Archive for March 2009

Are They All Nuts?

The thing that keeps me sane is the assumption that most people see beyond the soap operas that are presented in the media as news, but I am beginning to wonder.  I drove once again to San Francisco this weekend for a five year anniversary party for my sister-in-laws for being cancer free and the experience of watching other drivers gives me pause about their ability to think and the future of this country.  Here are my favorites that make me think either the rest of the world is oblivious, or just rude and stupid:

  • The idea that the far left lane is where you set the cruise control at 55 mph and never look in your rear view mirror at the line of cars piling up behind you hoping you will get over.  When you notice people passing you on the right, you give them the evil look as though they have somehow offended you.  Personally it is a good thing I don’t have a rocket launcher mounted on my car.
  • You merge into traffic moving at 65 mph behind someone going 35 mph.  This is usually someone with a gray head that thinks they are being super safe while exposing you to being rear ended by the oncoming traffic.  Then after they have made your merge potentially lethal, when you try to get around them, they accelerate to 85 mph.  The only positive thing is that they will die soon.
  • Then there is the guy (usually a guy in a truck) who decides to merge into your lane without looking, so as you swerve to miss them and honk your horn, they flip you the bird.  Then later on as they pass you, the woman in the passenger seat gives you the evil eye.  I cannot figure out what is going through their mind that could say this was my fault.  But then I think I know exactly how Republicans think:  They cause all this havoc and then when you try to make the world safe again, they glare at you.
  • You are moving 70 mph in the fast lane when suddenly the car in front of you slows down to 55 mph for no known reason (speed limit 65mph).  Then they drift around in their lane going from one line to the other.  Finally in exasperation and your need to put some distance between you and them, you pass them on the right.  As you pass them you notice that they have a cell phone plastered to the side of their face.  I wish I could stop all drivers not using hands free devices, rip their cell phones out of their hands and stomp on them.
  • You are in the left lane going 65 mph with traffic in front of you as far as the eye can see, and some guy/gal passes you on the right and then forces his/her way back into your lane.  Let’s see.  You gained one car length moving at 65 mph which gained you .5 seconds on your trip.  You could do that only because I was nice enough to leave enough space between me and the guy in front of me to allow for an emergency stop.  But you showed me didn’t you and now you are winning the race.  Where oh where can I purchase a rocket launcher for my car?  Maybe one of those 50 caliber machine guns that mounts on the roof that are available at gun shows or maybe a one of those gun shops along the border.
  • What is it about using a turn signal indicator that is so hard?  I know it would require moving your right hand about 8 inches, but is that so much to ask?  When I lived in New Orleans where most of the drivers did not have car insurance, I understood why they didn’t use it.  If the other driver knew what you were going to do, that would give them an unfair advantage.  Maybe that thinking is spreading.

Well the good news is we survived the trip, my sister-in-law is healthy and happy, the party was a great success, and San Francisco is a beautiful place to visit.  The bad news is that if people’s driving habits reflect their judgment and intellect, we are heading for hell in a hand basket.  Hopefully they vote better than they drive.

The Opposition Party has Become the Lunatic Fringe

Watching the Republican Party gyrations this week and their attacks on anything Obama, I have come to the recognition that all that is left in the Republican Party are lunatics escaped from the asylum and still refusing to face reality.  But let us not ignore our misanthropic media which fails at every turn to note the hypocrisy or lunacy of these attacks and report it with a straight face as though these are valid charges.  But I digress.  Here are some of my favorites:

