Not much to say tonight... rough week for celebrities with Ed McMahon, Farrah Fawcett, Michael Jackson, and Billy Mays all passing away. I am reminded how much Jackson's music rules and awed at his dancing talent. He was a troubled man - that is clear.
Turmoil continues in Iran. I still have more that I want to read before I write much about what's going on there. The health care debate is going to pick up even more over the coming weeks. Despite the House passing ACES (the cap and trade bill), it is far from over since the Senate will likely modify the bill significantly before passing it (if they pass it).
We'll watch and report.
Sunday, June 28, 2009
Saturday, June 27, 2009
John Boehner's Failed Gambit
In case you are interested in the decisions being made on Capitol Hill and not too caught up in the Michael Jackson circus, I'd like to provide a summary of a very interesting day in the House. As you may have heard, the House passed H.R. 2454, the American Clean Energy and Security Act of 2009. This is also referred to as "ACES", "Waxman-Markey", or the cap and trade (cap and tax) legislation.
The short summary of the bill says that it will "create clean energy jobs, achieve energy independence, reduce global warming pollution and transition [the US] to a clean energy economy." The official long summary is quite long. The GOP will tell you that it will destroy our economy.
This legislation was officially introduced on May 15, but has been long anticipated since this session began in early January. Nancy Pelosi (D-CA) had vowed to get the bill passed before the July 4 recess in the House. As I had mentioned on this blog a few weeks ago, the bill checked in at 932 pages at the time. Henry Waxman (D-CA), chair of the House Committee on Energy and Commerce, admitted that he had not read the whole bill and hired a speed reader to read part of the bill in a committee hearing in an act of disturbing arrogance. See the link above for more details.
Over the last few weeks, the Democrats have been preparing to get the bill ready for a vote on the floor. It had been reported that the vote would be a close call. That brings us to the events last night and today. The powerful House Committee on Rules published H. Res. 587 late last night (well, early this morning) which laid out the nature of the debate which would be had today on the House Floor.
For those of you not familiar with the Rules Committee, I think it is arguably the most powerful committee in the House - more so than Ways and Means or Appropriations. The Rules Committee determines which bills will go to the floor of the House for a vote. They determine which amendments to the bill may be considered on the floor and the nature in which they may be considered. Finally, they determine the amount of time which will be given to debate for a particular bill or amendment. As you can see, they can pretty much control what gets done. Pelosi knows this (so has just about every other Speaker since the late 1800's) and uses it to its fullest advantage. Oh, if that's not enough, the Rules Committee is the only committee with significantly disproportionate representation from the majority party (9 D's and 4 R's).
So, H. Res 587 was introduced last night for consideration today. They unilaterally adopted an alternate version of H.R. 2454 in the form of H.R. 2998 with an additional amendment submitted by Waxman. They also rejected all alternate versions and amendments proposed by the Republicans except that of Randy Forbes (R-VA) in the form of H.R. 513 as an alternate version to ACES (in its new 2998/Waxman form). Did you follow that?! The full report from the committee can be read here (caution, it is 349 pages).
Why is the report 349 pages? Because it contains the text of the new Waxman amendment which was to be adopted as part of the official version of the bill for vote today. So, if you are keeping track... a few weeks back the bill was 932 pages; H.R. 2454 in its most recent form was 1092 pages; the alternate version of H.R. 2998 was 1201 pages and introduced on June 23 (three days ago); and the Waxman amendment was 310 pages of changes to the 1201 page version and was introduced last night. John Boehner (R-OH), the Minority Leader, indicated that the text became available at 3:09AM this morning.
Boehner, of course, felt this was all ridiculous. I'm not fan of Boehner, and the GOP has played the same dirty tricks in the past when they were in control, but I supported him in his frustration today. As mentioned earlier, the Rules Committee sets the amount of time allowed for debate on the floor of the House. Parliamentary procedures in the House lead to strict accordance to these time limits except when it comes to the Speaker, and the two Leaders. The three leaders are given as much time as they'd like as a matter of custom. For important bills, they usually are given the last word when each side only has one minute of time left. Boehner took full advantage today.
When Boehner began his speech in opposition to the legislation, he attempted to make it clear that voting on a 1200 page bill with a 300 page amendment made available only hours earlier was ludicrous. He made his point by speaking for over an hour reading "highlights" from the Waxman amendment which his staff no doubt had furiously gathered throughout the day. And he read a lot of "highlights" to the point where he addressed text on probably 100 of the 300 pages of the amendment. Waxman attempted to stop the virtual filibuster, but was unsuccessful (view the full 5+ hour debate on C-SPAN here or the Waxman interchange on YouTube here).
Once Boehner finally stopped talking, Pelosi gave a quick speech. The Forbes amendment was defeated, and the revised Waxman/ACES/2454/2998 bill passed narrowly (219-212). The vote details are not yet available on GovTrack - I will link them when they become available. If you can't wait, you can scroll through the details here.
This was an interesting saga, but I have to chime in here with some opinion. I found this episode disgusting. I find it disgusting that the majority had the audacity to push forward a huge bill which could not possibly have been read by those who voted for it. In fact, I would be surprised if even one member of Congress actually read the entire 300 page amendment, let alone the 1200 page bill. Further, having attempted to read legislation like this in the past myself, it is nearly impossible to comprehend legislation like this without having a copy of the U.S. Code sitting nearby since countless references are often made to existing laws.
If you seriously think that your Congress is representing you, then you are sadly mistaken. This goes for members of both sides of the aisle because the culture in Washington is the problem. Both sides have their staff with the assistance of lobbyists and other lawyers of special interest groups draft massive legislation which is not likely read by the members of Congress. Most bills are filled with provisions which are unrelated to the core legislation. There are countless other gimmicks and tricks used to get things done. All of it is played up on a grand stage where the two sides point fingers at each other - usually accusing the other side of intolerable acts which they committed themselves when in the reverse position (i.e. the GOP accusing the Dems of abusing their power as the majority when that is precisely what they did when they had power).
Please, I urge you to reflect on this. I can't square this circle. I can't reconcile how one could honestly think that this legislation was passed with open eyes. This is just one example. The Sunlight Foundation is an organization which is working to fight for more transparency in Washington. One of their initiatives is "Read the Bill" which would seek to urge/require Congress to wait at least 72 hours to vote on a bill after being published. This is not enough, but it is a start. I signed the petition tonight.
The short summary of the bill says that it will "create clean energy jobs, achieve energy independence, reduce global warming pollution and transition [the US] to a clean energy economy." The official long summary is quite long. The GOP will tell you that it will destroy our economy.
This legislation was officially introduced on May 15, but has been long anticipated since this session began in early January. Nancy Pelosi (D-CA) had vowed to get the bill passed before the July 4 recess in the House. As I had mentioned on this blog a few weeks ago, the bill checked in at 932 pages at the time. Henry Waxman (D-CA), chair of the House Committee on Energy and Commerce, admitted that he had not read the whole bill and hired a speed reader to read part of the bill in a committee hearing in an act of disturbing arrogance. See the link above for more details.
Over the last few weeks, the Democrats have been preparing to get the bill ready for a vote on the floor. It had been reported that the vote would be a close call. That brings us to the events last night and today. The powerful House Committee on Rules published H. Res. 587 late last night (well, early this morning) which laid out the nature of the debate which would be had today on the House Floor.
For those of you not familiar with the Rules Committee, I think it is arguably the most powerful committee in the House - more so than Ways and Means or Appropriations. The Rules Committee determines which bills will go to the floor of the House for a vote. They determine which amendments to the bill may be considered on the floor and the nature in which they may be considered. Finally, they determine the amount of time which will be given to debate for a particular bill or amendment. As you can see, they can pretty much control what gets done. Pelosi knows this (so has just about every other Speaker since the late 1800's) and uses it to its fullest advantage. Oh, if that's not enough, the Rules Committee is the only committee with significantly disproportionate representation from the majority party (9 D's and 4 R's).
So, H. Res 587 was introduced last night for consideration today. They unilaterally adopted an alternate version of H.R. 2454 in the form of H.R. 2998 with an additional amendment submitted by Waxman. They also rejected all alternate versions and amendments proposed by the Republicans except that of Randy Forbes (R-VA) in the form of H.R. 513 as an alternate version to ACES (in its new 2998/Waxman form). Did you follow that?! The full report from the committee can be read here (caution, it is 349 pages).
Why is the report 349 pages? Because it contains the text of the new Waxman amendment which was to be adopted as part of the official version of the bill for vote today. So, if you are keeping track... a few weeks back the bill was 932 pages; H.R. 2454 in its most recent form was 1092 pages; the alternate version of H.R. 2998 was 1201 pages and introduced on June 23 (three days ago); and the Waxman amendment was 310 pages of changes to the 1201 page version and was introduced last night. John Boehner (R-OH), the Minority Leader, indicated that the text became available at 3:09AM this morning.
Boehner, of course, felt this was all ridiculous. I'm not fan of Boehner, and the GOP has played the same dirty tricks in the past when they were in control, but I supported him in his frustration today. As mentioned earlier, the Rules Committee sets the amount of time allowed for debate on the floor of the House. Parliamentary procedures in the House lead to strict accordance to these time limits except when it comes to the Speaker, and the two Leaders. The three leaders are given as much time as they'd like as a matter of custom. For important bills, they usually are given the last word when each side only has one minute of time left. Boehner took full advantage today.
