Ring of Thieves

What do you get when the New York Yankees, the Dallas Cowboys and Goldman Sachs work together?  You get screwed, that's what:

In the more desirable seats at Yankee Stadium, an already pricey $10.50 draft beer will run you an eye-popping $12.60 thanks to an involuntary 20 percent "service fee" tacked on to the original price. If the sticker shock doesn’t make that brew bitter enough, consider this: Despite what you might expect, that extra $2 and change isn't going to the hustling server who sold it to you, according to a new lawsuit.
Legends Hospitality, the concessionaire co-owned by the New York Yankees, the Dallas Cowboys, and Goldman Sachs, allegedly pockets the 20 percent service fee attached to food and drink in violation of New York law, according to a class-action lawsuit filed against the company by three Yankee Stadium servers this week. If certified as class action, the suit could involve more than a hundred servers and hundreds of thousands of dollars in claims.
At the center of the dispute is how hot dogs, sodas and other ballpark fare are served in the stadium's field-level seats, which typically cost between $100 and $350 a game. At field level, fans don't have to fetch their food and drink; they instead can place orders with servers carrying credit-card machines and get the orders ferried to their seats by food-and-drink runners.
Under this arrangement, the servers act a lot like salespeople. "They schmooze the customers, and they're trained to upsell, just like any other waitress," says the plaintiffs' lawyer, Brian Schaffer. "If somebody says, 'I want a hot dog,' they say, 'But wouldn’t you like a cold beer with that?'"
According to the suit, the menus field-level spectators find in their cupholders include this disclaimer: "A 20% service charge will be added to the listed prices. Additional gratuity is at your discretion." That phrase "additional gratuity" would seem to imply that the 20 percent is, in fact, a gratuity, but Schaffer says his clients don’t get that money. Instead, they receive a far more modest commission, between four and six percent, of their total sales for the game.

Stay classy, assholes.  It is way too appropriate that these three entities are working together in this deal.  All of them are pretentious jerkass operations used to making money hand over fist, and yet they can't get enough.  Not that I can feel too bad for the people in the expensive seats, but jeez, why jack it up 20% more?

Update: I think these three make up the sports and finance Axis of Evil.

Naked Capitalism Link of the Day

From Friday: The People vs. Goldman Sachs, by Matt Taibbi:

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.
Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.

It is a very interesting read, although Taibbi is known to go to some extremes (even though I agree with him, some people think the vampire squid is an overstatement).  It is clear that Goldman knew they were selling shit to their clients, and yet they sold them anyway.  Somebody should go to jail.

Naked Capitalism Link of the Day

Today's link: Brokerage rip-off datapoint of the day, by Felix Salmon:

A lot of people have signed up for Wikinvest and handed over access to their brokerage accounts. I spoke briefly to SigFig founder Parker Conrad, who explained that it’s incredibly easy to flick through those accounts and come up with examples like the one he pulled up, of a man with $2.3 million in his Merrill Lynch account.
This guy probably knows that he’s paying his Merrill broker an annual management fee of 1.75%, which alone is more than $40,000 a year. But he doesn’t know that other Merrill clients in his position are paying far less — that Merrill brokers basically charge as much as they can, and the average Merrill client on Wikinvest pays less than half that, just 85 basis points.
And there are other things this guy doesn’t know, as well, because they’re buried in his statements — things like the fact that Merrill charged him $5,763 to make 24 trades last year, over and above that $40,000 management fee. That’s about $240 per trade.
Other fees are even higher. The Merrill broker bought something called the Fidelity Advisor International Capital Appreciation Fund, which charges 1.45% per year on top of a 5.75% fee payable when you buy the thing in the first place. The fund is substantially identical to the Fidelity International Capital Appreciation Fund, which has a 1% management fee and no front-loading at all. Why would any advisor with his client’s best interests at heart put that client into FCPAX rather than FIVFX? He wouldn’t — FCPAX is simply a vehicle invented by Fidelity for advisors which allows them to skim off hefty commissions.

Wall Street is full of crooks.  They should be taxed much more than they are.  They are ridiculously paid thieves and contribute nothing of value to society.

The Long View

From Economic Principals.  First, expectations of the future:

Some of what is going to happen over the next ten years is obvious. Global warming is going to be affirmed by experience. Human embryonic stem cell research will go forward, despite challenges in the courts.
Some is only slightly less obvious.  Social Security will be restored to actuarial balance through a mix of mild tax increases and benefit cuts.  Medicare will be preserved and, perhaps, extended through a second health-care statute.  The 15-member Independent Payment Advisory Board, established by the Affordable Care Act, will gradually morph into a Health Care Fed, a geographically decentralized organization with provider input engineered into the system at every level.
The harder problems that will become apparent in the next ten years have to do with the inequality that is growing all around the world.