  • Representative Michele Bachmann (R-Minn) said that she wants residents of her state “armed and dangerous” over President Barack Obama’s plan to reduce global warming “because we need to fight back.”  But it gets worse. She said that “Thomas Jefferson told us ‘having a revolution every now and then is a good thing,’ and the people — we the people — are going to have to fight back hard if we’re not going to lose our country. And I think this has the potential of changing the dynamic of freedom forever in the United States.”  So she doesn’t like the outcome of the election and therefore will not abide by it.  I wonder what part of democracy she doesn’t get?  Oh I forgot, all of it.  Remember, she is the one who thinks liberals are un-American and should be investigated.
  • Then there is the whole pack of them that are complaining that if the Democrats use the reconciliation process to pass their budgets bypassing the filibuster, it is a wholesale mugging of the government process.  My how memories are short.  Let’s see, there was the Bush Tax Cuts, or as Senator Sanders, an independent from Vermont asked, why reconciliation was such a good idea when it came to giving tax cuts to millionaires but such a bad one when it comes to trying to provide health care to average Americans.  Then it was used to open the Arctic Wildlife Refuge to oil drilling.  All this by the Republicans who thought majority rule was good enough for these issues.  Hypocrisy has no bounds.
  • Then there are the claims by House Minority Leader John Boehner’s (R-OH) that Treasury Secretary Timothy Geithner’s proposal for new powers to regulate and if necessary take over financial institutions other than banks constitutes “an unprecedented grab of power”.  Oh really?  Should we continue down the unregulated path we have been on.  Should we leave these institutions in the hands of those morons who got us where we are?  Part of the problem is that financial institutions like investment firms and insurance agencies no longer act in traditional ways.  So we should follow the lead of the Republicans whose laissez-faire policies got us to where we are?
  • Then there is the claim that the Obama’ budget is a giant step toward socialism.  Please!  Providing health care for all citizens is not socialism, it is our moral responsibility.  But Republicans have been on the train of prosperity for years without ever paying for a ticket.  They have gotten their free ride on the backs of every single hard working American citizen.  Now we have to face the problems that have been building and pay for our passage forward.  They don’t like that.  Paying one’s fair share and investing in the future is something they never had to do before.  It’s un-American.
  • But the biggest lunacy is the “Republican Budget Alternative” which contained only 17 pages, no numbers, but to be filled in later.  The promise is a carefully crafted plan of tax cuts and capped spending to get the deficit under control.  Are these people lunatics?  The only thing keeping the economy off life support is spending by the federal government since both the States and our citizens are cutting back.  If you want to see our economy really go in the dumper, cut federal spending in a time when there is no other spending and more and more people are losing their jobs every day.  How does this compute on the “reality” scale?  But better yet is the idea of cutting taxes to save our budget and stimulate spending.  Even if businesses get a tax break, they are still going to layoff their employees if no one is buying.  Meanwhile with less money coming in, the deficit balloons.  Anybody remember the last eight years?
  • Last but not least there is the RNC Chairman Michael Steele told who told CNN that he would contemplate a presidential run if God told him the time was right. He also claimed to have strategically planned his squabble with Rush Limbaugh, in which he called the radio talk show host’s work incendiary and ugly. See it is all in his master plan to end up in the loony bin.  The man is delusional.  Is this the best they have to offer?

So as we enter into some of the most important debates in our history to try to right our country, the opposition party is not making sense and has become irrational.  It is really sad when a whole national party is so wedded to their ideology that when circumstances change, they cannot adapt to change and just become totally irrelevant.  Problem is their irrelevancy is holding the rest of the nation back from our future.  Hopefully this is becoming abundantly clear.

Vine/Wine Friday

Vine:   Okay, work in the vineyard continues.  Right now it is boring work raking up the piles of pruning debris and hauling them down to the burn area.  The picture on the left is the raking results with the piles waiting for pickup.  At the bottom of the hill you can see the debris that has been moved down from the upper vineyard waiting to be burned.  Note that you can click on the picture to get a full sized picture.  My old back is getting tired of this.  I have found some erosion damage and will be repairing in the next couple of weeks. Generally most of this damage is due to gophers digging holes that the runoff water fills and washes out, hence the reason for continuous gopher patrol.  I will fill the washed out areas with rocks and then dirt to prevent them from washing out again next year which of course they will as the gophers continue their terrorist activities.