When Boehner began his speech in opposition to the legislation, he attempted to make it clear that voting on a 1200 page bill with a 300 page amendment made available only hours earlier was ludicrous. He made his point by speaking for over an hour reading "highlights" from the Waxman amendment which his staff no doubt had furiously gathered throughout the day. And he read a lot of "highlights" to the point where he addressed text on probably 100 of the 300 pages of the amendment. Waxman attempted to stop the virtual filibuster, but was unsuccessful (view the full 5+ hour debate on C-SPAN here or the Waxman interchange on YouTube here).
Once Boehner finally stopped talking, Pelosi gave a quick speech. The Forbes amendment was defeated, and the revised Waxman/ACES/2454/2998 bill passed narrowly (219-212). The vote details are not yet available on GovTrack - I will link them when they become available. If you can't wait, you can scroll through the details here.
This was an interesting saga, but I have to chime in here with some opinion. I found this episode disgusting. I find it disgusting that the majority had the audacity to push forward a huge bill which could not possibly have been read by those who voted for it. In fact, I would be surprised if even one member of Congress actually read the entire 300 page amendment, let alone the 1200 page bill. Further, having attempted to read legislation like this in the past myself, it is nearly impossible to comprehend legislation like this without having a copy of the U.S. Code sitting nearby since countless references are often made to existing laws.
If you seriously think that your Congress is representing you, then you are sadly mistaken. This goes for members of both sides of the aisle because the culture in Washington is the problem. Both sides have their staff with the assistance of lobbyists and other lawyers of special interest groups draft massive legislation which is not likely read by the members of Congress. Most bills are filled with provisions which are unrelated to the core legislation. There are countless other gimmicks and tricks used to get things done. All of it is played up on a grand stage where the two sides point fingers at each other - usually accusing the other side of intolerable acts which they committed themselves when in the reverse position (i.e. the GOP accusing the Dems of abusing their power as the majority when that is precisely what they did when they had power).
Please, I urge you to reflect on this. I can't square this circle. I can't reconcile how one could honestly think that this legislation was passed with open eyes. This is just one example. The Sunlight Foundation is an organization which is working to fight for more transparency in Washington. One of their initiatives is "Read the Bill" which would seek to urge/require Congress to wait at least 72 hours to vote on a bill after being published. This is not enough, but it is a start. I signed the petition tonight.
Thursday, June 25, 2009
Interstate Commerce? Seriously?
Did you know that one of the areas most significantly affected by so-called "hate crimes" is interstate commerce? Well, according to S. 909, introduced into the Senate by Sen. Ted Kennedy(D-MA) it is. The bill, titled the 'Matthew Shepard Hate Crimes Prevention Act,' states the following as point 6 of Section I:
(6) Such violence substantially affects interstate commerce in many ways, including the following:
(A) The movement of members of targeted groups is impeded, and members of such groups are forced to move across State lines to escape the incidence or risk of such violence.
(B) Members of targeted groups are prevented from purchasing goods and services, obtaining or sustaining employment, or participating in other commercial activity.
(C) Perpetrators cross State lines to commit such violence.
(D) Channels, facilities, and instrumentalities of interstate commerce are used to facilitate the commission of such violence.
(E) Such violence is committed using articles that have traveled in interstate commerce.
First of all, I have something of an issue with the whole "hate crimes" thing in that I don't understand why "hate crimes" have to be singled/separated out into their own legislation. A "hate crime" is still a crime; it's already a crime regardless of the motivation behind it. Sure, it's a horrible thing to beat up, or even kill, someone because you don't like the color of their skin but shouldn't it be horrible regardless? I could even see the case made that nearly all crimes, regardless of type or motivation, are rooted in "hate" in some shape or form.
But that's not really the point of the section I quoted above...I'm of the opinion that if a particular section/item/paragraph in a relatively "scholarly" piece of writing (I would consider written legislation to qualify here) makes you laugh out loud after reading it, it's probably garbage. There are, of course, exceptions--for instance, some things are clearly intended to be funny when read. I feel fairly confident in my assertion that written U.S. legislation is not typically used as a vehicle for overtly humorous statements, so I think it's safe to say that I take what I read in bills from the Congress to be intended to mean what they say.
It is in this light that I would ask the reader to consider the above quoted section--I will say that upon my first reading, I burst out laughing and felt certain that I had misread something. Interstate commerce?? Really? If hate crimes have such a significant impact on interstate commerce for the reasons they provide, I can hardly think of anything that WOULDN'T. I find this particularly interesting given the increasing encroachment of the federal government into the regulation of various activities by throwing out the justification that they "affect interstate commerce." This scares me--if the government can twist the issue of hate crime into something that impacts interstate commerce, there isn't much they can't.
(6) Such violence substantially affects interstate commerce in many ways, including the following:
(A) The movement of members of targeted groups is impeded, and members of such groups are forced to move across State lines to escape the incidence or risk of such violence.
(B) Members of targeted groups are prevented from purchasing goods and services, obtaining or sustaining employment, or participating in other commercial activity.
(C) Perpetrators cross State lines to commit such violence.
(D) Channels, facilities, and instrumentalities of interstate commerce are used to facilitate the commission of such violence.
(E) Such violence is committed using articles that have traveled in interstate commerce.
First of all, I have something of an issue with the whole "hate crimes" thing in that I don't understand why "hate crimes" have to be singled/separated out into their own legislation. A "hate crime" is still a crime; it's already a crime regardless of the motivation behind it. Sure, it's a horrible thing to beat up, or even kill, someone because you don't like the color of their skin but shouldn't it be horrible regardless? I could even see the case made that nearly all crimes, regardless of type or motivation, are rooted in "hate" in some shape or form.
But that's not really the point of the section I quoted above...I'm of the opinion that if a particular section/item/paragraph in a relatively "scholarly" piece of writing (I would consider written legislation to qualify here) makes you laugh out loud after reading it, it's probably garbage. There are, of course, exceptions--for instance, some things are clearly intended to be funny when read. I feel fairly confident in my assertion that written U.S. legislation is not typically used as a vehicle for overtly humorous statements, so I think it's safe to say that I take what I read in bills from the Congress to be intended to mean what they say.
It is in this light that I would ask the reader to consider the above quoted section--I will say that upon my first reading, I burst out laughing and felt certain that I had misread something. Interstate commerce?? Really? If hate crimes have such a significant impact on interstate commerce for the reasons they provide, I can hardly think of anything that WOULDN'T. I find this particularly interesting given the increasing encroachment of the federal government into the regulation of various activities by throwing out the justification that they "affect interstate commerce." This scares me--if the government can twist the issue of hate crime into something that impacts interstate commerce, there isn't much they can't.
Wednesday, June 24, 2009
Ooh...a conspiracy?!
As you may or may not have heard, sometime last week it was reported (although not widely--I heard about it on Glenn Beck) that police in Italy had seized $134 billion in U.S. government bearer bonds from two "Japanese nationals" who were trying to smuggle them across the Italy-Switzerland border in the false bottom of a suitcase. According to the Guardia di Finanza, Italy's tax police, the seizure consisted of 249 "Federal Reserve" bonds of $500 million each and 10 "Kennedy Bonds" of $1 billion each. There hasn't been much else reported about this since except that both the Italian authorities and U.S Treasury have concluded that the bonds are counterfeit, the U.S. examining the certificates first via fax and then via internet images. The Treasury also issued a statement indicating that since there is only $105 million in Treasury bearer bond securities outstanding, $134 billion is obviously not possible. The only other thing I've heard is that the "Japanese nationals" who were caught with the bonds are believed to have been released.
Admittedly, I don't know a whole lot about "bearer bonds" and the accounting process that goes along with these but given that the Treasury says that there are only $105 million in outstanding bonds, it seems pretty obvious that these are indeed counterfeits. What I found even more interesting was Glenn Beck's assertion on one of his programs that he felt that the culprits, for a variety of reasons, wanted to be caught. This seemed strange to me and prompted me to do some more research on the whole situation, out of curiosity, and I happened upon something from the World War II era called "Operation Bernhard," that I had never heard of before. It casts this current situation in a bit of a different light...it's likely nothing but it was interesting nonetheless.
Operation Bernhard was a secret German operation during World War II whose goal was to produce a large number of counterfeit British currency and circulate it through Britain, thereby destabilizing the British economy. According to the wikipedia entry, it is the "largest counterfeiting operation in history" and has been the subject of many books and even a movie. The operation was named after its director, SS Major Bernhard Kruger, who organized it at a concentration camp and "staffed" it with camp inmates. Apparently, the plan was originally to drop the counterfeit notes out of planes flying over Britain but, after it was determined that this would not be feasible, the notes were eventually used by the Germans to purchase items and pay personnel. The entire counterfeiting plan never was fully realized and ended with the closing of the Sachsenhausen camp in 1945, but by this time the Bank of England had become aware of some of the counterfeit notes and called them "the most dangerous ever seen." The wikipedia article again states that by the time of the camp's closing, "the printing press had produced 8,965,080 banknotes with a total value of 134,610,810 pounds" and that the "notes are considered among the most perfect counterfeits ever produced, being almost impossible to distinguish from the real currency."