Then, what he expects is the answer for economic inequality:

I belong to a luncheon club whose smartest member is a longtime investment manager whom I have observed for many years, He walked out of the room after a global tour d’horizon talk the other day and said on the sidewalk in front of the building, “The only things that can possibly address inequality of a magnitude that will soon be judged to be unacceptable in this country are much higher levels of taxation on the well-to-do and a negative income tax for the poor.”  I hadn’t heard it put so simply or succinctly before, but in the circumstances I was convinced instantly that he was right.
A “negative income tax” is a euphemism designed forty years ago to avoid what otherwise might have been called a “guaranteed annual wage,” when even Milton Friedman endorsed the idea.  Call it a “disability benefit” if you prefer.  We’ve learned a fair amount since then about how to entice workers to take low-paying jobs through earned income tax credits.
Some income floor beneath which citizens are not permitted to fall is the next frontier of social policy. Universal health care was the most recent skirmish in an ongoing campaign. The US will do fine in its economic competition with the newly industrializing world as long as its social fabric doesn’t become irreparably frayed. This is the world for which we are heading, and the sensible thing to do is to prepare for it.

It amazes me that Republicans are pushing for greater inequality, and Democrats can't adequately arouse voter concern about Republican policies.  It further amazes me that people I know who are not well-to-do are actively cheering for the rich and against the government and any sane progressive tax policy.  I had a guy on Facebook tell me that increasing dividend taxes is just theft by the government.  I'm certain that I make much more in dividends (and overall income) than he does, yet he is fighting to lower my taxes, while I want them to go up for the good of the country as a whole.  At this point, I am resigned to the fact that future policy may be terrible for the country, but I may benefit greatly.  I hope that isn't the case, but about 40-45% of the middle class seems to be working for their own destruction, just to spite brown people who are even poorer.  Dumbasses.

Market Failures-Pharmaceutical Example

Washington Post, via the nc links:

Doctors, hospitals and federal regulators are struggling to cope with an unprecedented surge in drug shortages in the United States that is endangering cancer patients, heart attack victims, accident survivors and a host of other ill people.
A record 211 medications became scarce in 2010 — triple the number in 2006 — and at least 89 new shortages have been recorded through the end of March, putting the nation on track for far more scarcities.
The paucities are forcing some medical centers to ration drugs — including one urgently needed by leukemia patients — postpone surgeries and other care, and scramble for substitutes, often resorting to alternatives that may be less effective, have more side effects and boost the risk for overdoses and other sometimes-fatal errors.
“It’s a crisis,” said Erin R. Fox, manager of the drug information service at the University of Utah, who monitors drug shortages for the American Society of Health-System Pharmacists. “Patients are at risk.”
The causes vary from drug to drug, but experts cite a confluence of factors: Consolidation in the pharmaceutical industry has left only a few manufacturers for many older, less profitable products, meaning that when raw material runs short, equipment breaks down or government regulators crack down, the snags can quickly spiral into shortages.
“It seems like there were a lot of things happening with consolidations and quality issues and more things coming from overseas,” said Allen J. Vaida, executive director of the Institute for Safe Medicine Practices, a nonprofit group that helped organize a conference last fall to examine the issue. “It just reached a point where the number of shortages was slowly going up and up, and now we have a national crisis with this huge shortage of critical medications.”
While the dearth that has garnered the most public attention is — ironically — for a barbiturate that is hindering prisons trying to execute inmates, the scarcities are having a much broader impact on keeping people alive, especially in emergency rooms, oncology wards and intensive care units.

I think there are several things to note here.  These are lower-profit products, so the companies don't have much interest in manufacturing them.  It is much more profitable to make sure a 70-year-old can get a hard on than it is to provide a drug to treat for leukemia.  Secondly, reliance on overseas production is both an issue as far as quality control, and tax avoidance.  Pharmaceutical companies were among the biggest gainers from the last overseas profit corporate tax holiday, which caused them to increase overseas production in expectation that it would happen again.  Off the Charts blog was featured among nc's links yesterday explaining why another corporate tax holiday would be a bad idea:

A similar tax holiday enacted in 2004 proved to be a complete policy failure. Its backers claimed that firms would use the repatriated earnings to invest in U.S. jobs and economic growth.  Instead, they mostly used the money for purposes that the tax-holiday legislation had sought to prohibit, such as repurchasing their own stock and paying bigger dividends to their shareholders.  Moreover, many firms actually laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders.  To cite just two examples, Pfizer — which repatriated around $37 billion in foreign profits, the most of any firm — eliminated around 10,000 American jobs in 2005, while Merck repatriated $15.9 billion and announced layoffs of 7,000 workers in 2005.  (These layoffs cannot be attributed to general economic weakness: they came at a time when the U.S. economy was growing significantly and adding jobs.)

Repeating the tax holiday would increase incentives to shift income overseas. Many companies responded to the 2004 holiday by shifting even more profits overseas. If Congress enacts a second tax holiday, rational corporate executives will conclude that more tax holidays are likely in the future.  That will make them even more inclined to invest abroad and less likely to invest in the United States.  That’s why Congress, in enacting the 2004 tax holiday, explicitly warned that it should be a one-time-only event.  It’s hard to see how the 14 million Americans who are out of work would benefit from having their government provide another enticement for companies to invest overseas.

I would directly attribute the Pfizer and Merck cuts in the U.S. to taking advantage of overseas tax shelters in places such as Ireland, Bermuda and the Cayman Islands in anticipation of future opportunities to repatriate overseas profits in another tax holiday.  Shareholder "rights" have become too cherished in our economy versus the good of society.  This is just one further example.  A major reordering in our society is overdue.

