mm289: Recession: Paying the price for letting our power bleed away

February 18, 2008

MUDGE’S Musings

Distracting as the events of the day can be, when we get right down to it, the dire rumblings of our deteriorating economic state cannot be deflected for long.

Almost official

Last Thursday, our scholarly if modestly effective Chairman of the Federal Reserve, Ben Bernanke, finally said what he’s been hinting at for months: the economy hasn’t seen the floor yet.

Read the rest of this entry »


mm285: Mayor Mike tells some hard truths

February 14, 2008

MUDGE’S Musings

Time for another in the continuing saga of Michael Bloomberg, billionaire mayor of New York City, and his interesting feints at running for president this year.

At the bottom of this post, we’ll provide our ever lengthening link list, as this story has intrigued this nanocorner of the ‘Sphere© for many months now.

Yesterday, 13-February, President Bush signed the tax rebate legislation that he, George III, promises will lift this nation out of its recessionary funk.

The mayor, who knows a thing or two about matters financial (made his not inconsiderable fortune reporting financial news to professionals by harnessing novel technology to do so), spoke quite colorfully today.

He characterized the rebate as “like giving a drink to an alcoholic,” and said the nation “has a balance sheet that’s starting to look more and more like a third-world country.”

Not sure, but Burkina Faso might have just been insulted.

Read the rest of this entry »


mm263: This man -so- wants to pull the trigger…

January 23, 2008

MUDGE’S Musings

bloomberg Now that we’re three weeks into 2008, and Blue Monday is behind us, we’re ready to once again consider the presidential prospects of New York City mayor Michael Bloomberg.

Anyone stumbling more than once over this nanocorner of the ‘Sphere© will recall that Mayor Mike’s non-campaign has intrigued us for many months.

Mayor Michael Bloomberg of NYC for U.S. President 2008

mm024: Bloomberg?
mm038.1: Jews Sorta Like Bloomberg Even Though…
mm051: Bloomberg.com: Bloomberg’s Money, Visibility…
mm054: Chicago Tribune news: An Idea for Bloomberg
mm057: Bloomberg for President?
mm058: What Kind of President would Michael Bloomberg?
mm064: How to take down plutocrat Michael Bloomberg…
mm066: Michael Bloomberg’s Knightly Ambitions
mm069: The Votes Are In for New York’s Mayor Mike
mm086: Bloomberg Takes School Plan… to Midwest
mm110: Grading Mayoral Control
mm117: The cure for the Electoral College is worse…
mm208: Overdue a Bloomberg post
mm238: Bloomberg’s candidacy — closer to real?
mm248: Political Potpourri
mm254: Bloomberg – just won’t go away…

Faithful reader may further recall our R-word post of a few days ago. Paul Krugman was analyzing the Republican and Democratic candidates’ plans for dealing with our current increasingly dire economic distress. We commented that Krugman’s analysis left out a key player.

Can’t help but wonder what Michael Bloomberg thinks… Mike, Mr. self-made billionaire, what gets us out of our funk, fast?

Apparently, the mayor, or his people, were thinking along similar lines.

nytimes

Bloomberg Rips Federal Stimulus Package

By THE ASSOCIATED PRESS | Published: January 23, 2008 | Filed at 7:37 p.m. ET

WASHINGTON (AP) — New York Mayor Michael Bloomberg said the White House and Congress on Wednesday are negotiating a shortsighted economic stimulus package after years of lousy financial management.

At an evening session of a meeting of the U.S. Council of Mayors in Washington, DC, Bloomberg laid into the administration’s proposal.

The billionaire mayor, who is said to be considering an independent presidential bid yet denies that he is a candidate, said the $150 billion stimulus package being hammered out between Democratic and Republican leaders won’t be enough.

The man knows his numbers; recall that starting from a good idea, he worked smart enough, and hard enough to become a billionaire.