Reading about this really got me to thinking about what Beck had said about the two smugglers who were recently caught wanting to be caught. I don't know about anyone else, but when I think of "counterfeiters" I think of the mafia or a shady operation in back room somewhere (these could still be "large" operations) who want to be able to "get rich," not a government entity "authorizing," whether implicitly or explicitly, a massive counterfeiting operation with the goal of destabilizing the economy of a rival nation. I'm probably way off, but somehow this seems much more sinister.
So, what about this most recent incident? Well, there is already little confidence in the U.S. economy amongst most of the rest of the world. It seems to me that the discovery of a large-scale operation counterfeiting U.S. currency or bonds, or several large-scale operations--that the U.S. government essentially had no knowledge of--would certainly shake this confidence even further. Of course, there's probably still a great deal more to this story but if the government didn't know much about this before the seizure of the bonds in Italy it certainly seems possible that this counterfeit is likely in circulation in the U.S. already. I don't believe that the intent now would be to flood the U.S. with actual bogus paper bills but that such discoveries themselves would be enough today to help push the U.S. economy "over the edge" so to speak.
I admit that I myself find this unlikely but it's an interesting thought nonetheless. There are certainly some nations and/or governments who would likely have an interest in further disruption of the U.S. economy. And just to be clear, I'm not suggesting Japan--the "fact" that the culprits in this incident were reported to be Japanese has actually not been confirmed and even if they were, it's entirely possible they were working on the behalf of another entity. Anyway, I really just found the whole situation interesting and the new thinking about it that Operation Bernhard prompted. It's probably nothing, but you never know...
Admittedly, I don't know a whole lot about "bearer bonds" and the accounting process that goes along with these but given that the Treasury says that there are only $105 million in outstanding bonds, it seems pretty obvious that these are indeed counterfeits. What I found even more interesting was Glenn Beck's assertion on one of his programs that he felt that the culprits, for a variety of reasons, wanted to be caught. This seemed strange to me and prompted me to do some more research on the whole situation, out of curiosity, and I happened upon something from the World War II era called "Operation Bernhard," that I had never heard of before. It casts this current situation in a bit of a different light...it's likely nothing but it was interesting nonetheless.
Operation Bernhard was a secret German operation during World War II whose goal was to produce a large number of counterfeit British currency and circulate it through Britain, thereby destabilizing the British economy. According to the wikipedia entry, it is the "largest counterfeiting operation in history" and has been the subject of many books and even a movie. The operation was named after its director, SS Major Bernhard Kruger, who organized it at a concentration camp and "staffed" it with camp inmates. Apparently, the plan was originally to drop the counterfeit notes out of planes flying over Britain but, after it was determined that this would not be feasible, the notes were eventually used by the Germans to purchase items and pay personnel. The entire counterfeiting plan never was fully realized and ended with the closing of the Sachsenhausen camp in 1945, but by this time the Bank of England had become aware of some of the counterfeit notes and called them "the most dangerous ever seen." The wikipedia article again states that by the time of the camp's closing, "the printing press had produced 8,965,080 banknotes with a total value of 134,610,810 pounds" and that the "notes are considered among the most perfect counterfeits ever produced, being almost impossible to distinguish from the real currency."
Reading about this really got me to thinking about what Beck had said about the two smugglers who were recently caught wanting to be caught. I don't know about anyone else, but when I think of "counterfeiters" I think of the mafia or a shady operation in back room somewhere (these could still be "large" operations) who want to be able to "get rich," not a government entity "authorizing," whether implicitly or explicitly, a massive counterfeiting operation with the goal of destabilizing the economy of a rival nation. I'm probably way off, but somehow this seems much more sinister.
So, what about this most recent incident? Well, there is already little confidence in the U.S. economy amongst most of the rest of the world. It seems to me that the discovery of a large-scale operation counterfeiting U.S. currency or bonds, or several large-scale operations--that the U.S. government essentially had no knowledge of--would certainly shake this confidence even further. Of course, there's probably still a great deal more to this story but if the government didn't know much about this before the seizure of the bonds in Italy it certainly seems possible that this counterfeit is likely in circulation in the U.S. already. I don't believe that the intent now would be to flood the U.S. with actual bogus paper bills but that such discoveries themselves would be enough today to help push the U.S. economy "over the edge" so to speak.
I admit that I myself find this unlikely but it's an interesting thought nonetheless. There are certainly some nations and/or governments who would likely have an interest in further disruption of the U.S. economy. And just to be clear, I'm not suggesting Japan--the "fact" that the culprits in this incident were reported to be Japanese has actually not been confirmed and even if they were, it's entirely possible they were working on the behalf of another entity. Anyway, I really just found the whole situation interesting and the new thinking about it that Operation Bernhard prompted. It's probably nothing, but you never know...
Monday, June 22, 2009
World Bank Sinks the Market... Really?
Today was a rough day on Wall Street - at least for those who want to see stock prices go up. The latest report from the World Bank (a topic for another day) is being "blamed" for the sell off as their view on the global economy was dim.
The World Bank released the Global Development Finance 2009 report stating that global growth in GDP is estimated to be -2.9%. Their previous estimate was -1.7%. You can read today's press release here. The interesting phenomenon is that World Bank President Robert Zoellick had already let the cat out of the bag on June 11 in a speech in Washington. Read the press release here.
So, I'm a bit puzzled. Today's news was not really news. Yet, if you follow headlines like I do, you would think that this report was surprising and catastrophic triggering a stock market sell-off. Maybe I'm overreacting, but I think the media collectively decided to use this as an excuse to explain the lack of green shoots today.
On a semi-related note... if you were the owner of a company and had appointed a CEO to run the company on your behalf, wouldn't you feel a bit slighted, misled, or lied to if said CEO did not disclose that he had a liver transplant while on medical leave for the past few months? I would. But, that's just what happened with Apple CEO Steve Jobs. So much for market transparency.
The World Bank released the Global Development Finance 2009 report stating that global growth in GDP is estimated to be -2.9%. Their previous estimate was -1.7%. You can read today's press release here. The interesting phenomenon is that World Bank President Robert Zoellick had already let the cat out of the bag on June 11 in a speech in Washington. Read the press release here.
So, I'm a bit puzzled. Today's news was not really news. Yet, if you follow headlines like I do, you would think that this report was surprising and catastrophic triggering a stock market sell-off. Maybe I'm overreacting, but I think the media collectively decided to use this as an excuse to explain the lack of green shoots today.
On a semi-related note... if you were the owner of a company and had appointed a CEO to run the company on your behalf, wouldn't you feel a bit slighted, misled, or lied to if said CEO did not disclose that he had a liver transplant while on medical leave for the past few months? I would. But, that's just what happened with Apple CEO Steve Jobs. So much for market transparency.
Quit complaining...maybe give your Congressperson a hug instead
I admit that I quite enjoy browsing through the GovTrack "Introduced Legislation" feed that I follow in my Google Reader...it's amazing some of the bills I see there (from title alone). Some of them I've pointed out in previous posts. Yesterday, I came across another that, after reading the full text, I feel that I am obligated to share it here in toto. The bill is H. Con. Res. 155 introduced by Rep. Emanuel Cleaver, D-MO.
Supporting the goals and ideals of 'Complaint Free Wednesday'.
Whereas the average person complains approximately 15 to 30 times per day, resulting in roughly 4,500,000,000 complaints spoken every day in the United States;
Whereas complaining keeps people focused on current problems stultifying their innate abilities to seek and create positive, harmonious solutions;
Whereas complaining has been shown by research psychologists to be detrimental to a person's physical and emotional health, relationships, and to limit their career success;
Whereas the 'A Complaint Free World' organization is to be recognized for its efforts to encourage people to redirect their minds toward more positive, constructive, and rewarding lives and for its goal to positively inspire at least 1 percent of the global population (60 million people) to become complaint free;
Whereas thousands of people across the United States, including many students, have already adopted the complaint free attitude; and
Whereas 'Complaint Free Wednesday' will be observed on the day before Thanksgiving, providing each person in the United States a day free from complaining in order to prepare for a day of gratitude: Now, therefore, be it
Resolved by the House of Representatives (the Senate concurring), That Congress--
(1) supports the goals and ideals of Complaint Free Wednesday;
(2) encourages each person in the United States to remember that having a positive life begins with having a positive attitude; and
(3) recognizes and reaffirms the meaning of Thanksgiving by asking each person in the United States to use 'Complaint Free Wednesday' to refrain from complaining and prepare for a day of gratitude.
Sigh...I find it sad that I'm no longer surprised to find this sort of thing as an official piece of legislation introduced in our Congress. A few notes--I found it quite amusing that the text of the bill makes it seem like the 4.5 billion "complaints spoken every day in the United States" is an outrageously large number when, compared with the huge numbers found in the recent relief and stimulus programs, it's really a drop in the bucket. Yes, I realize that there's not really a comparison between "complaints" and dollars but what I'm talking about is the undertone I detect there. Maybe I'm just nuts. I also thought it was pretty darn funny that they're encouraging us to "stop complaining" when I'm guessing the government is behind (in some fashion) most of the things that are complained about!