Conservatives, Katrina and Alabama

I was listening to All Things Considered and heard parts of a story from Alabama.  Here is the summary:

The death toll from this week's tornadoes has topped 340 — and 28 of them came from one small Alabama town. Very little of Rainsville, population 5,000, remains. And yet, survivors continue the difficult task of picking up the pieces. One family, the Hamiltons, struggles to figure out what to do next.

It was heart-wrenching hearing about how they lost everything.  The lady said they needed a trailer or RV sent down to live in while they rebuilt, because they couldn't stay with friends forever.  That reminded me of this email, which my boss received from one of our wingnuttier clients a few years ago.  It claims North Dakota had a major blizzard and the people there didn't need government money or assistance like the folks from New Orleans.  According to Snopes.com, this email has circulated around a number of times, with Muskegon, Michigan, Cedar Rapids, Iowa and Colorado as the supposed site of the disaster.  Of course they are places with primarily white populations, unlike New Orleans.  Also, in all the cases except for Cedar Rapids, the people's homes weren't destroyed. Also, Snopes (that damn liberal site, the same client sent us an email saying Snopes was liberal, and couldn't be trusted because they used FACTS) pointed out that the National Guard was called out to deal with the blizzard in North Dakota.  I am curious if the same racists who circulated this email will reconsider, now that a large number of white folks are now homeless and in need of help.  I doubt it.

Of course, a tornado is much different than a major flood/hurricane, as private homeowner's insurance covers tornados, but government-subsidized insurance covers floods. Regardless, white bigot conservatives will most likely continue to insinuate that white people don't need government help, but useless, lazy blacks are the only people who benefit from government spending. I do not agree with any of those descriptions above, I am just trying to summarize what I hear when conservatives talk about government.

City Council Befuddled By Request to Rename Street for Negro

First off, my use of Negro is in no way intended to be insulting or offensive to African-Americans.  It is expressly intended to be insulting to the members of the Troy, Ohio City Council.  Council rejected adding a secondary name to a street in Troy to honor early Troy civil rights activist Lucille Wheat.  Here is the story:

A city council committee on Thursday unanimously declined to recommend council authorize adding a secondary name for Elm Street. The action effectively rejects a request by Wheat's son, Sidney Wheat, to rename the 2-1/2 block section of South Elm Street between West Main Street and McKaig Road for his mother.

Lucille Wheat is recognized as a key civil rights figure in Troy during the 1950s through the early 1980s. She founded and chaired the Troy Community Action Committee, headed the Troy NAACP in 1966 and co-authored with Lois Davies a seminal book on race relations Troy title, "Some Self-Evident Truths."

Sidney Wheat made the request in January to Troy mayor Michael L. Beamish, saying it was a way to recognize Lucille Wheat for her efforts. The Wheat's family home was located on South Elm Street, near the corner of West Main Street.

In early February, Beamish made an alternate suggestion: adding an secondary name in honor of Dr. Martin Luther King Jr. to the entire stretch of Elm Street from McKaig Road to the northern city limits. The Buildings, Streets and Sidewalks Committee agreed and made a positive recommendation on Beamish's alternate suggestion.

But in the face of questions from Wheat and others, the item was pulled from the Feb. 7 council agenda and sent back to committee, where it has languished until Thursday. Committee chairman Jarrod Harrah blamed scheduling conflicts for the three-month delay in bringing the item back to committee.

Thursday, Harrah and fellow committee members Bobby Phillips and Tom Kendall said they could not back naming South Elm Street for either King or Wheat.

Harrah said streets are usually reserved for persons of note and also said developers of residential areas name the streets. He also suggested renaming a street was insufficient to honor Wheat and that a plaque, perhaps on the commercial building that now occupies the site of the former Wheat home, should be added instead.

"I just don't think a street does her justice," Harrah said.

Phillips noted that Wheat has already been enshrined in the Troy Hall of Fame (in 1984). "I question how many awards a person should have," he said.

Kendall said he has "never been a big proponent of renaming streets," at least partly because it could potentially open the city up to receiving a flood of similar requests.

"At this point, I think we should leave it as it is," Kendall said.

Wheat, 73, a life-long Troy resident, appeared at the meeting with his wife and expressed disappointment in the committee's position.

I have to agree with Mr. Wheat's quote at the end of the story:

"I had hoped for a better outcome, and more sincerity, than I'm hearing," Wheat said

I was not familiar with Ms. Wheat's work in Troy prior to this newspaper article.  I will look for her book at the library when I get a chance.  Apparently, she rubbed some people in Troy the wrong way.  I find it entertaining that instead of honoring a local person, the mayor suggested naming a street after Martin Luther King.  It is also entertaining that they took two months to review and rewrite the city's street naming policy, but they failed to come up with any worthwhile excuses for why they would reject the street renaming request.  This wasn't a case where the street name would change and force people to change their address, it was for adding a secondary sign with Ms. Wheat's name on it.  In neighboring Tipp City, they added a secondary sign to honor George W. Bush because his bus went down the street on the way to giving a political speech at an invitation-only event at the high school.