”There’s just one problem: It’s not going to make much of a difference because we’ve already been running huge deficits,” Bloomberg said.

Some of those urging Bloomberg to run for president say his record as a CEO is his biggest selling point in a time of economic turmoil.

And, as MUDGE asked the other day, does he have a better plan in mind? Actually, yes.

[Please click the link below for the complete article — but then please come on back!]

Bloomberg Rips Federal Stimulus Package – New York Times

Makes sense, doesn’t it? A few hundred dollars of tax rebate isn’t going to save anyone’s house.

Makes sense, doesn’t it? Plan to rebuild our crumbling infrastructure for the long term, rather than playing political games with earmarks year to year.

Makes sense, doesn’t it? Ease immigration – get more motivated, vigorous workers into the country to help us work our way out of our economic funk (can’t grow by shrinking!).

As I hoped, on this issue, the man makes sense.

Your country needs you, Michael Bloomberg!

It’s it for now. Thanks,

–MUDGE

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mm257: The R-Word – Not that racy television show…

January 17, 2008

MUDGE’S Musings

On more and more minds, and lips, lately is that dreaded R-Word, recession.

First some news that we won’t have to work too awfully hard to relate to the topic at hand.

1. A critical gear in the export engine gets stripped

The aerospace competition between Europe’s Airbus and the U.S.’s Boeing has been hard-fought (think: Saturday-night saloon, brass-knuckles style) commercial dueling of a classic nature.

Boeing, complacent after lucrative decades owning global airline sales was embarrassed when upstart Airbus, an amalgam of several European aerospace firms unable individually to compete with the Boeing colossus began to outsell the arrogant giant.

Thus it was with no small satisfaction that Boeing watched Airbus announce delay after delay delivering its latest product, the immense 600-passenger A380, finally released to its first customers late in 2007.

Now, the shoe is on the other foot, as Boeing yesterday was forced to admit that its latest product, the new-age, environmentally sensitive 787 Dreamliner, has encountered delivery glitches of its own, the impact of which will push deliveries back to 2009.

Here’s the word from Boeing’s home-town paper, the Seattle Post-Intelligencer (sorry, Chicago Tribune, but Boeing’s head may have relocated, but its heart remains in Washington State).

seattlepi

Boeing explains new 787 delay

Company ‘underestimated’ time to finish partners’ work

By JAMES WALLACE
P-I AEROSPACE REPORTER

It was 90 days ago Wednesday that Boeing troubleshooter Pat Shanahan took over the 787 program after then-Dreamliner boss Mike Bair was sacked.

A week earlier, The Boeing Co. had announced an embarrassing six-month delay, with the first Dreamliner deliveries to airlines slipping from May until the end of 2008.

Boeing believed at the time that it would be able to complete work on the first plane in its Everett factory and have it flying by the end of March. It is the first of six that will be needed for the flight test program before the 787 can be certified by regulators to carry passengers.

The story rings true enough; the 787 is a new aircraft, being assembled a new way.

The 787 represents a new way of building airplanes for Boeing, which turned over most of the manufacturing and assembly work to key partners in Italy, Japan and elsewhere in the United States.

But those partners were unable to complete a significant amount of work before the unfinished sections of the first of six test-flight planes arrived in Everett for final assembly. Boeing has struggled to catch up on all this “travel” work.

Typical complexity issues, perfectly understandable, if disappointing.

[Please click the link below for the complete article — but then please come on back!]

Boeing explains new 787 delay

It will take a more adept macroeconomist than yr (justifiably) humble svt (not a very high bar to scale either) to tell us the effect of this delivery delay on the economy. Exports are an important piece of the economic pie, and Boeing a critical element of that slice.

Boeing sneezes, and we all should start looking around for our Nyquil.

2. Okay, it’s a recession. Which candidate makes the most sense?

There’s a presidential election campaign going on, you may have noticed.