If you have some time, I'd highly recommend checking out the webpage for the aforementioned 'A Complaint Free World' organization...very amusing.
Supporting the goals and ideals of 'Complaint Free Wednesday'.
Whereas the average person complains approximately 15 to 30 times per day, resulting in roughly 4,500,000,000 complaints spoken every day in the United States;
Whereas complaining keeps people focused on current problems stultifying their innate abilities to seek and create positive, harmonious solutions;
Whereas complaining has been shown by research psychologists to be detrimental to a person's physical and emotional health, relationships, and to limit their career success;
Whereas the 'A Complaint Free World' organization is to be recognized for its efforts to encourage people to redirect their minds toward more positive, constructive, and rewarding lives and for its goal to positively inspire at least 1 percent of the global population (60 million people) to become complaint free;
Whereas thousands of people across the United States, including many students, have already adopted the complaint free attitude; and
Whereas 'Complaint Free Wednesday' will be observed on the day before Thanksgiving, providing each person in the United States a day free from complaining in order to prepare for a day of gratitude: Now, therefore, be it
Resolved by the House of Representatives (the Senate concurring), That Congress--
(1) supports the goals and ideals of Complaint Free Wednesday;
(2) encourages each person in the United States to remember that having a positive life begins with having a positive attitude; and
(3) recognizes and reaffirms the meaning of Thanksgiving by asking each person in the United States to use 'Complaint Free Wednesday' to refrain from complaining and prepare for a day of gratitude.
Sigh...I find it sad that I'm no longer surprised to find this sort of thing as an official piece of legislation introduced in our Congress. A few notes--I found it quite amusing that the text of the bill makes it seem like the 4.5 billion "complaints spoken every day in the United States" is an outrageously large number when, compared with the huge numbers found in the recent relief and stimulus programs, it's really a drop in the bucket. Yes, I realize that there's not really a comparison between "complaints" and dollars but what I'm talking about is the undertone I detect there. Maybe I'm just nuts. I also thought it was pretty darn funny that they're encouraging us to "stop complaining" when I'm guessing the government is behind (in some fashion) most of the things that are complained about!
If you have some time, I'd highly recommend checking out the webpage for the aforementioned 'A Complaint Free World' organization...very amusing.
Sunday, June 21, 2009
Loose Ends... Vol. XLVIII
Another empty post tonight. I was struggling to come up with some meaningful items to discuss tonight. I've spent the last hour or so researching various aspects of the situation in Iran. An attempt to post anything of meaning on this subject tonight would be a dis-service to readers.
Happy Father's Day!
Happy Father's Day!
Friday, June 19, 2009
The Return of Doctor No
Today, we saw the return of Dr. No in the form of Rep. Ron Paul (R-TX). Before the floor of the House today, Paul cast the only "Nay" vote in H. Res. 560; full text follows:
On the surface, it may seem that this resolution is necessary to support democracy and condemn state-sponsored violence in Iran. After all, we all know that Mahmoud Ahmadinejad is pure evil (that is sarcasm). Why did Dr. Paul choose to vote against the resolution? Here is the full text of his statement in opposition:
1. March 11, H. Res. 226 - Recognizing the plight of the Tibetan people on the 50th anniversary of His Holiness the Dalai Lama being forced into exile and calling for a sustained multilateral effort to bring about a durable and peaceful solution to the Tibet issue.
2. March 31, H. Res. 282 - Recognizing the 30th anniversary of the peace treaty between Egypt and Israel.
3. April 28, H. Res. 1243 - To provide for the award of a gold medal on behalf of Congress to Arnold Palmer in recognition of his service to the Nation in promoting excellence and good sportsmanship in golf.
4. June 2, H. Res. 489 - Recognizing the twentieth anniversary of the suppression of protesters and citizens in and around Tiananmen Square in Beijing, People's Republic of China, on June 3 and 4, 1989 and expressing sympathy to the families of those killed, tortured, and imprisoned in connection with the democracy protests in Tiananmen Square and other parts of China on June 3 and 4, 1989 and thereafter.
Expressing support for all Iranian citizens who embrace the values of freedom, human rights, civil liberties, and rule of law, and for other purposes.
Resolved, That the House of Representatives--
(1) expresses its support for all Iranian citizens who embrace the values of freedom, human rights, civil liberties, and rule of law;
(2) condemns the ongoing violence against demonstrators by the Government of Iran and pro-government militias, as well as the ongoing government suppression of independent electronic communication through interference with the Internet and cellphones; and
(3) affirms the universality of individual rights and the importance of democratic and fair elections.
Paul has received the nickname "Dr. No" due to his frequent status as the sole objector to House legislation (often resolutions) while having a medical degree. Today's vote was already the fifth time in the 111th Congress (since January 2009) where Paul was the lone dissenter. A list of the previous four follows:I rise in reluctant opposition to H Res 560, which condemns the Iranian government for its recent actions during the unrest in that country. While I never condone violence, much less the violence that governments are only too willing to mete out to their own citizens, I am always very cautious about “condemning” the actions of governments overseas. As an elected member of the United States House of Representatives, I have always questioned our constitutional authority to sit in judgment of the actions of foreign governments of which we are not representatives. I have always hesitated when my colleagues rush to pronounce final judgment on events thousands of miles away about which we know very little. And we know very little beyond limited press reports about what is happening in Iran.Of course I do not support attempts by foreign governments to suppress the democratic aspirations of their people, but when is the last time we condemned Saudi Arabia or Egypt or the many other countries where unlike in Iran there is no opportunity to exercise any substantial vote on political leadership? It seems our criticism is selective and applied when there are political points to be made. I have admired President Obama’s cautious approach to the situation in Iran and I would have preferred that we in the House had acted similarly.I adhere to the foreign policy of our Founders, who advised that we not interfere in the internal affairs of countries overseas. I believe that is the best policy for the United States, for our national security and for our prosperity. I urge my colleagues to reject this and all similar meddling resolutions.
1. March 11, H. Res. 226 - Recognizing the plight of the Tibetan people on the 50th anniversary of His Holiness the Dalai Lama being forced into exile and calling for a sustained multilateral effort to bring about a durable and peaceful solution to the Tibet issue.
2. March 31, H. Res. 282 - Recognizing the 30th anniversary of the peace treaty between Egypt and Israel.
3. April 28, H. Res. 1243 - To provide for the award of a gold medal on behalf of Congress to Arnold Palmer in recognition of his service to the Nation in promoting excellence and good sportsmanship in golf.
4. June 2, H. Res. 489 - Recognizing the twentieth anniversary of the suppression of protesters and citizens in and around Tiananmen Square in Beijing, People's Republic of China, on June 3 and 4, 1989 and expressing sympathy to the families of those killed, tortured, and imprisoned in connection with the democracy protests in Tiananmen Square and other parts of China on June 3 and 4, 1989 and thereafter.
Wednesday, June 17, 2009
Flabbergasted
That about sums it up.
Yesterday, Congress passed H.R. 2346 - the Supplemental Appropriations Act of 2009. Why am I so flabbergasted? Let me count the ways...
First, this bill provides over $100B in supplemental funding to continue the wars in Iraq and Afghanistan. It provides no substantive provisions which would serve as "strings attached" such as a timetable for troop withdrawal. Additionally, it provides (by my quick reading and research) a lot ($75B?) of funding to the International Monetary Fund (IMF) to assist in global bailouts and the like.
Second, I tried to research this bill in more detail so that I would be able to provide quality, objective insight to its details. This thing is a mess. It is long and riddled with changes from the original House version to the Senate version (which appears to be the one which the House agreed to yesterday). I unfortunately do not have the time to dedicate to this type of research.
Third, this thing originally passed the House with overwhelming bipartisan support on May 14. It then passed the Senate (after significant amendment) on May 21, again with overwhelming bipartisan support. Yesterday, the House voted upon the bill as referred by the conference committee. (My understanding of this is that the House voted on the Senate version as-is with no changes coming from the conference committee since there will be no additional vote in the Senate. I stand to be corrected on this point.) This time, the vote was pretty much on party line - passing 226-202. This flip-flop is bothersome. What suddenly drove almost all House Republicans to decide that the bill which they previously supported and received GOP support in the Senate in its current form to change their mind?
Well, that leads me to point number four. The GOP is now (after years of supporting the Bush administration) deciding that we cannot afford more spending on the wars in Iraq. Further, after supporting the IMF under the Bush administration (and in the Senate), the GOP has decided we cannot afford that any more either. Now, I happen to agree with the "Nay" vote, but this is the either the height of hypocrisy or a tacit admission of historical stupidity by many House Republicans.
On a related note, irritant number five is the response by House Democrats. Only thirty-two brave souls stepped away from the party line to oppose this bill. I'd love to spend the time to see how well this group matches up to those who opposed supplemental war funding under Bush. Actually, I'm more interested in seeing those who opposed Bush's requests but now support the same request from Obama. By the way, fifty-one Democrats opposed this bill back in May.
I'm sure there are more things about this that irritate me, but we'll leave it at that. I urge my readers to wake up, recognize that Washington is full of hypocrites who only want to play games and spend your money. Tell your friends. Demand change and vote your representatives out of office.