I have also included a picture of pruning on the trellis system and here is how it goes:  This year’s new wood (the shoots that spring from the buds from last years new wood) are what produce the grapes.  Grapes generally only grow on new wood.  So the picture that you are seeing is a pre-pruning picture where you see the two shoots from last year growing (last years new wood) from a spur (6-spurs on each cardon (horizontal part of T) on each side of the main trunk (vertical part of T).  Last year these two shoots produced the grapes for the wine.  Pruning will cut one shoot completely off, and pick the other shoot that has the best positioned buds and health, and cut it back to two bud length.  This becomes part of the spur and the two buds will push the new shoots (this years wood) that will produce the grapes.  Note that on the picture on the right you can see the buds as white pimples. Typically these buds will produce more than two shoots and later you have to thin to the two shoot configuration.  Two shoots per spur and 6 spurs on each side of the T (each cardon) is a good balance for this plant in this soil.  Note that each shoot will produce multiple grape bunches and these will be later thinned to two (depending on size of shoot to support) grape clusters.  See the vineyard pictures for how this was done last year (Vineyard).  Okay so much for vineyard 101.  On to the fun side, the product.

Wine: This last weekend was a biggie.  Saturday we had committed to help my friends the Wards with a charity dinner they had sold at auction to help the local theater group.  It was a seven course affair mostly prepared by Fran and Mike with Steve and Candace doing prep, general cooking, serving, and cleanup.  The Bush’s (Paul and Maggie) from Madroña Winery worked with us to pair wines for each course during a practice dinner several weeks ago and to pour and explain each wine (cook the Bread Pudding and help in every other way).  The pairings were excellent and we must have tried at least 10 different and distinct wines.  My favorite was the Madroña Reserve Malbec.  The meal included:

– Grilled Ahi with Ginger Black Bean Sauce on Asian Coleslaw – 2007 Dry Riesling ~ 2005 Reserve Syrah
– Leek Salad with Creamy Tarragon and Garlic Dressing – 2007 Reserve Chardonnay
– Deep Fried Quail in Ale Batter, Pear Apple, or Apricot Chutney – 2006 Zinfandel
– Intermezzo of Honey Dew Melon – 2007 Fiore
– Short Ribs in Cabernet Sauvignon, Green Beans and Shredded Almonds, Garlic Mashed Yukon Gold/Purple Potatoes – 2006 Malbec
– Fromage and Fruit Plate (Midnight Moon and Petite Basque) – 2003 Enye Syrah
– Traditonal Bread Pudding with Warm Whiskey Sauce – 1993 Select Harvest Riesling

Sunday we were up and traveling to San Francisco for the annual Rhone Rangers Grand Tasting at Fort Mason (on the water).  Rhone Rangers is an organization dedicated to the growers and wine makers of Rhone varietals.  Their Grand Tasting in San Francisco each year is to showcase what is being accomplished throughout California (and some in Oregon and Washington) locations to further the quality and enjoyment of Rhone varietals.  There were roughly 142 wineries represented with 36 food purveyors.

Obviously, one cannot taste everything so my plan this year was to stick with Red Rhone blends.  I wasn’t very successful, but I did a lot of spitting.  We usually go in with the Trade for two hours of tasting before the general public is admitted so that we can spend a little time with each winery.  Once the crowd descends, it is best to get your taste of wine and then move back from the tasting area to let others have a chance.  Some people never get this, and they try to hog the wine and the conversation while others wait.

My general impression was that this was a very good year.  Even with the economy in the dumpster, the wineries were well represented and the place was packed with happy tasters.  The quality continues to notch up each year so what I tasted had to be a limited selection and to reflect my own special interests.  So here are my favorites, and I tried to stay away from wineries I know so they are omitted:

Rhone Blends:
2006 Le Mistral – Le Mistral Winery Syrah, Grenache and Alicante Bouschet
2006 Brat – Prospect 772 Wine Company, Syrah, Grenache

Syrahs
IO Wines – 2005 Upper Bench, Ryan Road, and Rhone Red Classic.  All their Syrahs were complex and tasty, even meaty
Cedarville – 2006 Estate Syrah
Novy Family Wines– 2006 Syrahs, all are excellent and Novy continues to hit the mark
Prospect 772 – 2006 Syrah
Martinelli Winery – 2005 Terra Felice

Varietals:
Cedarville Winery – 2007 Grenache
Morgan Winery – 2007 Grenache
Frick Winery – 2006 Cinsault, 2005 Carignane, 2006 Grenache Blanc Note: I had never tasted any of these other than in blended wines and it was a treat.  Thank you Mr. Frick

Edmunds St. John – Heart of Gold, a 54% Grenache Blanc, 46% Vermentino blend, a truly distinct and refreshing white.

