June 14, 2006

I Can’t Comment on This and Keep It Clean

Filed under: Economy,Scams,Taxes & Government — Tom @ 7:45 pm

So go to these two places and read for yourself about how our hurricane relief money has been mishandled:

  • Porkopolis — “$1.4 billion in bogus assistance to hurricane ‘victims’”
  • The New York Post — “Perfect Storm of FEMA Scams”

I am not responsible if your walls turn blue.

Eliot Spitzer Rolls Over for the NY State Teachers’ Union

This looks like a very lenient settlement for a pay-for-play breach of fiduciary duty involving over 50,000 people:

Teach union penalized 100G

The state’s largest teachers union agreed yesterday to shell out $100,000 and introduce reforms to end Attorney General Eliot Spitzer’s probe into its practice of pushing members into a retirement plan offered by a Dutch insurance giant.

The New York State United Teachers collected nearly $3 million a year for urging members to participate in a plan offered by ING – although cheaper plans were available, according to Spitzer’s office.

Brass in the union’s Member Benefit Trust attempted to hide this “silent partnership” and encouraged members to attend financial planning seminars that ING used as “a foot in the door,” he said.

“A simple rule that my office has enforced time and time again is that fiduciaries must place the interests of their clients first,” Spitzer said.

The union represents 525,000 state workers (obviously more than just the teachers; in fact I believe it’s nearly all unionized state workers), and 53,000 invested in ING. The union president promised to go and sin no more.

Why the leniency for what amounted to financial services bribery for access, where, it appears (e-mail me if I’m wrong), that the recipient gets to keep its bribes? You probably know already:

Spitzer, a Democratic gubernatorial hopeful, was slated to get the union’s nod at its annual convention last month, but he backed out of the event because of the investigation. The labor leaders will announce their endorsement for governor in August.

From here, it appears that Spitzer just wanted this one to go away. This is, to say the least, an interesting contrast to his take-no-prisoners approach in other situations.

I expect the kid-glove media treatment of this story to continue, as it is all I have seen so far.
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UPDATE: There’s lots of background at Russell Bailyn’s blog about the ING-union relationship, what the $3 million a year was going for, and the quality (or lack thereof) of the investment products ING has offered.

UPDATE 2: It also appears to me that Spitzer has been quite a bit softer on ING for market timing abuses (Wall Street Journal link requires subscription) and referral fees that he was on, say, Putnam Funds (where he complained bitterly about the company’s SEC settlement) and Bank of America, where he extracted $675 million.

“Fake Towns”? How About “Fake Journalism”?

How Dare These People Try to Set Up a Nice Life!

You don’t think the writer of this piece, which made its first appearance in The Wall Street Journal around the first of June, has any bias, do you?

Fake Towns Rise, Offering Urban Life Without Grit
By Thaddeus Herrick, The Wall Street Journal

Until a few years ago, Bishop Road was a grassy field in the midst of a gargantuan office park. Today, it’s the main drag of Legacy Town Center, a 75-acre development 20 miles north of Dallas that’s home to 4,000 people. The project has been such a hit that developers are building on an additional 75 acres across the street.Legacy Town Center is one of dozens of faux downtowns popping up across the country, from Kansas City to Washington, D.C., spurred by a demand for urban living scrubbed of the reality of city life. A careful mix of retail, residential and office space built with traditional materials such as stone and brick, Legacy looks like a city but has neither panhandlers nor potholes. Many residents rarely venture even to downtown Dallas, which has been trying to turn itself into place to live for almost a decade.

“There’s too much riffraff down there,” says Ron Pettit, a 36-year-old contractor, as he snacks on brie and grapes at a table outside Bishop Road’s Main Street Bakery and Bistro.

….. Even though these faux downtowns contain tinges of suburbia, they’re taking advantage of a growing backlash against the sprawl that rings Dallas and other U.S. cities. The reaction began in the 1980s with the rise of New Urbanism, a movement of architects and planners calling for a return to traditional towns where people work, shop, live and play.

Calling these set-ups “fake” or “faux” is an insult to the people who built them and to the people who live there. The builders, as noted late in the article, are taking extraordinary risks to build these developments (not all of them work out). More importantly, individuals and families are in some cases choosing these arrangements because they think it’s best for them (it’s amazing how people frely exercising “choice” so often seems to be a bad thing if the topic isn’t reproductve rights).