The changes in the street renaming policy:

After a line-by-line review of the new policy, which included several new sections, the committee made several minor changes.

New to the policy is a section saying that consideration for renaming will not be given to anyone who has already been recognized with an honor or award. Another addition to the policy states that individuals or groups requesting the renaming "shall bear all renaming costs."

Both of those issues were cited by committee members Thursday as factors in rejecting Wheat's request.

I tell you what, if the city is concerned about the cost of the signs, I will pay for them.

It is notable that the portion of street for which the secondary name was requested is in the historically black portion of Troy.  South Elm Street and North Elm Street were referred to as Slabtown and Hollywood.  I don't remember which portion was which, I only remember being told those were the names by my grandparents.  Anyway, I thought a city council in a city which has historical markers seemingly every 20 feet in honor of Clayton Bruckner and the WACO Aircraft Company would be interested in honoring a local civil rights activist.  I would assume that Clayton Bruckner didn't make certain white folks uncomfortable about their latent racism when he was alive.

In a side note, WACO went out of business in 1947, but the city is proud of their association with the company.  The company made some very neat aircraft in the 20's and 30's prior to making the "flying coffin" gliders used in airborne operations in WWII in Sicily, in Normandy and in Operation Market Garden.  As a veteran of the Airborne in World War II told me, "We lost a lot of good boys in those gliders."  He had no fond memories of the gliders.

Update:  I would also like to propose renaming Dye Mill Road in the vicinity of the city wastewater treatment plant after the Mayor and Council.  That area generally smells the same as this Council decision.  I will also pay for those signs.

Kasich Goes Off Again, This Time At Obama

Governor Kasich blew off at President Obama for criticizing the Governor's assault on public-sector unions:

President Obama told Cleveland TV Station WKYC he disapproves of new laws restricting public employee unions in Ohio and Wisconsin. The president said states should not use the financial crisis as an excuse to erode bargaining rights. Governor Kasich responded this way:
Kasich:  “The President of the United States has I think...a 13 trillion dollar debt. Why doesn’t he do his job? When he does his job and gets our budget balanced and starts to prepare a future for our children, then maybe he can have an opinion about what’s going on in Ohio.”
Ohio Democratic Party Chief Chris Redfern said Kasich needs to remember it was Republicans who were in charge when wall street fell. Here’s what Redfern said when he was asked whether he thought Kasich was trying to set himself up for a presidential run of his own.
Redfern:  “Well, I can only hope for a Donald Trump, John Kasich ticket. One fellow has already clearly lost it and the other is on his way to losing it”

I wish I could get the audio to work, because you have to hear it to appreciate how big of a dick Kasich sounds like.  Personally, the last time I checked, the President is allowed to say what he thinks under the First Amendment of the U.S. Constitution, even if said speech criticizes John Kasich.  Also, I think the President is well-aware of the debt issue.  Mr. Kasich might want to know that the debt is currently $14.3 trillion, of which $10.6 trillion was on the books before Obama got there.  But then again, John Kasich doesn't seem to care about facts.  Also, Governor Kasich, where were you during the Bush administration with your campaign for a federal balanced budget.  I think that is a brilliant way to tank the economy when consumers and businesses are currently net savers.  If I were the president, I would also mention that tax cuts for wealthy people and spending cuts for state and local governments are bad for the future, but I'm not the president, and thank God I'm not John Kasich. 

Why People In Flyover Country Hate The Coastal Elites

Felix Salmon has a very long post about a restaurant squabble in Chef's Table at Brooklyn Fare.  One customer/reviewer got yelled at by the chef, which ruined his wife's experience of the 20-course meal.  After the man wrote up a review in which he described the incident, another restaurant critic made some snooty comments about the first guest.

Mr. Salmon jumps in and points out the chef is a paranoid nut who watched too many reruns of the Seinfeld Soup Nazi episode (ok, I made up the part about Seinfeld, it just seemed appropriate).  He goes on to point out the obvious, that $165 per person for a meal, not including tips or drinks, is absurdly expensive, no matter how wonderful the multitude of courses.  That is one reason why people in the middle of the country resent the coasts.  How can 3 different reporters argue about the rude behavior of a chef who is bringing in that kind of revenue every night, while barely acknowledging how few people in this country could possibly afford such a luxury?  That it is taken by many as a status symbol more than anything else rubs me the wrong way.  Hell, what percentage of New Yorkers could possibly afford such a meal, let alone Ohioans?

Last night, I went in to the nicest restaurant in town, and had a delicious $12.95 8-oz. Prime Rib Dinner with two sides, along with $2 Guinness drafts.  Even with a tab in the $20 range, I felt like I was spending a little too much, given the state of the economy.  I can't imagine dropping over $200 to drink shots of strange food mixes and eat little cup-fulls of stuff I can't identify.  Get off of your high horses you snooty bastards, and come hang with us low people in our dive bars.  Then, you can feel like you are living on the edge, and we'll be able to verify that you are douchebags who make way too much money doing way too little productive human activity.