Yesterday, Congress passed H.R. 2346 - the Supplemental Appropriations Act of 2009. Why am I so flabbergasted? Let me count the ways...
First, this bill provides over $100B in supplemental funding to continue the wars in Iraq and Afghanistan. It provides no substantive provisions which would serve as "strings attached" such as a timetable for troop withdrawal. Additionally, it provides (by my quick reading and research) a lot ($75B?) of funding to the International Monetary Fund (IMF) to assist in global bailouts and the like.
Second, I tried to research this bill in more detail so that I would be able to provide quality, objective insight to its details. This thing is a mess. It is long and riddled with changes from the original House version to the Senate version (which appears to be the one which the House agreed to yesterday). I unfortunately do not have the time to dedicate to this type of research.
Third, this thing originally passed the House with overwhelming bipartisan support on May 14. It then passed the Senate (after significant amendment) on May 21, again with overwhelming bipartisan support. Yesterday, the House voted upon the bill as referred by the conference committee. (My understanding of this is that the House voted on the Senate version as-is with no changes coming from the conference committee since there will be no additional vote in the Senate. I stand to be corrected on this point.) This time, the vote was pretty much on party line - passing 226-202. This flip-flop is bothersome. What suddenly drove almost all House Republicans to decide that the bill which they previously supported and received GOP support in the Senate in its current form to change their mind?
Well, that leads me to point number four. The GOP is now (after years of supporting the Bush administration) deciding that we cannot afford more spending on the wars in Iraq. Further, after supporting the IMF under the Bush administration (and in the Senate), the GOP has decided we cannot afford that any more either. Now, I happen to agree with the "Nay" vote, but this is the either the height of hypocrisy or a tacit admission of historical stupidity by many House Republicans.
On a related note, irritant number five is the response by House Democrats. Only thirty-two brave souls stepped away from the party line to oppose this bill. I'd love to spend the time to see how well this group matches up to those who opposed supplemental war funding under Bush. Actually, I'm more interested in seeing those who opposed Bush's requests but now support the same request from Obama. By the way, fifty-one Democrats opposed this bill back in May.
I'm sure there are more things about this that irritate me, but we'll leave it at that. I urge my readers to wake up, recognize that Washington is full of hypocrites who only want to play games and spend your money. Tell your friends. Demand change and vote your representatives out of office.
Sunday, June 14, 2009
Loose Ends... Vol. XLVII
It's now been ten days since Barack Obama's speech in Cairo. I've finally taken the time out to read the transcript - you can read it here. Obama focused on "a new beginning" between the U.S. and the Muslim world. He concentrated on seven key issues...
1. Violent Extremism: Obama stated that the U.S. is "not at war with Islam" and that the war in Afghanistan is a "necessity" while the Iraq War was one of "choice." I'm very concerned with his basic criteria for success in Afghanistan that "we would bring every [troop] home if we could be confident that there were not violent extremists in Afghanistan and now Pakistan determined to kill as many Americans as they possibly can." To me, this is an unachievable goal - especially, considering our policy to be at war in these countries.
2. Israel and Palestine: Obama called for a two-state solution with an independent Palestine living alongside Israel in peace. He called America's bond with Israel "unbreakable" and based upon "cultural and historical ties, and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied." Well, that makes it clear to me! This is the basis for our alliance with Israel? Despite the special relationship with Israel, Obama did call for Israel to put a stop to settlements in the West Bank. This placed Prime Minister Benjamin Netanyahu in a precarious position which he addressed in a speech this weekend (more below).
3. Nuclear Weapons: Obama, the leader of the country with the largest military budget and most nuclear weapons in the world, dreamed of a world with no nuclear weapons. He acknowledged Iran's right to pursue nuclear energy, stated that "no single nation should pick and choose which nation holds nuclear weapons," but said that Iran cannot have nukes (while not explicitly saying those words).
4. Democracy: Here Obama stated that "no system of government can or should be imposed by one nation by any other." Nice words, but I am skeptical that we will follow through on that.
5. Religious Freedom: Kumbaya stuff.
6. Women's Rights: More kumbaya.
7. Economic Development and Opportunity.
Overall, I thought it was a good speech, but will likely lead to undelivered promises. American relations with the Muslim world has been filled with tension for decades. One speech will not make a difference, but could lead to a new beginning. Obama addressed some of the issues which have led to the tension (such as our participation in the 1953 coup d'etat in Iran), but did not go so far as an outright apology. He also reiterated our commitment to the continuation of policies which have contributed to the tension. We will watch this as it unfolds with great interest.
*****
As noted, Israeli Prime Minister Benjamin Netanyahu delivered an important speech this weekend which addressed the way forward in Israeli-Palestinian relations juxtaposed against Obama's speech in Cairo. The full text can be read here. Netanyahu, generally considered more hawkish towards and less supportive of the Palestinians, stated he would support a Palestinian state. However, there were a lot of conditions which are unlikely. A summary can be read here.
*****
The special session is underway in the Indiana legislature with the key goal of passing a budget. I will try to follow this more closely over the coming weeks.
1. Violent Extremism: Obama stated that the U.S. is "not at war with Islam" and that the war in Afghanistan is a "necessity" while the Iraq War was one of "choice." I'm very concerned with his basic criteria for success in Afghanistan that "we would bring every [troop] home if we could be confident that there were not violent extremists in Afghanistan and now Pakistan determined to kill as many Americans as they possibly can." To me, this is an unachievable goal - especially, considering our policy to be at war in these countries.
2. Israel and Palestine: Obama called for a two-state solution with an independent Palestine living alongside Israel in peace. He called America's bond with Israel "unbreakable" and based upon "cultural and historical ties, and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied." Well, that makes it clear to me! This is the basis for our alliance with Israel? Despite the special relationship with Israel, Obama did call for Israel to put a stop to settlements in the West Bank. This placed Prime Minister Benjamin Netanyahu in a precarious position which he addressed in a speech this weekend (more below).
3. Nuclear Weapons: Obama, the leader of the country with the largest military budget and most nuclear weapons in the world, dreamed of a world with no nuclear weapons. He acknowledged Iran's right to pursue nuclear energy, stated that "no single nation should pick and choose which nation holds nuclear weapons," but said that Iran cannot have nukes (while not explicitly saying those words).
4. Democracy: Here Obama stated that "no system of government can or should be imposed by one nation by any other." Nice words, but I am skeptical that we will follow through on that.
5. Religious Freedom: Kumbaya stuff.
6. Women's Rights: More kumbaya.
7. Economic Development and Opportunity.
Overall, I thought it was a good speech, but will likely lead to undelivered promises. American relations with the Muslim world has been filled with tension for decades. One speech will not make a difference, but could lead to a new beginning. Obama addressed some of the issues which have led to the tension (such as our participation in the 1953 coup d'etat in Iran), but did not go so far as an outright apology. He also reiterated our commitment to the continuation of policies which have contributed to the tension. We will watch this as it unfolds with great interest.
*****
As noted, Israeli Prime Minister Benjamin Netanyahu delivered an important speech this weekend which addressed the way forward in Israeli-Palestinian relations juxtaposed against Obama's speech in Cairo. The full text can be read here. Netanyahu, generally considered more hawkish towards and less supportive of the Palestinians, stated he would support a Palestinian state. However, there were a lot of conditions which are unlikely. A summary can be read here.
*****
The special session is underway in the Indiana legislature with the key goal of passing a budget. I will try to follow this more closely over the coming weeks.
Thursday, June 11, 2009
No smoking
Today, the Senate voted 79-17 to pass H.R. 1256, AKA the "Family Smoking Prevention and Tobacco Control Act." This vote sends the bill back to the House for a vote there; if it's passed by the House it goes directly to President Obama to sign. The Senate version of the bill is quite similar to the original House version which passed 298-112 (21 no votes) so it seems rather likely that it will pass.
This is the federal government's latest attempt to essentially FORCE people to stop smoking, of course in a roundabout way. Unfortunately, it seems to me that the bill will likely pass and when it does, there will be yet another example of the government butting its way into all facets of our lives and telling us what to do...each passage of such a bill, I think, moves us closer and closer to socialism. And we're already too close...
In the name of "protecting children" and "protecting America," the bill will place tobacco products under the supervision of the FDA, who would be charged with evaluating the content of tobacco products and then ORDERING CHANGES to those deemed "a danger to public health." Note here the extremely ambiguous phrase "danger to public health." That is just begging to be abused...who's to say what is dangerous to public health? I'm also betting the federal government won't label something like Viagra as a threat to public health...they'd lose too many contributions from Pfizer.
The bill also particularly singles out practices by tobacco manufacturers that are said to be geared toward attracting new, young smokers. This includes prohibiting "candy or other flavors" in cigarettes, prohibiting the labeling of cigarettes as "light" or "mild," and restricting advertising in certain publications that are geared toward a teenage audience. In the end, this all leads to giving the FDA the ultimate decision in whether or not a new tobacco product will be allowed to go on the market--if the FDA doesn't approve, then it doesn't happen.