NYTimes’ Paul Krugman, one of our favorite economic analysts, takes a look at their positions. Voters are getting nervous; tell us you know how to make us feel better:

nytimes

Responding to Recession

By Paul Krugman | Published: January 14, 2008

Suddenly, the economic consensus seems to be that the implosion of the housing market will indeed push the U.S. economy into a recession, and that it’s quite possible that we’re already in one. As a result, over the next few weeks we’ll be hearing a lot about plans for economic stimulus.

Since this is an election year, the debate over how to stimulate the economy is inevitably tied up with politics. And here’s a modest suggestion for political reporters. Instead of trying to divine the candidates’ characters by scrutinizing their tone of voice and facial expressions, why not pay attention to what they say about economic policy?

In fact, recent statements by the candidates and their surrogates about the economy are quite revealing.

And he proceeds to get to the heart of each candidate’s economic sound bites.

  • McCain: ruefully admits he doesn’t know what he doesn’t know about the economy
  • Giuliani: his cure, a huge tax cut, isn’t
  • Huckabee: just wrong
  • Romney: who just might know something, won’t say anything, fearing to offend
  • Edwards: driving the agenda with a clearly designed policy
  • Clinton: following suit
  • Obama: after an awkward false start, now has a plan, although less progressive than the other leading Dems

[Please click the link below for the complete article — but then please come on back!]

Responding to Recession – New York Times

Can’t help but wonder what Michael Bloomberg thinks… Mike, Mr. self-made billionaire, what get’s us out of our funk, fast?

3. Recession: Bitter but necessary medicine?

Another of MUDGE’s favorite economists, Daniel Gross of Slate, weighs in on our looming distress, and how it could provide a wake-up call to U.S. business:

slate

The Good News About the Recession

Maybe it will finally teach Americans how to compete globally.
By Daniel Gross | Posted Wednesday, Jan. 16, 2008, at 11:53 AM ET

House for saleA sign of the housing slump

A recession may be upon us, which would mean fewer jobs, declining tax revenues, and sinking consumer confidence.

But for some (congenital Bush-bashers, the Irvine Housing Blog, critics of rampant consumerism), the parade of bad news is an occasion for schadenfreude….

(By the way, schadenfreude is defined thusly. Admit it, you always wanted to know but never bothered to look it up. Sequitur Service© at your service!)

… They enjoy seeing inhabitants of the formerly high-flying sectors that got us into the mess—real estate and Wall Street—being laid low. Others hold out hope that a recession will iron out distortions in the housing market, thus allowing them to move into previously unaffordable neighborhoods. Some econo-fretters hold out hope that reduced imports and the weaker dollar—both likely byproducts of a recession—will help close the trade deficit. And a few killjoys believe recessions can be morally uplifting. “High costs of living and high living will come down. People will work harder, live a more moral life,” as Treasury Secretary Andrew Mellon put it in the disastrous aftermath of the 1929 crash and ensuing Depression. Not for him stimulus packages and enhanced unemployment benefits. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” (Thanks in part to such comments, voters liquidated Republicans for a generation.)

With the exception of a few gleaming stars, like our friends Boeing, U.S. companies have been woefully ineffective at selling to global markets.

The world is running away from us. The volume of global trade in merchandise has been increasing rapidly. And it’s not just the United States importing goods from China. It’s China importing natural resources from everywhere and building infrastructure in sub-Saharan Africa, sub-Saharan Africa buying oil from the Persian Gulf, Dubai investors purchasing Indian real estate, Indian builders buying German engineering products and services, and German engineers buying toys made in China. With each passing day, an increasing number of transactions in the global marketplace do not involve the United States. We’re still a powerful engine. But the world’s economy now has a set of auxiliary motors.

We know we’ve been floundering; the way out may well be to find business leaders with global skillsets.

[Please click the link below for the complete article — but then please come on back!]