Investors Win Big In Arbitration Case Against Citigroup

From the NYT (also from NC links):

The investors who prevailed here are Gerald D. Hosier, 69, a wildly successful intellectual-property lawyer, and Jerry Murdock Jr., 52, a prosperous venture capitalist. Mr. Hosier and a trust he set up for his adult children received $48 million. Mr. Murdock got about $6 million.
The men, neighbors in Aspen, Colo., suffered $27 million in out-of-pocket losses on their investments. The big clunker was a municipal bond arbitrage strategy that their Smith Barney broker had characterized as safe, according to the men’s complaint. The deal was supposedly designed to eke out more income than a simple portfolio of bonds would generate.
Not only did the men recover all their losses in the award, they also received damages. Mr. Hosier was awarded $15 million in punitive damages and $6.3 million in market-adjusted damages. The arbitrators also awarded $3 million for the men’s legal fees.

My favorite part, the part which should be pasted on billboards throughout the country:

In an interview, Mr. Hosier said the experience had opened his eyes to the disturbing ways of Wall Street.
“Instead of the financial world being the lubricant for business, they are out there manufacturing products with no utility whatsoever except for generating fees,” he said. “Somebody’s got to do something about Wall Street. It is destroying the country.”

Well, Republicans and Wall Street whores like Chuck Schumer, Larry Summers and Tim Geithner aren't going to do anything about Wall Street destroying the country.

The Goldman Sachs Employee Guide

From Bloomberg:

 To help outsiders understand what makes Goldman so great, we've categorized these employee requirements into easy-to-remember axioms. Rule 1: Don't Ever Make Us Look Bad. "No matter what you are communicating to the public, your words reflect on the reputation of the firm. ... The firm, therefore, requires that your communication reflect the high standards of the firm, not only in what you say, but also in the way you say it."
Rule 2: Talk Slowly to Stupid People. "The level of detail or explanation necessary to make a communication clear, accurate, and understandable will depend, in part, on the breadth and sophistication of the intended audience. ... The lack of financial sophistication of the recipient will often warrant a more detailed presentation."
Rule 3: You May Be Barbarians, But Please Keep It to Yourselves. "Of course, your communications should never contain obscene, offensive, or otherwise inappropriate, unprofessional, or unlawful language. Remember, that you do not control and you cannot always predict who the reader will be."
Rule 4: We Only Trust You With Things We Don't Care About. "Casual correspondence, thank you notes, confirmations or schedules for meetings, invitations, and other correspondence that does not relate to business does not require approval."
Rule 5: Shut Up at All Times. "It is the policy of the firm to make no comment on rumors whatsoever, even to deny rumors you believe to be untrue."
Rule 6: Guys, This Isn't Lehman; Don't Just Make Stuff Up. "Prior to recommending that a customer purchase, sell or exchange any security, salespeople must have reasonable grounds for believing that the recommendation is suitable."
Rule 7: Don't Forget, We're Always Watching You. "All sales correspondence from or to employees working from home offices must be routed through regional offices for purposes of review, approval, distribution and retention."
Rule 8: No, Seriously, We're Always Watching You. "Each individual's correspondence must be sampled no less often than annually."
Rule 9: We Even Have Rules About Mass E-Mails. "'To All' memos ... must be approved as described in the section entitled 'Firmwide Memoranda' in the Employee Handbook."
Rule 10: Whatever You Say, Say It This Way. "Avoid superlatives and exaggerations." "Write using standard, formal written language." "Communicate succinctly. Stay strictly to the topic of your communication. Do not include any gratuitous comments."
Rule 11: Just Don't Call It a Recommendation. "Firm employees frequently provide so-called 'trade ideas' to multiple recipients. Such trade ideas are designed to help clients take advantage of market conditions and intelligence, but are not intended to be specific buy/sell recommendations."
Rule 12: Don't Ever Forget, We're Always Watching You. "Correspondence (directed to registered representatives involved in the sale of securities) will be opened by, or in the presence of, an authorized individual to identify any possible complaints."

Investment Bank or Church of Scientology?  I don't know, but I've got a few 'trade ideas' for you.  I'll just have to give you a more detailed presentation.  Also, that Elizabeth Warren is a real go-getter.

Kasich Blows Off Mouth, Again.

John Kasich can't help but put his foot in his mouth, which seems physically impossible when his head is up his ass:

Just weeks after approving a deal to give Bob Evans Farms Inc. $11 million in loans and grants to stay in Ohio, Gov. John Kasich remarked that the food and restaurant chain offers staff health care benefits that are “shabby, at best.”

The remark prompted union activists on Thursday to call on Bob Evans Farms Inc. to improve the benefits package offered to workers.

Ohioans Against Shabby Benefits, a coalition of citizens and labor unions, said it believes that all workers should have the right to good benefits.

Bob Evans, which is moving its headquarters from Columbus to the suburb of New Albany, has $1.7 billion in annual sales and 44,000 employees.

Hourly restaurant workers are offered a 401(k) and a 401(a) retirement plan, optional health insurance, voluntary life insurance, and half-priced meals while on the clock, according to the company website.