Now, it seems to me that cigarettes, etc. don't really fall under the category of either "food" or "drugs" so it doesn't seem like the FDA has any business regulating tobacco products. The Republican leader of the opposition to the bill, Sen. Richard Burr of North Carolina, proposed an amendment that would create an entirely new agency to regulate tobacco products. I certainly don't like or agree with the idea of creating more government agencies and increasing government regulation but I'm guessing that the opposition saw that the bill was going to pass regardless and attempted to at least make an effort at something less restrictive. That effort, not surprisingly, failed.
In closing, here are a few quotes from the proponents of this bill in the Senate, as well as President Obama--
"This is a bill that will protect children and will protect America. Every day that we don't act, 3,500 American kids -- children -- will light up for the first time. That is enough to fill 70 school buses." --Sen. Dick Durbin, D-Ill.
"This bill may do more in the area of prevention, if adopted, than anything else we may include in the health care bill in the short term." --Sen. Christopher Dodd, D-Conn.
Commenting on the impending passage of the bill, President Obama said that the bill "will make history by giving the scientists and medical experts at the FDA the power to take sensible steps."
This is the federal government's latest attempt to essentially FORCE people to stop smoking, of course in a roundabout way. Unfortunately, it seems to me that the bill will likely pass and when it does, there will be yet another example of the government butting its way into all facets of our lives and telling us what to do...each passage of such a bill, I think, moves us closer and closer to socialism. And we're already too close...
In the name of "protecting children" and "protecting America," the bill will place tobacco products under the supervision of the FDA, who would be charged with evaluating the content of tobacco products and then ORDERING CHANGES to those deemed "a danger to public health." Note here the extremely ambiguous phrase "danger to public health." That is just begging to be abused...who's to say what is dangerous to public health? I'm also betting the federal government won't label something like Viagra as a threat to public health...they'd lose too many contributions from Pfizer.
The bill also particularly singles out practices by tobacco manufacturers that are said to be geared toward attracting new, young smokers. This includes prohibiting "candy or other flavors" in cigarettes, prohibiting the labeling of cigarettes as "light" or "mild," and restricting advertising in certain publications that are geared toward a teenage audience. In the end, this all leads to giving the FDA the ultimate decision in whether or not a new tobacco product will be allowed to go on the market--if the FDA doesn't approve, then it doesn't happen.
Now, it seems to me that cigarettes, etc. don't really fall under the category of either "food" or "drugs" so it doesn't seem like the FDA has any business regulating tobacco products. The Republican leader of the opposition to the bill, Sen. Richard Burr of North Carolina, proposed an amendment that would create an entirely new agency to regulate tobacco products. I certainly don't like or agree with the idea of creating more government agencies and increasing government regulation but I'm guessing that the opposition saw that the bill was going to pass regardless and attempted to at least make an effort at something less restrictive. That effort, not surprisingly, failed.
In closing, here are a few quotes from the proponents of this bill in the Senate, as well as President Obama--
"This is a bill that will protect children and will protect America. Every day that we don't act, 3,500 American kids -- children -- will light up for the first time. That is enough to fill 70 school buses." --Sen. Dick Durbin, D-Ill.
"This bill may do more in the area of prevention, if adopted, than anything else we may include in the health care bill in the short term." --Sen. Christopher Dodd, D-Conn.
Commenting on the impending passage of the bill, President Obama said that the bill "will make history by giving the scientists and medical experts at the FDA the power to take sensible steps."
Tuesday, June 9, 2009
More On Chrysler
If you haven't already heard, the Supreme Court has lifted the stay which had put the Fiat sale on hold. Earlier today, Fiat CEO Sergio Marchionne stated that they would not walk away from the deal. That did not matter however as the high court's decision was unanimous. You can review the actions of the court at SCOTUS blog.
I've heard a little bit today both from the local media and the MSM regarding the issue before the court both before and after the decision was rendered. I have to say that either I'm totally missing something or the media is either dumb or dishonest (I won't rule out both). However, a couple of people I have some respect for as commentators (Abdul Hakim-Shabbaz and Judge Andrew Napolitano) are on the list, so maybe I just don't get it.
I did a good deal of research on the Chrysler bankruptcy (read here), and while I don't necessarily like the outcome, the government-supported-pro-UAW-Fiat-Sale looks to be legal. I'm not surprised that the Supreme Court has dismissed the grievances - especially based on the legal merit of the case.
The 363 sale, as I understand it, has become more common in bankruptcy and occurs outside of the restructuring or liquidation which happens in Chapters 11 and 7 respectively. I'd best describe it as a hybrid of restructuring and liquidation where an outside bidder submits a "super bid" for most of the bankrupt company. As long as a) it is the best available bid, b) the bankrupt company and debtors-in-possession agree to the sale, and c) the value of the assets could decline substantially in the absence of a sale. (Note: Judge Gonzalez's ruling provides a more detailed and accurate explanation and can be read in full if desired - I've linked to it in my previous article linked above. Alternatively, you can Google "criteria for a 363 sale" or something of that sort.) The Fiat transaction meets these criteria.
It is unfortunate that the U.S. government is playing such a heavy hand by financing the Old Chrysler, helping fund Fiat in creating the New Chrysler, and putting pressure on the big name creditors who have received TARP money. But, this is where the Indiana Funds probably lack standing. The notion of standing is one which is bothersome to me in general. I understand why standing is required so that we avoid clogging up the courts with frivolous lawsuits, but it seems that some fundamental Constitutional questions remain unchallenged since no one has standing.
Ok. Anyways... I'd love it if some bankruptcy and constitutional experts happen to come across this post and can chime in. But, as I see it, the senior secured creditors may be losing out in this deal, but it appears to be both legal and their best available option. And, yes, the UAW VEBA is making out quite nicely (on a relative basis), but this is due to an independent deal struck with "New Chrysler" (supported by both Fiat and the U.S. and Canadian governments) and outside of the purview of the bankruptcy itself. The proceeds from liquidating the assets which will remain with the Old Chrysler as well as the $2B paid by the New Chrysler will be paid to the secured creditors under "normal" bankruptcy law (i.e. they are paid before the unsecured creditors or equity holders).
By the way, I do agree that this whole mess will have implications of sort on the desirability of investing in the bond market. However, the 363 sale is legal, has been widely used in other cases, and can "screw" secured creditors. This highly publicized case may place pressure on the future use of 363 sales and/or introduce higher interest rates (and more risk) on corporate bonds.
If you want to read even more details on the ins and outs of bankruptcy, Credit Slips is a very good site. Incidentally, Elizabeth Warren, the chair of the Congressional Oversight Panel for TARP, is a contributor.
I've heard a little bit today both from the local media and the MSM regarding the issue before the court both before and after the decision was rendered. I have to say that either I'm totally missing something or the media is either dumb or dishonest (I won't rule out both). However, a couple of people I have some respect for as commentators (Abdul Hakim-Shabbaz and Judge Andrew Napolitano) are on the list, so maybe I just don't get it.
I did a good deal of research on the Chrysler bankruptcy (read here), and while I don't necessarily like the outcome, the government-supported-pro-UAW-Fiat-Sale looks to be legal. I'm not surprised that the Supreme Court has dismissed the grievances - especially based on the legal merit of the case.
The 363 sale, as I understand it, has become more common in bankruptcy and occurs outside of the restructuring or liquidation which happens in Chapters 11 and 7 respectively. I'd best describe it as a hybrid of restructuring and liquidation where an outside bidder submits a "super bid" for most of the bankrupt company. As long as a) it is the best available bid, b) the bankrupt company and debtors-in-possession agree to the sale, and c) the value of the assets could decline substantially in the absence of a sale. (Note: Judge Gonzalez's ruling provides a more detailed and accurate explanation and can be read in full if desired - I've linked to it in my previous article linked above. Alternatively, you can Google "criteria for a 363 sale" or something of that sort.) The Fiat transaction meets these criteria.
It is unfortunate that the U.S. government is playing such a heavy hand by financing the Old Chrysler, helping fund Fiat in creating the New Chrysler, and putting pressure on the big name creditors who have received TARP money. But, this is where the Indiana Funds probably lack standing. The notion of standing is one which is bothersome to me in general. I understand why standing is required so that we avoid clogging up the courts with frivolous lawsuits, but it seems that some fundamental Constitutional questions remain unchallenged since no one has standing.
Ok. Anyways... I'd love it if some bankruptcy and constitutional experts happen to come across this post and can chime in. But, as I see it, the senior secured creditors may be losing out in this deal, but it appears to be both legal and their best available option. And, yes, the UAW VEBA is making out quite nicely (on a relative basis), but this is due to an independent deal struck with "New Chrysler" (supported by both Fiat and the U.S. and Canadian governments) and outside of the purview of the bankruptcy itself. The proceeds from liquidating the assets which will remain with the Old Chrysler as well as the $2B paid by the New Chrysler will be paid to the secured creditors under "normal" bankruptcy law (i.e. they are paid before the unsecured creditors or equity holders).
By the way, I do agree that this whole mess will have implications of sort on the desirability of investing in the bond market. However, the 363 sale is legal, has been widely used in other cases, and can "screw" secured creditors. This highly publicized case may place pressure on the future use of 363 sales and/or introduce higher interest rates (and more risk) on corporate bonds.
If you want to read even more details on the ins and outs of bankruptcy, Credit Slips is a very good site. Incidentally, Elizabeth Warren, the chair of the Congressional Oversight Panel for TARP, is a contributor.