Parents don’t sign waivers on their birth certificates promising that they would expose their children to some required amount of crime and grit before the hospital releases the family, do they? (Don’t give them any ideas. — Ed.) If we’re going to go after people for setting up “artifical lives,” how about college dorms? Retirement communities? Planned urban developments (PUDs) controlled by homeowners’ associations? Manhattan co-ops? Shoot, even convents and monasteries? Every one of these set-ups could fairly be accused of not allowing their residents exposure to all of the vicissitudes and grit of life. Since when did such exposure became anyone’s moral obligation?

Also note how many of the same planners who deplore “sprawl” don’t like these new communities, even though they directly address many of the complaints they have about “sprawl.” This shows that their issue isn’t as much about “sprawl” as it’s about those darned people choosing not to live in existing urban areas.

I can see why existing urban areas might be having difficulty competing against these new (NOT fake) downtown-centered communities. But why is that? Three answers: Crime, high taxes, lousy schools. Sometimes a fourth: Skyrocketing core-area home prices. My suggestions: Stop whining, fix those problems, and make your cities places people want to choose.

Passage of the Day: George Will on Al Gore’s Enviro-Nonsense

The syndicated columnist shows that the former Vice President and the truth remain very distant strangers:

For example, when he said on “This Week” that the Kyoto Protocol “has become the binding law in most of the world,” he adopted a, shall we say, broad understanding of “binding”: Rapidly developing China and India, with more than a third of the planet’s population, are exempt from emission limits, and of the 15 European Union countries committed to hitting certain Kyoto targets, only two are on a path to do so.

Minutes after Gore said that “the debate in the science community is over,” he said “there is a debate between the American ice science community and ice scientists elsewhere” about whether the less than extremely remote danger is a rise in sea level of a few inches or 20 feet. And he said scientists “don’t know what is happening” in west Antarctic or Greenland. So when Gore says the scientific debate is “over” he must mean merely that there is consensus that we are in a period of warming.

But this is not where debate ends, but where it begins, given that at any moment in its 4.5 billion years, the planet has been cooling or warming. The serious debate is about two other matters: The contribution of human activity to the current episode of warming and the degree to which this or that remedial measure (e.g., the Kyoto Protocol) would make a difference commensurate with its costs.

Sorry, Al: The majority of the world’s population NEVER adopted Kyoto (that would include the USA), and the debate in the science community is far from over, despite attempts at intimidating those who won’t swallow the gospel of global warming and “climate change” whole.

Biz Weak Briefs of the Week

I call the magazine known to most as Business Week “Biz Weak” because it often has hilariously biased and/or ignorant reporting. That isn’t to say it doesn’t do good work from time to time, but compared to other business periodicals, it usually has less of the good work and more of the bias.

Here are some highlights and lowlights from the June 19 issue (note; some Biz Weak links require a paid subscription, or will within a couple of weeks if they don’t now):

  • Three months to go from hero to goat? In March, Biz Weak did an extraordinarily fluffy portrayal of Home Depot and its president Bob Nardelli. The June 19 issue includes Home Depot as one of the country’s three worst alienators in customer service (“Last Among Shoppers“). So which is it, folks?
  • “Slipping Past the SEC” finds that private companies offering bonds are limiting access to institutional investors, enabling the firms to avoid SEC registration and having to comply with Sarbanes Oxley. Of course, the article sees that as a bad and “risky.” How about looking into why companies are going to such lengths to avoid have to deal with SarBox?
  • This IS a revelation — “What Price College Admission?” reports that some parents are spending upwards of 30 grand on consultants who will chart out Muffy and Biff’s courses, extracurriculars, and (essentially) their lives, in some cases from pre-school, so that they’ll get admitted into a prestige school. At the risk of sounding cynical (no, actually sounding cynical–Ed.), they do this so they can get a better-than-average brainwashing from the “prestige” schools, many if not most of which are notorious for their discussion-stifling political correctness. What was that saying about fools and their money?
  • Very good pointCatherine Yang says that the biggest lesson from reactions to Fed Chairman Bernanke’s straight talk during the past couple of weeks is that “Wall Street (will have to) think for itself.”
  • Definitely worth noting — Much of Hyundai’s management has been busted in Korea for various forms of bribery and corruption. Biz Weak notes that even the company itself is acknowledging a management vacuum (third item at link), something I have not seen or read elsewhere. Too bad, because the company just shocked the world in the latest overall initial-quality ratings, coming in at Number 3 (behind Porsche and Lexus, but ahead of Toyota and Jaguar in the top five), which may come to be seen as their high-water mark. Also, maybe Ford’s acquisition of Jaguar has finally laid to rest the once-popular saying that you needed to own two Jaguars to cover for the fact that one was always in the shop.