So the governor was making the case that public employees ought to get shitty benefits because Bob Evans employees have them.  That offends Bob Evans, which Kasich was also bragging about keeping in Ohio.  What a dumbass.  The only thing that could make me move from Ohio would be having a dipshit like John Kasich as governor.  I sure wish high taxes in Ohio made him move somewhere else.

Mr. Obvious Headline of the Day

Josh Green's post on Donald Trump has the headline, "In Financial Circles, It's Pretty Well Known that Trump is a Deadbeat." 

No kidding.  Even amongst Western Ohio farmers that is pretty well known. I can't believe that he could run for President when the country is facing bankruptcy, unless we want somebody in there who knows about the process.  That dude has bombed more deals than we've bombed wedding receptions in Afghanistan.  Jeez.  From the story:

Last night, NBC News did a damning expose of Trump's record, which is replete with bankruptcies, lawsuits, and aggrieved former investors. But that only scratched the surface. Trump's hilarious, bombastic dismissal of Mitt Romney's business career, coupled with his heightened political profile and rampant egotism, suddenly seems to be rubbing Wall Street folks the wrong way. Financiers who chuckled about Trump, have become peeved and willing to share their thoughts on his business acumen.

Earlier this evening, I had the opportunity to get the unvarnished thoughts of a former Deutsche Bank employee familiar with Trump from this $640-million deal gone awry on the Trump International Hotel & Tower in Chicago. Trump was sued to collect on a $40-million personal guarantee that was part of the deal. Suffice it to say, the banker held a dim view of the Donald. "[The Chicago deal] was pretty minor given all the other things going on at the time. Real estate developers do default from time to time," he said. "But this guy has been doing it for 20 years, failing. Remember the Trump Shuttle? That's why he'll never run. His finances just won't hold up to scrutiny. It's pretty well known in financial circles that this guy is a deadbeat."

Why would anybody take this guy seriously?  My guess is that he's just a glorified con man, but the GOP always seems to fall for a flim-flam man.

Naked Capitalism Link of the Day

Today's link: Gov. Scott Walker Reportedly Planning Financial Martial Law in Wisconsin, at Forbes:

Reports are surfacing that Scott Walker is now preparing his next assault on the democratic political process in the State of Wisconsin. Following the lead of Michigan GOP Governor Rick Snyder, Walker is said to be preparing a plan that would allow him to force local governments to submit to a financial stress test with an eye towards permitting the governor to take over municipalities that fail to meet with Walker’s approval.
According to the reports, should a locality’s financial position come up short, the Walker legislation would empower the governor to insert a financial manager of his choosing into local government with the ability to cancel union contracts, push aside duly elected local government officials and school board members and take control of Wisconsin cities and towns whenever he sees fit to do so.

What is the deal about Midwestern governors attempting to top each other as the biggest asshole?  Prior to the 2010 election, this was a civil, but struggling region.  Since then, it has become a competition amongst the governors of Wisconsin, Michigan, Indiana, Ohio and Pennsylvania to create the most dysfunctionally operating, regressive, cruel to the poor third-world model failed state.  And the competition is pretty fierce.  The privatization, slashing of environmental regulatory enforcement, cuts to social programs and tax cuts for the wealthy, along with runaway centralization of power in the governor's offices is absolutely terrifying.  Never vote Republican.  They always will screw you.

Congressional Shenanigans

Ezra Klein relates how the Democrats almost tricked the Republicans into passing the Republican Study Committee's We Hate Our Government budget on Friday:

I haven’t paid much attention to the Republican Study Committee’s budget, as it wasn’t going to pass. It wasn’t even going to come close to passing. This is a document, after all, that House conservatives released to make Paul Ryan look like a squishy moderate. No one was going to vote for it. No one, that is, until earlier this afternoon, it almost passed.

Here’s what happened: In the House of Representatives, a simple majority can pass a bill. But you can do more than just vote “yes” or “no.” You can also vote “present.” So a bunch of Democrats — 172 of them, to be exact — either voted “present” or, more sneakily, switched from “no” to “present.” As the number of “no” votes dwindled, the confused Republican realized their “yes” votes — votes that were friendly expressions of conservative solidarity rather than an actual effort to pass the RSC’s plan — were becoming a majority. The result, as Brian Beutler says, was “chaos” on the House floor, as Republicans, once they realized what was going on, rushed to switch their “yes” votes to “no” votes to make sure the RSC budget didn’t actually pass.

I wonder how long the Democrats have been saving that trick.  Jim Jordan, who heads the Republican Study Committee is the ultimate do-nothing backbencher.  I wouldn't be surprised if he never voted for any of the final Budget Bills in his 12 years in Columbus.  I remember him opposing a couple of the budgets because the sales tax had been increased to avoid making big cuts.  He swears he won't raise any taxes ever, and is one of the people who will vote against any compromise because he wants to maintain ideological purity.  But, he's guaranteed to continue winning elections in West Central Ohio, so we'll have to keep paying him to do nothing.  That is better than if he gets to slash up the government like he wants to.