Garbage Everywhere
I'm watching CNBC right now and can't help but become terribly irritated. First, they have an unapologetic Democrat on who does nothing but whine, argue, blame Republicans, and say things like, "is there anything that this President can do that you guys would like?" to her fellow panelists.
Then, you have the pro-business, anti-Obama guy spouting his own rhetoric. He did not irritate me as much, but, that's just because he couldn't get much of a word in edge-wise against panelist #1.
Argh. There is no fact-checking; just a lot of "blah, blah, blah... Democrats suck! Oh yeah, no way! Republicans suck!" Seriously!? Is this our media? (That's rhetorical... I like calling it mediatainment.)
Surprisingly, I haven't heard the phrase "green shoots" yet tonight on CNBC; although, I haven't been paying that much attention.
Just venting...
Then, you have the pro-business, anti-Obama guy spouting his own rhetoric. He did not irritate me as much, but, that's just because he couldn't get much of a word in edge-wise against panelist #1.
Argh. There is no fact-checking; just a lot of "blah, blah, blah... Democrats suck! Oh yeah, no way! Republicans suck!" Seriously!? Is this our media? (That's rhetorical... I like calling it mediatainment.)
Surprisingly, I haven't heard the phrase "green shoots" yet tonight on CNBC; although, I haven't been paying that much attention.
Just venting...
Monday, June 8, 2009
The Chrysler Bankruptcy
Earlier this week, I wrote an article which provided some basic education on the topics of capital structure and bankruptcy. This may have been overly simple for some readers, but one goal here is to provide education so that our readers can better decipher the news. With these basic financial principles, we can explore the Chrysler bankruptcy in more detail.
By the middle of 2008, the so-called Big 3 (GM, Ford and Chrysler) were already in suspect financial condition. When the economy began to really flounder in September, it only served to push the already weak companies to the edge of the economic abyss. At the end of September, Congress passed legislation which would provide $25B in loan guarantees to the automobile industry. In November, the circus intensified in the height of bailout fever, when the three CEOs came to Washington to beg for money. Legislation was crafted and passed in the House to provide direct loans to the Big 3; it did not make it out of the Senate. In a legally and constitutionally questionable move, the White House dedicated TARP funds to provide loans to Chrysler and GM. Chrysler received $4B. The Obama adminstration created an auto Task Force which would review restructuring plans provided by the automakers. The Chrysler plan was not enough and they prepared for bankruptcy.
Chrysler is (was) a privately owned company with Cerberus Capital Management owning an 80.1% share of the company and the remaining equity held by Daimler AG. Daimler wrote off their ownership (i.e. determined that the value was equal to zero) in October of 2008. Besides the money which has lent/given by the U.S. and Canadian governments, Chrysler had $6.9B in outstanding senior secured debt. There is another $2B in junior debt held by Daimler and Cerberus; and, of course, there are the TARP loans which are even more junior on the majority of Chrysler's collateral. Additionally, the UAW had set up a Voluntary Employee Benefits Association (VEBA) which holds an unsecured claim against Chrysler. The VEBA was set up to take the responsiblity of health care benefits from the Big 3. Chrysler was obligated to pay $9B to the fund. (More detail on the VEBA can be found in this article.)
Since Chrysler was unable to fund its obligations to bondholders or find investors willing to save them from bankruptcy, they had to proceed with their filing on April 30. Throughout the month of May, the Bankruptcy Court of the Southern District of New York heard the case. The case proceeded with the intent to facilitate a "363 Sale" in reference to Section 363 of the Bankruptcy Code. This allows for a sale of selected assets and transfer to selected debts and obligations to be made while the remainder are either liquidated or restructured. The U.S. Tresuary has indicated that it will provide debtor-in-possesion (DIP) financing to Chrysler to continue operations while in bankruptcy only if a 363 sale could be executed in a "surgical bankruptcy". Enter Fiat.
Fiat, the Italian automaker, has offered "access to competitive fuel-efficient vehicle platforms, distribution capabilities in key growth markets and substantial cost-savings opportunities." A new corporation, New CarCo Acquisition LLC, was set up to be the purchasers of the selected parts of Chrysler in the 363 sale. Fiat has partnered with the VEBA, the U.S. government, and the Canadian government in the form of Export Development Canada as the owners of the "New Chrysler" with a 55% stake going to the VEBA, 8% to the U.S Treasury, 2% to Export Development Canada, and 20% to Fiat. Fiat will quickly receive a 35% share as the deal is finalized with rights to own as much as 51% after the government loans have been repaid. New Chrysler will pay $2B to "Old Chrysler" as part of the sale.
Now, there are objections to this plan. The most notable objection has been made by three Indiana pension funds: the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust, and Indiana Major Moves Construction. These three funds purchased $42M of Chrysler debt at 43 cents on the dollar. Additionally, some consumer advocate groups, a group of dealers who will have their franchise agreements terminated, and others have all attempted to block the 363 sale. Last Monday, Judge Arthur Gonzalez denied all objections and approved the sale. His 47 page opinion can be read here. (I have read the whole thing in an effort to understand the details which has been the reason this article is as delayed as it is.)
By the middle of 2008, the so-called Big 3 (GM, Ford and Chrysler) were already in suspect financial condition. When the economy began to really flounder in September, it only served to push the already weak companies to the edge of the economic abyss. At the end of September, Congress passed legislation which would provide $25B in loan guarantees to the automobile industry. In November, the circus intensified in the height of bailout fever, when the three CEOs came to Washington to beg for money. Legislation was crafted and passed in the House to provide direct loans to the Big 3; it did not make it out of the Senate. In a legally and constitutionally questionable move, the White House dedicated TARP funds to provide loans to Chrysler and GM. Chrysler received $4B. The Obama adminstration created an auto Task Force which would review restructuring plans provided by the automakers. The Chrysler plan was not enough and they prepared for bankruptcy.
Chrysler is (was) a privately owned company with Cerberus Capital Management owning an 80.1% share of the company and the remaining equity held by Daimler AG. Daimler wrote off their ownership (i.e. determined that the value was equal to zero) in October of 2008. Besides the money which has lent/given by the U.S. and Canadian governments, Chrysler had $6.9B in outstanding senior secured debt. There is another $2B in junior debt held by Daimler and Cerberus; and, of course, there are the TARP loans which are even more junior on the majority of Chrysler's collateral. Additionally, the UAW had set up a Voluntary Employee Benefits Association (VEBA) which holds an unsecured claim against Chrysler. The VEBA was set up to take the responsiblity of health care benefits from the Big 3. Chrysler was obligated to pay $9B to the fund. (More detail on the VEBA can be found in this article.)
Since Chrysler was unable to fund its obligations to bondholders or find investors willing to save them from bankruptcy, they had to proceed with their filing on April 30. Throughout the month of May, the Bankruptcy Court of the Southern District of New York heard the case. The case proceeded with the intent to facilitate a "363 Sale" in reference to Section 363 of the Bankruptcy Code. This allows for a sale of selected assets and transfer to selected debts and obligations to be made while the remainder are either liquidated or restructured. The U.S. Tresuary has indicated that it will provide debtor-in-possesion (DIP) financing to Chrysler to continue operations while in bankruptcy only if a 363 sale could be executed in a "surgical bankruptcy". Enter Fiat.
Fiat, the Italian automaker, has offered "access to competitive fuel-efficient vehicle platforms, distribution capabilities in key growth markets and substantial cost-savings opportunities." A new corporation, New CarCo Acquisition LLC, was set up to be the purchasers of the selected parts of Chrysler in the 363 sale. Fiat has partnered with the VEBA, the U.S. government, and the Canadian government in the form of Export Development Canada as the owners of the "New Chrysler" with a 55% stake going to the VEBA, 8% to the U.S Treasury, 2% to Export Development Canada, and 20% to Fiat. Fiat will quickly receive a 35% share as the deal is finalized with rights to own as much as 51% after the government loans have been repaid. New Chrysler will pay $2B to "Old Chrysler" as part of the sale.
Now, there are objections to this plan. The most notable objection has been made by three Indiana pension funds: the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust, and Indiana Major Moves Construction. These three funds purchased $42M of Chrysler debt at 43 cents on the dollar. Additionally, some consumer advocate groups, a group of dealers who will have their franchise agreements terminated, and others have all attempted to block the 363 sale. Last Monday, Judge Arthur Gonzalez denied all objections and approved the sale. His 47 page opinion can be read here. (I have read the whole thing in an effort to understand the details which has been the reason this article is as delayed as it is.)
With the Old Chrysler receiving $2B from the New Chrysler, and essentially no assets remaining in the Old Chrysler of any value, the creditors (bondholders) stand to receive the $2B for the $6.9B in secured debt. This equates to about 29 cents on the dollar. There is a trust which had been established to serve the interests of the senior secured creditors who agreed to this deal in near unanimity. It has been the Indiana Funds who have opposed this most vocally. The U.S. Appeals Court dismissed their objections as well late last week. However, today, the Supreme Court of the U.S. issued a stay on the sale. This stay puts everything on hold until further notice.