The 27th Carnival of Ohio Politics Is Up!

Filed under: News from Other Sites — Tom @ 10:23 am

And it’s here.

What, Returning Money Only Goes Back One Campaign Cycle?

Filed under: Corporate Outrage,Economy,Taxes & Government — Tom @ 9:22 am

From Reuters on June 9:

The Democratic National Committee plans to return $5,000 in campaign contributions from two Milberg Weiss Bershad & Schulman LLP partners who were indicted last month, a party spokeswoman said on Friday.

The Milberg Weiss firm, known for its class-action securities lawsuits against major corporations, and attorneys David Bershad and Steven Schulman were indicted last month by a federal grand jury in Los Angeles for orchestrating a kickback scheme in which it paid clients for acting as plaintiffs in its lawsuits. All have denied the allegations.

“The DNC will return checks from partners David Bershad and Steven Schulman because they were indicted and because the indictment happened in the cycle that we received their checks,” said DNC spokeswoman Stacie Paxton.

Since 1999, the firm and individuals there have given $2.78 million in campaign donations to Democrats, according to data compiled by the Center for Responsive Politics, which tracks money in politics.

Does anyone remember the newly-discovered “one-cycle rule” during the Enron campaign contributions frenzy? Besides, the Enron money was largely give to charities, because the company was kaput. These Milberg Weiss guys probably need the money for their defense.

Bizzy’s AM Coffee Biz-Econ-Life Links (061406)

Free Links:

  • Kiss My AdSenseSeth Jayson at Fool.com makes a compelling case that Google stock is overvalued, and that link farms, splogs, scraper sites, and the “AdSense-ready web site” cottage industry are not only skimming revenue with no legitimate advertising potential, but also facilitating click fraud:

    But if this problem is as bad as some fear, it could eventually put a major crimp in Google’s entire revenue model, if not the entire pay-per-click business. I would argue that the explosion of link farms and spamblogs is pretty decent evidence that the click-fraud biz is not only alive and well, but also thriving at the expense of all of us. Except Google. For now, anyway.

    He thinks that once the advertising market figures out what has really been going on, the milk from Google’s cash cow will slow down considerably.

  • From saint to sinner? — Nobody sane would disagree that Apple pioneered the digital music market. To do that, it had to forge agreements with record companies limiting the reproducability and portability of songs purchased. Now some protesters (seriously — here’s a video of one in San Francisco) want Digital Rights Management (DRM) totally eliminated. Michael Parekh, who discloses that he is a longtime Apple shareholder, says “wait a minute,” and also criticizes protesters for only biting at Apple:

    And the reason is simple. The current matrix of Apple’s iTunes related offerings, pricing and policies are not dictated by Apple alone. Rather, they’re a complex array of more or less win-win agreements between musicians, music publishers, music companies, music retailers, and of course consumers.

    While I dislike DRM in my media as much as the next guy, I also recognize that for now. it’s a necessary evil to coax the entertainment industry into the digital age.

    And being an optimist, I believe the specific restrictions will get less onerous and more convenient from a consumer point of view in the fullness of time.

    ….. I might be OK with the protest if it was against DRM in general; but singling out Apple when every other software, hardware and music online service provider supports DRM (since there is no other legal alternative), seems a bit unfair.

    Thus I may even go to an Apple store to buy a couple of iPod doodads to show my support for what Apple continues to try and do for consumers, warts and all.

  • The Metro Cincinnati housing market is not cooling, and prices are not softening at all — They’re going up, and very quickly in the past 4 months — A personal Zillow inquiry confirms this. This is significant, as Metro Cincinnati has never been one of the hot markets. If it is now, I would think very few other areas have much to worry about.
  • Tax collections in the City of Columbus will be $8 million higher than anticipated — Guess what they’re NOT thinking about doing with the money? (I know; that’s too easy.)
  • Betcha won’t see much of this poll result — According to Rasmussen, 85% support English as the official language of the US.
  • A certain person who was recently arrested has a name that is eponymous with how the media has covered his party affiliation — as in not at all in over 100 different stories, including this one (HT Chris Engelsma). His last name that describes the media coverage of his arrest only lacks the accent mark: Blase. And in case you really have to ask which party, here’s the answer.

Positivity: Heart Attack Survivor Thanks Firefighters

Filed under: Positivity — Tom @ 6:01 am

“Time is heart,” it is said. Thanks to efficient use of time, Janice Gibson of Colorado is alive, and in gratitude gave her resuers a painting:

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