After the Robber Barons

At the NYT:

What is the explanation? In all of these cases, the causal mechanism is the same: Unregulated capitalism generates both rapid growth and burgeoning inequality.
In the absence of legal channels for influencing policy, such as the lobbying and campaign contributions in the United States, such attempts manifest themselves as corruption. That was true of the American Gilded Age, and it is true of the BRICs now.
Is it fair to say, then, that corruption and inequality are natural byproducts of the early stages of market-based capitalism? A superficial survey of history, from Bismarck’s Germany to Japan after World War II to East Asia in the 1970s and 1980s, seems to bear this out. Indeed, this might come to be accepted as a social-science theory, like the Kuznets curve, which shows that inequality first rises and then falls with the level of development. It could, in fact, be part of the explanation for this phenomenon.
The American experience also suggests a corollary proposition. Excessive corruption and inequality, by corroding the political process, threaten to delegitimize capitalism and the market system and so create pressures for reform and the redistribution of wealth that then temper the incentive-driven impetus to capitalist growth, which caused the inequality in the first place.

The necessity for redistribution and social policy thus becomes a mechanism for the system to correct itself. In the United States, it took the better part of the half-century preceding World War II for this to occur. The worst excesses of capitalism were reined in only when a middle class backlash led to legislative change, regulatory reform and anti-corruption rules.

The Upper Crust might want to keep this in mind.  If things turn back down, it may be hard to continue to convince the rubes in the Republican Party that it is liberals who are screwing them.

No Space Shuttle for Dayton

DDN:

NASA’s decision Tuesday not to donate a space shuttle to the National Museum of the U.S. Air Force angered members of Ohio’s congressional delegation, who called for a federal investigation.

They urged the U.S. Government Accountability Office to review NASA’s selection process that left out other sites in the country’s interior, including Chicago, Tulsa and Houston.

Four of the 21 competing sites received shuttles. Three of the sites are on the East Coast, and one is on the West Coast. NASA ranked the Air Force museum fifth among its top sites, said U.S. Rep. Steve Austria, R-Beavercreek.

Austria said NASA Administrator Charles F. Bolden Jr. told him the museum met all of NASA’s stated key criteria for permanent display of an orbiter, including science and education programs, accessibility, display plans and climate-controlled location for housing and displaying the spacecraft.

But, in the end, New York City; Los Angeles; Washington, D.C.; and Florida’s Space Coast won out, with their population bases and tourist drawing power. Bolden overlooked the Air Force museum even though it already draws 1.3 million visitors a year.

The Air Force museum is also within a day’s drive of 60 percent of the U.S. population, museum supporters said.

Count me as one who thinks people around Dayton were deluding themselves in the Space Shuttle chase.  How much work did Dayton really do on the shuttle.  Houston didn't get one and the program was based there.  It is estimated that Houston may lose 7,500 jobs from the end of the Shuttle program.

Here's Mike Turner being a good local pol:

Austria, U.S. Rep. Mike Turner, R-Centerville, and others said Bolden’s decision slighted the Midwest and the Air Force, which was an early partner of NASA’s in designing and developing the space shuttle and contributed $8 billion to its development.

“New York and L.A. don’t make a lot of sense. They didn’t make contributions to the program,” said Turner, referring to the shuttle program. “No one in the Midwest is going to have a shuttle.

“We’ll never be New York; we’ll never be Los Angeles. But we’ll always be home to the Wright brothers, to all things aerospace,” Turner said.

I would say that Los Angeles did have a decent amount to do with the shuttle program, as Edwards Air Force Base was the backup landing site for shuttle missions.  New York may not have a great case for getting a space shuttle, but it is also the largest city in the United States, and will see more tourists in a year than Dayton will see in 25 years.  I also think the Smithsonian Institution and Cape Canaveral were obvious picks for a Shuttle.

Ohio is a bastion of the Tea Party, even though this area's economy is kept afloat by Wright-Patterson Air Force Base, the largest single-site place of employment in Ohio.  When the public reacts to such a perceived slight to the region, it only highlights that our economy is extremely dependent on largess from Washington.  In spite of this, the majority of the region denigrates the federal government.  But we are not unique.  The John Birch Society, the Tea Party and other anti-government movements have always flourished in Orange County, California, even though that economy was driven by defense contractors throughout the Cold War.  Why do so many people who depend on work from the government, hate the same institution.  I don't quite understand.

Living an Objectivist Life

Alyssa Bereznak describes life with her Ayn Rand-obsessed father (h/t the Dish):

What is objectivism? If you'd asked me that question as a child, I could have trotted to the foyer of my father's home and referenced a framed quote by Rand that hung there like a cross. It read: "My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute." As a little kid I interpreted this to mean: Love yourself. Nowadays, Rand's bit is best summed up by the rapper Drake, who sang: "Imma do me."

Dad wasn't always a Rand zealot. He was raised in a Catholic family and went to church every week. After he and my mother got married in 1982, they shopped around for a church. He was looking for something to live by, but he couldn't find it in traditional organized religion.
Then he discovered objectivism. I don't know exactly why he sparked to Rand. He claimed the philosophy appealed to him because it's based solely on logic. It also conveniently quenched his lawyer's thirst to always be right. It's not uncommon for people to seek out belief systems, whether political or spiritual, that make them feel good about how they already live their lives. Ultimately, I suspect Dad was drawn to objectivism because, unlike so many altruistic faiths, it made him feel good about being selfish.