My reading of the Gonzalez opinion initially leads me to believe that the sale will go through. I am not a lawyer, so I have no expertise. However, my understanding of the 363 sale allows for the purchasing entity, the New Chrysler in this example, to pick and choose the terms of the sale. This is apparently legal provided that the negotiations are done in good faith (which has received objections from the Indiana Funds and others by claiming the sale was "sub rosa") and provides the best option available for all parties. Expert testimony which was not disputed in a timely manner indicated that the creditors receipt of 29 cents on the dollar would be better than what a liquidation would provide. Further, the court has determined that if the Fiat deal is not consummated, that liquidation is the only other option.
The Indiana Funds have also questioned the constitutionality of the U.S. Treasury using TARP funds to provide financing to Chrysler (both Old and New). This question may or may not be reviewed by the Supreme Court. Both the bankruptcy court and the appeals court have denied reviewing the question because they have determined that the Indiana Funds lack standing. This means that the use of TARP funds has not harmed them so they cannot challenge the action.
You can follow the progress with the Supreme Court at SCOTUS Blog.
Some very interesting analysis of dealer closures can be reviewed here.
This article is more about GM than Chrysler, but is relevant nonetheless. It is a rare occurrence where I tend to agree with Robert Reich.
For more history and context on one of the Indiana Funds, the Indiana State Teachers Retirement Fund, who is having its own issues, you can read the following: ISTA sues the state over school funding, the court's opinion, their website, and a report on the NEA taking over the ISTA.
Loose Ends... Vol. XLVI
Well, I've been researching the details of the Chrysler bankruptcy in my free time this week and still have not finished writing that article. It should be done tomorrow. Sorry for the delay for those of you waiting...
Given the hour, I'm not going to post much of anything of value here tonight. Here are a few things (without links) which I plan on looking into over the coming days: the GM bankruptcy, Obama's speech in Cairo, and the political climate in the U.K.
Given the hour, I'm not going to post much of anything of value here tonight. Here are a few things (without links) which I plan on looking into over the coming days: the GM bankruptcy, Obama's speech in Cairo, and the political climate in the U.K.
Monday, June 1, 2009
Capital Structure and Bankruptcy
The failure of the U.S. auto industry has been a dominant news story over the last few months. Today, GM filed for bankruptcy and it appears Chrysler will emerge reorganized soon after Judge Arthur Gonzalez rejected opposing arguments. Over a couple of articles, we will discuss some of the basic nuts and bolts of bankruptcy, a few of the key opponents of the Chrysler reorganization, and some general comments on the entire process.
Let's dive in.
One of our goals on this website is to provide education to our readers by explaining some of the background which is often glossed over in the mainstream media. In this article, we'll start by looking at the basic financial structure of a business. When a new business is started, it requires money. This money is referred to as capital and is used to fund business operations and get things going. Capital comes in two basic forms: debt and equity. The combination of debt and equity for a business is called its capital structure.
When an investor provides capital to a business, it comes in one of these two forms. Equity is a form of ownership often called stock. Equity investors become part owners (shareholders) in the firm. As shareholders, they have a claim on the earnings (profits) of the firm in the form of a dividend and have the ability to oversee the firm's operations via the board of directors. Note that if the company does not make any money, then the shareholders will probably not get paid.
Debt is the other form of capital. Debt investors are referred to as creditors - they are essentially lenders to the firm. Creditors have no claim on earnings and no say in the operations of the business. Creditors simply receive an interest payment on their loan; loans which can be traded in the market are called bonds. These creditors are then also called bondholders.
All of the above actually applies to both investors to new companies as well as existing companies. We'll create a fictitious example using a new company. Let's say that we're going to start a business and need $1M to get started. We're able to find some brave risk takers who are willing to take an equity stake in the company for a combined $400k. This will be represented by 4,000 shares at $100 each. The remaining $600k will be funded by bonds (debt). In this example, consider three classes of bond investors - each a little more risk averse than the other. The first $200k goes to the riskiest bonds. They pay a 12% interest rate are not backed by any sort of collateral. This is referred to as unsecured debt. The other $400k comes from bonds issued with a 6% interest rate and a 5% interest rate ($200k each) and are collateralized (secured) by assets the our new business is purchasing such as land and equipment. The difference between the 6% and 5% bonds are that the 5% bonds are "senior" to the 6% bonds.
After a while, our business is in trouble. If we get to the point where we cannot make interest payments to the bondholders, we may choose to file for bankruptcy protection. In some cases, a particular bondholder may force us into bankruptcy if we miss a payment. There are two key types of bankruptcies for businesses in the U.S. Chapter 11 is used for bankruptcy reorganization where the company attempts to strike deals with their creditors and emerge restructured. Chapter 7 is used to liquidate a company - i.e. sell off all the assets and cease to exist.
By the time our little business venture reaches Chapter 11, chances are most of our cash is gone. If we seek to reorganize, we must get our bondholders to agree to a deal. This deal would provide details of how we would reorganize our business to cut costs, raise cash, and/or renegotiate debt. The bankruptcy court has the authority to approve the plan, but the creditors (who invested $600k in our example) would have a major voice in the matter. In many cases, existing shareholders are "wiped out" - their shares are worthless. Also, there may be a debt-for-equity swap, where bondholders are willing to accept newly issued stock in lieu of their existing bonds which pay interest. Since the 5% yield bonds were senior and secured, those bondholders would generally be entitled to the best deal in the restructuring.
If no deal can be reached in Chapter 11, we would be liquidated in Chapter 7. You may hear of bondholders taking a "haircut" or receiving "25 cents on the dollar". If a bondholder gets paid in a restructuring or liquidation, they will not receive full value on their investment. This is called a haircut. If our unsecured bondholders took a haircut and 25 cents, that would mean they would be paid 25% of their original investment of $200k - in this example, $50k.
Ok. So, this article focused on basic education in corporate finance and bankruptcy. Sometime later this week, we'll dig deeper into the Chrysler bankruptcy and apply what we've learned here.
Let's dive in.
One of our goals on this website is to provide education to our readers by explaining some of the background which is often glossed over in the mainstream media. In this article, we'll start by looking at the basic financial structure of a business. When a new business is started, it requires money. This money is referred to as capital and is used to fund business operations and get things going. Capital comes in two basic forms: debt and equity. The combination of debt and equity for a business is called its capital structure.
When an investor provides capital to a business, it comes in one of these two forms. Equity is a form of ownership often called stock. Equity investors become part owners (shareholders) in the firm. As shareholders, they have a claim on the earnings (profits) of the firm in the form of a dividend and have the ability to oversee the firm's operations via the board of directors. Note that if the company does not make any money, then the shareholders will probably not get paid.
Debt is the other form of capital. Debt investors are referred to as creditors - they are essentially lenders to the firm. Creditors have no claim on earnings and no say in the operations of the business. Creditors simply receive an interest payment on their loan; loans which can be traded in the market are called bonds. These creditors are then also called bondholders.
All of the above actually applies to both investors to new companies as well as existing companies. We'll create a fictitious example using a new company. Let's say that we're going to start a business and need $1M to get started. We're able to find some brave risk takers who are willing to take an equity stake in the company for a combined $400k. This will be represented by 4,000 shares at $100 each. The remaining $600k will be funded by bonds (debt). In this example, consider three classes of bond investors - each a little more risk averse than the other. The first $200k goes to the riskiest bonds. They pay a 12% interest rate are not backed by any sort of collateral. This is referred to as unsecured debt. The other $400k comes from bonds issued with a 6% interest rate and a 5% interest rate ($200k each) and are collateralized (secured) by assets the our new business is purchasing such as land and equipment. The difference between the 6% and 5% bonds are that the 5% bonds are "senior" to the 6% bonds.
After a while, our business is in trouble. If we get to the point where we cannot make interest payments to the bondholders, we may choose to file for bankruptcy protection. In some cases, a particular bondholder may force us into bankruptcy if we miss a payment. There are two key types of bankruptcies for businesses in the U.S. Chapter 11 is used for bankruptcy reorganization where the company attempts to strike deals with their creditors and emerge restructured. Chapter 7 is used to liquidate a company - i.e. sell off all the assets and cease to exist.
By the time our little business venture reaches Chapter 11, chances are most of our cash is gone. If we seek to reorganize, we must get our bondholders to agree to a deal. This deal would provide details of how we would reorganize our business to cut costs, raise cash, and/or renegotiate debt. The bankruptcy court has the authority to approve the plan, but the creditors (who invested $600k in our example) would have a major voice in the matter. In many cases, existing shareholders are "wiped out" - their shares are worthless. Also, there may be a debt-for-equity swap, where bondholders are willing to accept newly issued stock in lieu of their existing bonds which pay interest. Since the 5% yield bonds were senior and secured, those bondholders would generally be entitled to the best deal in the restructuring.
If no deal can be reached in Chapter 11, we would be liquidated in Chapter 7. You may hear of bondholders taking a "haircut" or receiving "25 cents on the dollar". If a bondholder gets paid in a restructuring or liquidation, they will not receive full value on their investment. This is called a haircut. If our unsecured bondholders took a haircut and 25 cents, that would mean they would be paid 25% of their original investment of $200k - in this example, $50k.
Ok. So, this article focused on basic education in corporate finance and bankruptcy. Sometime later this week, we'll dig deeper into the Chrysler bankruptcy and apply what we've learned here.
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