There were many others that I did not mention which included Holly’s Hill, Terre Rouge, and David Girard which are right up there with the best because I was trying to branch out and not taste my known favorites.  I would have tasted at Tablas Creek since they really started the Rhones in California and many of my varietals are clones of their vines, but there is always a gaggle of people there and I refuse to be a groupie.  Sadly A Donkey and Goat was not there.  Small wineries in this market have to pick their marketing opportunities carefully.  I did run into Tracy Brandt (Jared was home baby sitting), joint owner/wine maker and she gave me some great tasting tips.

For food, it was a bonanza for chocolate lovers.  Best chocolate came from Belgique Truffle Gateau and Clairesquares.  For other venues Sonoma-Artisan Foie Gras, Marcel Et Henri’s Pâté, and The Girl and the Fig’s cassoulet got honorable mention.

So after a hard day of wine tasting, we departed about 3 pm and hiked up (about 4 miles) to 2073 Market Street to the Woodhouse Fish Company for a Crab Louie, Fried Shrimp, Claim Chowder, a Calamari Sandwich, and a very cold beers. After all that wine, a great lager tasted quite refreshing.  It is a small place in a neat neighborhood with great seafood served casually.   Another perfect day.  Carpe Diem.

So What is Your Plan?

The Republicans and the “moderate” (I will call them the moron Demos) Democrats are trying to throw a wrench into the Obama budget.  Basically they all have a new found fear of deficits.  I say new found because they had no problem during the Bush years when the financial industry was humming, doubling the national debt by cutting taxes, but now when we actually need to stimulate and invest in the economy, they are pulling back.  I have a basic question for this debate which most people aren’t even thinking about:  Exactly what do we make that either our own population or the world markets are going to buy to give us all jobs?

Think about this, because this question is critical to our resurgence as an economic force.  Looking back on what the Republicans describe as the good times in the early 2000s, our economy was driven by creating and selling debt to the whole world.  It wasn’t sustainable.  It wasn’t that great of a time because as the rich got fabulously wealthy, the average guy/gal stagnated.  Clearly the way forward is for a vibrant, creative, and competitive economy that can create goods and services that the world wants and provides economic growth across the entire working sector.  These jobs are not going to get created out of thin air.  So what’s our plan for getting there?

Well right now we are focused on getting our economy back up and running.  But an economy based upon what?  And this is where the politics and the debate have become almost irrational and self-destructive.  President Obama makes the argument that not only do we need to restore our economy with a three point plan (stimulus, banking capitalization, and mortgage reform), but we must make investments in health care, education, and energy in order to have the basis for a vibrant economy.  He, along with columnists such as Tom Friedman see green energy as the engine that will drive our economy in the future.  But we are not going to get there without investments in our future.  This plan is embodied in his budget he submitted to Congress. But the nay sayers are shocked, shocked, shocked at the price tag.   So what is the counter argument or Plan B?

Well there isn’t a plan B, just concerns and obstructionism.  Probably the most rational argument is the concern over growing the deficit.  But being concerned about the deficit is not a plan for getting us to a growing economy again.  It reminds me of a conversation I have with my better half all the time about what to have for dinner.  I get a whole list of what is not wanted, but not what is wanted so I can plan a meal.  Look at this argument another way.  What is the alternative to not growing the deficit as we make needed investments in our future?  There isn’t one.  We solve nothing, we go nowhere, and we kick the can down the road.  More importantly we don’t have the discussion about where we are going.  Their argument seems to be that we need to get the economy running again before we solve these other problems, but the other problems are a function of our basic problem with the economy.  The irrational part of all this obstructionism is that until we fix ourselves and start making investments in our future, there is no future.  Yet it would seem that the argument is we can’t afford it and then silence about our future.

Think about it.  Well meaning people (well some are) are concerned about running up a debt that could be problematic for our future, but if we don’t make these investments, we won’t have a future.  I realize that some ideologues think the market place will solve all problems and we need to let it just run free, but that is exactly what it has done in the past 10 years and the results for this country and the world have been disastrous.  So the obvious conclusion is that we can’t afford not to make these investments.  We certainly can have debates about the best way to spend this money to get the most bang for the buck, health care comes to mind, but there should be no debate about the fact that we have to make these investments.  Saying we can’t afford it is like saying we can afford to prepare for the future and is the beginning of our decline.