I think this hits the nail on the head.  Overall, the philosophy is a justification for being selfish.  Rand doesn't just say that you have to look out for yourself first, she makes it a moral failing to be altruistic.  I have a hard time understanding how so many people who claim to be Christian can also claim to enjoy Rand's books.  She wages jihad against all organized religion to undermine altruism and solidify her own philosophy of the goodness of selfishness.  Maybe I've been brain washed by organized religion, but self-sacrifice for the benefit of others does strike me as virtuous.  The concept that so many self-described Christians can wrap the ideas of their church and the ideas of Rand together seems like serious mental gymnastics.  I think in the end they tie together their disdain for government, their faith in God and their belief in their own personal goodness.  This causes them to believe that if they didn't have to pay taxes, they would help out the less-fortunate through their church and cut out some government waste too.  I call shenanigans.

Executive Pay Soars, Not Anybody Else's

Via Mark Thoma, the NYT:

After shrinking during the 2008-9 recession, paychecks for top American executives are growing again — in many cases, significantly so.
Rarely has the view from the corner office seemed so at odds with the view from the street corner. At a time when millions of Americans are trying to hang on to homes and millions more are trying to hang on to jobs, the chief executives of major corporations like 3M, General Electric and Cisco Systems are making as much today as they were before the recession hit. Indeed, some are making even more.
The disparity is especially stark as companies are swimming in cash. In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.

So far, this recovery has not trickled down. After two relatively lean years, C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

Guess what, it won't trickle down.  The theory of trickle-down economics is the biggest con in history.  These asses are arrogant enough to think they deserve the pay.  They don't.  I was recently reading Traitor to His Class, by H.W. Brands.  It is a great biography of FDR.  One of the most notable things to me was that trickle down economics was the M.O. of Calvin Coolidge and Republican Party of the 1920's.  In his 1932 Convention acceptance speech, FDR says:

There are two ways of viewing the Government's duty in matters affecting economic and social life. The first sees to it that a favored few are helped and hopes that some of their prosperity will leak through, sift through, to labor, to the farmer, to the small business man. That theory belongs to the party of Toryism, and I had hoped that most of the Tories left this country in 1776 ....

In the years before 1929 we know that this country had completed a vast cycle of building and inflation; for ten years we expanded on the theory of repairing the wastes of the War, but actually expanding far beyond that, and also beyond our natural and normal growth. Now it is worth remembering, and the cold figures of finance prove it, that during that time there was little or no drop in the prices that the consumer had to pay, although those same figures proved that the cost of production fell very greatly; corporate profit resulting from this period was enormous; at the same time little of that profit was devoted to the reduction of prices. The consumer was forgotten. Very little of it went into increased wages; the worker was forgotten, and by no means an adequate proportion was even paid out in dividends--the stockholder was forgotten.
And, incidentally, very little of it was taken by taxation to the beneficent Government of those years.

What was the result? Enormous corporate surpluses piled up-- the most stupendous in history. Where, under the spell of delirious speculation, did those surpluses go? Let us talk economics that the figures prove and that we can understand. Why, they went chiefly in two directions: first, into new and unnecessary plants which now stand stark and idle; and second, into the call-money market of Wall Street, either directly by the corporations, or indirectly through the banks. Those are the facts. Why blink at them?

Then came the crash. You know the story. Surpluses invested in unnecessary plants became idle. Men lost their jobs; purchasing power dried up; banks became frightened and started calling loans. Those who had money were afraid to part with it. Credit contracted. Industry stopped. Commerce declined, and unemployment mounted.

And there we are today.

Now that is something we can relate to.  It amazes me that Republicans have reverted back to their policies of the 20's, with the exact same result.  The difference for the country is that too many people can't see how embarrassingly wrong the Republicans and their policies are.  Bring back higher marginal tax rates.  These executives don't earn these salaries.  It is only by Republican policies that they get them.  I recently saw a graphic showing the top executive pay, from the 1920's, from 1933 until the 1970's, and the pre-crash period in the 2000's.  The pay after 1933 was under control, until Republicans started cutting taxes with the promises that wealth would trickle down.  It hasn't.  Hopefully I can find that.  It is extremely interesting.

More Bad Fans

From the LA Times:

Minutes before San Francisco Giants fan Bryan Stow was beaten in the Dodger Stadium parking lot, he texted a relative to say that he feared for his safety, his cousin said Tuesday.

In the text message, he said he was "scared inside the stadium," his cousin John Stow said, adding: "He doesn't use that term loosely."

A short time later, after the game had ended, the 42-year-old paramedic and father of two walked out to look for a taxi and was attacked so brutally that he remains in a coma with a brain injury.

On Tuesday, Bryan Stow's family gathered outside Los Angeles County-USC Medical Center and thanked well-wishers in Los Angeles, San Francisco and around the country for their support.

As the Dodgers head to San Francisco next week for the Giants' opening home stand, Stow's family called for civility among rival sports fans and asked those who saw anything or know the assailants to help detectives arrest those responsible.