The good news about the recession. – By Daniel Gross – Slate Magazine

It’s going to be an uphill fight. We’ve earned our way into this economic distress: outsourcing our jobs instead of figuring out how to become competitive; living high on borrowed money that is now coming due big time; wasting geopolitical and real capital, and thousands of young American lives, on a poorly designed, inadequately executed, military misadventure in Iraq.

The R-Word

We hope you enjoyed this week’s three-part episode, and hope to heaven that we don’t have to do run too many more of them!

It’s it for now. Thanks,

–MUDGE

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mm254: Bloomberg – just won’t go away…

January 14, 2008

MUDGE’S Musings

The current issue of Business Week contains an interesting interview by Maria Bartiromo of Charlie Cook, a Washington DC based political analyst. You may have seen his talking head during an election night or two on NBC.

Political Guru Charlie Cook on the Primaries

FACE TIME By Maria Bartiromo | January 21, 2008

magazine cover

https://i0.wp.com/images.businessweek.com/story/08/370/0110_mz_facetime.jpg

Charlie Cook, political analyst photographed on 8 January 2008 in Washington DC Chris Usher

MARIA BARTIROMO

What will be the biggest issues in the election?

CHARLES COOK

I think it’s going to be the economy and America’s place in the world. And one of the things that’s sparking Obama’s rise is the idea of restoring respect for America.

Who displays the best grasp of economic issues?
Mike Bloomberg. What’s interesting is that if you look at polls of Democratic voters, they are very concerned about the economy. Republican voters just don’t seem to be showing that much concern about where the economy is going. But once the GOP nominee emerges, the economy is going to assert itself as a very, very big issue in the general election.

Guess it’s not just New York types who like Mike. Second question – out flops Bloomberg.

Could he win?
[Third-party candidate] Ross Perot was at 30% percent and in first place at one point in June, 1992, and an independent candidate would need to be able to get 37% to 39% of the popular vote to start winning a bunch of states by small margins and assemble the 270 electoral votes necessary. It’s plausible. A very bright, very impressive person spending $1 billion, with no fund-raising expenses and no nomination fights, could win if the stars line up right in the sense of both parties’ nominees emerging badly damaged.

We just posted this grid a few days ago, but here’s what we’ve been talking about since last June:

Mayor Michael Bloomberg of NYC for U.S. President 2008

mm024: Bloomberg?
mm038.1: Jews Sorta Like Bloomberg Even Though…
mm051: Bloomberg.com: Bloomberg’s Money, Visibility…
mm054: Chicago Tribune news: An Idea for Bloomberg
mm057: Bloomberg for President?
mm058: What Kind of President would Michael Bloomberg?
mm064: How to take down plutocrat Michael Bloomberg…
mm066: Michael Bloomberg’s Knightly Ambitions
mm069: The Votes Are In for New York’s Mayor Mike
mm086: Bloomberg Takes School Plan… to Midwest
mm110: Grading Mayoral Control
mm117: The cure for the Electoral College is worse…
mm208: Overdue a Bloomberg post
mm238: Bloomberg’s candidacy — closer to real?
mm248: Political Potpourri

Bartiromo’s interview of Cook covers all of the major candidates of both parties, but Bloomberg was discussed first.

Definitely attention grabbing.

[Please click the link below for the complete article — but then please come on back!]

Political Guru Charlie Cook on the Primaries

MUDGE thinks that third party candidates stir the pot; sell advertising and commercials; buy advertising and commercials; and generally pique the interest of the commentariat. Oh, boy, a three-way!

But could there be more going on? With the economy seemingly headed for recession (ugh, the dreaded “R”-word!), perhaps having a leader who is recognized as very smart where economic issues are concerned might be seen by more than just political types as salutary for the U.S.

Last time we facetiously (that’s our story now) proposed an Obama-Bloomberg ticket, but I’ll bet Business Week would love a Michael Bloomberg-Warren Buffett ticket!

It’s it for now. Thanks,

–MUDGE

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