This is the part of the discussion that I find almost unreal.  Republicans and their moron Demos cohorts who are aiding and abetting them have no real plan for the future.  If we do less, eventually things will get better seems to be their belief.  But while we are doing less, countries like China will go right by us, if they haven’t already.  If they had a plan for our future which would explain how their proposals, including scaling back, limited spending, cutting taxes, not addressing energy, education, or health care, at this time solves any of our problems maybe we could have an honest discussion.  Their argument here is we can’t afford it.  But the more obvious conclusion here is that what we are seeing is denial.  They simply want to kick the can down the road instead of making the hard decisions now.  I find this totally irrational and destructive.

So as the flame throwers try to scare you about the budget, the bailout, the deficit, or the stimulus, remember to asked them exactly what is their plan.  Just saying no is not responsible criticism.  How and what are we going to be doing in the future to be competitive and what is your plan to get us there?  Just letting them lob grenades and be obstructionists does nothing to solve our problems and just reduces us to dithering fools.

I am also worried about the deficit, but I know there is no choice.  First we need to get the engine pumping, and then we need to invest in ourselves to give the engine something to do.  Then once it starts to hum, we need to start paying off our investment. Unlike the Bush years, we need to actually raise taxes to pay off our debts.   Personally, I think it will pay for itself and we can’t afford not to believe in ourselves and take the risk.  The Republicans and the Moron Demos want you to hide your money in your mattress and wait out the storm.  This approach could make the storm last indefinitely.  Isn’t it time we let the President take charge and move forward?

The Market Likes It, But I Am Not Sure Mikey Does

The market reacted favorably to the Giethner Plan for the banks and some seem to think this is a good thing and proves we are moving forward.  But investors like what protects their asses, not what is good for the nation.  The real problem with the plan is that the average American is never going to understand it.  In fact if you asked the average American what has happened to the financial markets, most would give you some simplified half-truth because quite frankly it is very complicated.  But it doesn’t have to be.  Matt Tiabbi wrote a piece for Slate Magazine which should be required reading for all Americans because he fairly well nailed it in language most of us actually speak (The Big Takeover).

For those of you who really want to understand this thing and the real issues I would recommend several wonderful blogs in order of how much you need to already understand to understand the arguments, and by the way from real economists, not talking heads and political mouth pieces.  They are in order of easiest to read:
1.    Room for Debate Blog, Will the Geithner Plan Work, a discussion by Paul Krugman, Simon Johnston, Brad DeLong, and Mark Thoma
2.    Paul Krugman’s Blog, Conscience of a Liberal
3.    The Baseline Scenario, Simon Johnston and James Kwak.  There is a wonderful beginners section to get you up to speed
4.    The Economist’s View, by Mark Thoma

Let me try to summarize in one paragraph.  AIG is just the tip of the iceberg.  They bought and sold Collateral Debt Obligations (CDOs) which were nothing more than bundled loans, sliced and diced so they could convince, or more appropriately confuse, the rating agencies into giving them high credit ratings making them highly marketable.  But that is not the real problem.  They sold Credit Default Swaps (CDSs) which were really insurance that the CDOs would not default.  But because they were unregulated (long story) they, unlike a normal insurance company, did not have to have capital (read cash) to back them up.  They sold them to anybody.  It was great money while it lasted.  You did not have to have the CDOs to have insurance on them and there was no limited to how many they could sell (take bets).  Remind you of Las Vegas?  So when the market bubble finally went psst, they are holding these things they can’t pay off.  And everybody was holding them.  Now the trick in this is if you re-evaluate the CDOs to what they are worth today (estimates at 20 cents on the dollar) then the CDSs would kick in and you would have to pay out.  So everyone is dancing around holding all this stuff like hot potatoes which if evaluated in today’s market, makes everyone broke and unable to lend.  That is why when the Treasury gave a ton of money to AIG, they paid out to other companies, yet to be named, this money.  Some of the outrage is because they paid this out at face value worth when many think these numbers could have been negotiated down based upon today’s worth.  Again, no adult supervision.  Because of the domino effect, the belief is that many of these institutions are too big to fail.  Keep this in mind because it is also part of the solution.

