
Brought the kind of change the country needed: Yes 13%, No 86%
Is honest and trustworthy: Yes 37%, No 62%
Managed the government effectively: Yes 25%, No 75%
Is a person you admire: Yes 27%, No 72%
Shares your values: Yes 34%, No 65%
Generally agrees with you on issues you care about: Yes 34%, No 66%
Inspires confidence: Yes 20%, No 80%
Has united the country and not divide it: Yes 17%, No 82%
Was tough enough for the job: Yes 49%, No 51%
Can get things done: Yes 31%, No 69%

A full 75 percent say they are glad President Bush will be leaving Washington. And Jeb thinks Florida will send him there?

Nightmare on Main Street

NIGHTMARE ON MAIN STREET....From the Wall Street Journal, this is as gruesome a statistic as I've seen yet:

Corporate-turnaround experts and bankruptcy lawyers are predicting a wave of retailer bankruptcies early next year, after being contacted by big and small retailers either preparing to file for Chapter 11 bankruptcy protection or scrambling to avoid that fate.

....AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010....Recent changes in the bankruptcy code make it more difficult for retailers to emerge from bankruptcy reorganization....Lawrence Gottlieb, a New York bankruptcy attorney at Cooley Godward Kronish LLP says that only two retailers have successfully emerged from bankruptcy proceedings since the amendments to the code were passed.

A quarter of all major retailers may be in either Chapter 11 or liquidation next year? Holy cow.

The Student Loan Mess

THE STUDENT LOAN MESS....The student loan market is a mess, and it's mainly a mess because the federal student loan program is woefully inadequate. Natalie Hickey learned the hard way:

Hickey got caught in an increasingly common trap in the nation's $85-billion student loan market. She borrowed heavily, presuming that all her debt was part of the federal student loan program.

But most of the money she borrowed was actually in private loans, the fastest-growing segment of the student loan market....Whereas federally guaranteed loans have fixed interest rates, currently either 6% or 6.8%, private loans are more like credit card debt. Interest rates aren't fixed and often run 15% or more, not counting fees.

....Hickey ended up with $20,000 in low-interest federally guaranteed loans issued by Sallie Mae, and $120,000 in higher-interest private loans issued by Sallie Mae. Hickey said no one explained the difference to her.

There's really no excuse for this. At the very least disclosure practices need to be tightened up, but what really needs to happen is a substantial increase in the current limit for federal student loans. It's not even close to the amount needed to get through school these days.

What's more, there's really no reason that the feds should be guaranteeing private loans instead of just originating the loans themselves anyway. Bank origination may have been the only practical option 40 years ago, but that ceased to be the case long ago, and the private student loan market has since become a cesspool of graft, corruption, and abusive practices. Today, federal origination is cheaper and more efficient for both taxpayers and students, and there's really no reason why the Direct Loan Program shouldn't be expanded to the point of putting the private market out of business.

Brief recap. Chip Saltsman, a Tennessee Republican who is seeking the chairmanship of the Republican National Committee, sent a CD of holiday music to committee members earlier this month. That CD contained a Rush Limbaugh song titled "Barack the Magic Negro." (Listen here.) The song is sung by a white political humorist who tries to impersonate the voice of Reverend Al Sharpton. As Sharpton, the singer complains about Obama being palatable to white people "because he's not from da hood."

Saltsman defended the song, saying it is a "light-hearted political parod[y]." That got me thinking. Has any Republican criticized Saltsman for distributing the song? Here's Mike Allen of Politico, who is stunned to the find the answer is "no."

WHY HAS IT BEEN 18 HOURS SINCE THIS WAS POSTED AND NOT A SINGLE REPUBLICAN OFFICIAL HAS CONDEMNED IT? YOUNG PEOPLE IN THE PARTY FIND IT DISGUSTING/ASTONISHING AND CALLED THE LINK TO OUR ATTENTION AS A 'YA CAN'T MAKE IT UP.'

What's the motivation here? It's not that all Republican officials are racist, of course. I think it has something to do with the fact that conservatives by and large hate political correctness and hate being told by liberals that they stepped over the lines of polite discourse. I've frequently objected to an insensitive joke, only to be admonished, "Lighten up, it's supposed to be funny." Because, obviously, the fact that there is humorous intent makes the racism/sexism/homophobia okay.

The first Republican official who condemns Saltsman will be the first to bend to the will of the liberal PC Nazis (i.e. the biggest wimp). And I think that's why we aren't seeing people speaking out, including the African-American candidates in the race for the RNC chair. If this little episode has enough steam to stick around until after the holidays, top GOPers won't be able to ignore it any longer. They'll have to make a difficult choice. Sticking to their misguided principles will mean a third week of bad press for the Party.

Update: Conservatives are starting to find their voice(s).

Passive Houses

PASSIVE HOUSES....I've wondered vaguely for a while why you couldn't build a house that was basically vacuum sealed and thus needed almost nothing in the way of heating and cooling. But it turns out you can, and ground zero for research into "passive houses" is the Passivhaus Institut in Darmstadt, Germany, where I spent a couple of nights just a few months ago. The New York Times reports:

The concept of the passive house, pioneered in this city of 140,000 outside Frankfurt, approaches the challenge from a different angle. Using ultrathick insulation and complex doors and windows, the architect engineers a home encased in an airtight shell, so that barely any heat escapes and barely any cold seeps in. That means a passive house can be warmed not only by the sun, but also by the heat from appliances and even from occupants' bodies.

....Decades ago, attempts at creating sealed solar-heated homes failed, because of stagnant air and mold. But new passive houses use an ingenious central ventilation system. The warm air going out passes side by side with clean, cold air coming in, exchanging heat with 90 percent efficiency.

....In Germany the added construction costs of passive houses are modest and, because of their growing popularity and an ever larger array of attractive off-the-shelf components, are shrinking.

But the sophisticated windows and heat-exchange ventilation systems needed to make passive houses work properly are not readily available in the United States. So the construction of passive houses in the United States, at least initially, is likely to entail a higher price differential.

Interesting stuff. Old news to some, but new to me, and probably new to a few of you as well. More passive houses, please.

Redefining Hard Power

Errr, just click the link.