Now there are a couple of problems with this handing over money for the private sector to resolve their problem without adult supervision.  First they are using taxpayer money to make bad bets whole.  So the firm that receives this payoff doesn’t suffer and neither does the firm, in this case AIG, that is making this payout.  The conventional wisdom in the banking community is that this is what it takes to save our financial system.  The conventional wisdom in the general population is this is highway robbery using taxpayer dollars to keep failed institutions alive.

Most of us recognize that we have a very bad situation and we have to fix it.  Only the most ideological or political Republicans believe we can let these institutions fail and possible collapse the whole system.  The best of all possible realistic solutions is that we balance the suffering among all the parties.  Every body get’s a bloody nose.  Right now the public perception is only they are being asked to suffer and they are right.  Enter the Geithner banking plan.  The idea is that these toxic assets are undervalued in today’s market.  Given time, and the market/economy recovering, the future worth of these assets is much greater than they are now valued.  The key is to get them off the banks balance sheet at their present worthless value so that banks will then be sufficiently capitalized to loan again, and hey, we are borrowing like fools again, a subject for a whole other blog.

Now one approach is to nationalize the banks/financial institutions, sell off the good stuff, and have the government take on the bad stuff, hold it, and hopefully make a profit in the future  Also, did I mention fire most of the morons that got us to where we are?  But Congress is in no mood to appropriate any more money for this action, and the Treasury has no authority to take over financial investment firms/insurance companies/hot dog stands.  So the other approach is to get private investors to buy this stuff by loaning them the money, and insuring the loan.  This is called non-recourse loans which says if they default, we get the toxic waste back.  They have to put very little of their own money.  It is kind of a heads you win, tails I lose situation.  They have some risk, but very minor compared to the taxpayers.  The plus side is that if the toxic assets do gain in price, depending on what price they bought them at, if a profit is made, the government gets some of it.  But if they go bust, we get almost all the bust.

Now here is where the problems lie.  First, because the taxpayers are insuring the money to buy this stuff, the price they will pay for it may be inflated.  Read that as the taxpayers are getting gouged.  Second, those banks/financial institutions that hold it have to agree to sell it at some reduced price from its face value.  There is no way to force them to do this.  Third, how does this solve the too big to fail issue?  And fourth, where is the pain for the investors in these institutions who let their management run wild, where is the accountability?

My own layman view is this is the best we can do in the political climate, but it won’t work and when things get dicey enough, enter the Sweden solution.  That is when we nationalize these institutions, take over the problem, break them up, and then re-privatize them.  This, by the way, is also the final solution because the banks/financial institutions can never be too big to fail ever again. The problem is, the longer we wait the more costly the problem.  But we are still living in the age of government is bad and this solution will only come about when we are face down in the gutter.  Looking forward to that.

By the way, heard any Republican solutions yet?  That is because they don’t have any.  They are throwing fire bombs at anything suggested, but have no plan of their own except be afraid of deficits, don’t take too much on, and lets cut taxes and spending, the government is the problem.  They really are irrelevant along with our “moderate” Democrats who are really Republicans.

Lead, Follow, or Get Out of the Way

I spent a news-free two days, so reading the papers this Monday morning got me fairly riled up.  Saturday we did a charity dinner and spent all day in prep and cooking, and Sunday when we got up to go to San Francisco for the Rhone Rangers Grand Wine Tasting, it had snowed and froze my satellite dish, so I was disconnected from the world for wine tasting and general gallivanting in San Francisco. I thought I had left the country in good hands for the weekend, but what a fool I was.   Monday when I got up in SF, got my coffee and sausage muffin at Starbucks, my trusty Kindle had downloaded the New York Times, the Washington Post, and the San Francisco Chronicle and I realized the nation was once again adrift.  So I will do my patriotic duty to get this thing back on course.

Let’s start with the Republicans and their distraction tactics to do nothing about our problems.  Senator Susan Collins, the “moderate” Republican from Maine was “concerned” about the deficit.  She said in regard to deficit spending in the proposed Obama budget, “It brings our debt levels to an unprecedented level that is not sustainable.  It poses a threat to the basic health of our economy.” There are two misplaced ideas here.  First is that this level of debt is not any more than we ran during WWII (as a percent of GDP), which by the way, we borrowed from our own citizens.  And the second one is that our economy is already on life support.  Spending has dried up.  What exactly does Senator Collins propose?  Reduce spending and unemploy millions more?  Ignore our problems and they will get better on their own as businesses fail and our infrastructure collapses?

Monday, E.J. Dionne wrote a column in the Washington Post (Obama versus the Dodgers) pointing out this tactic of ignoring presenting your own solutions and kicking the can down the road by claiming the Obama administration has overreached with too many issues and must focus on the economy.  As he makes clear, this is nothing but a tactic to not discuss or debate the way forward for education, health care, or energy.  Then the Republicans like to criticize everything that is occurring, but offering no coherent alternatives.  That is because there aren’t any.  This editorial encapsulates the complete Republican strategy, and what should concern most Americans is that it is a strategy with no plan other than to have the other side fail.  You have to hand it to Republicans. I never thought a Lose-Lose strategy would ever see the light of day.

But let us not let the Obama administration off the hook.  If the Obama administration has a fatal flaw, it may be that it doesn’t lead in the details and the devil is in the details.  President Obama told us that he wanted the stimulus money spent wisely and for our future.  But it is clear that the money is being spent for business as usual projects such as a toll highway near Houston Texas which could increase rural sprawl and be counter productive to reducing our carbon imprint or vehicle usage.  This is just one of many projects that are going forward which will create jobs, but don’t match up to our long-term goals.  In a related story on Monday, the Obama administration sent out its spokespersons to get out the message that the 90% tax on bonuses that came out of the lynch mob House was flawed, but would wait to see what the Senate will come up with to handle this bonus situation.

Both of these examples demonstrate, in my view, a flaw in the Obama approach.  He is trying to establish wide guidelines and then let the political process play out to arrive at a way forward. The trouble is, the politicos just can’t stop doing business as usual and they need adult supervision.

One of the reasons that George Bush was able to lead so many people down the wrong path was because he was firm about where we were going and gave people confidence in his leadership, however misguided.  President Obama needs to borrow a page from George and start laying the path forward in more specific detail and start fighting for the important things that have to get done, or as Frank Rich pointed out in his column on Sunday (Has a Katrina Moment Arrived?), he has to take charge.

We have this moment in our history when we are at a critical crossroad.  The Republicans are doing everything possible to stymie any progress other than trying maintain the staus quo.  This is no more evident than this morning in the hearings on AIG where the Republicans somehow tried to tie the bonus management to government provided health care.  It is time to stand up and fight for the way forward, not wait for some compromised half-step that won’t get us there.  This is the critical moment whether we either step forward, or always be relegated to an also ran.  We need a leader who will project the way forward, be specific in his plan and then fight for it.

It starts with correcting the abuses of torture and murder we committed, as we became a nation of war criminals by investigating and prosecuting those that committed these atrocities.  We have to get our house in order and this would shut-up Vice President Cheney and his claims of making us safe.  It must continue with a vision for our future and instead of accommodating Republican do-nothingism as bipartisanship, takes it on directly and discredits it.  We need a national plan for energy, education, transportation, and our economy.  Leaving it up to the states or Congress to sort out will not get us there.  The nation is waiting for you President Obama.  Do not let this opportunity get away while you play nice.

Forest For the Trees

Watching Congress for the last couple of days has been quite entertaining although the destruction they are wreaking may be catastrophic.  Better yet watching Nora O’Donnell on MSNBC almost shrieking as she brow beat Representative Charlie Rangle who was in the conference committee on the TARP bill when he said he knew absolutely nothing about who took the language out of the bill to prohibit the bonuses, was watching misplaced rage out of control.  It turned out the language was removed at the request of Treasury long before it got to conference but that is beside the point.  They want someone to hang, and rational thought is not on the agenda.

The sad thing is that while the bonuses tell you everything that is wrong with the mentality on Wall Street, they are not the real problem.  The real problem is that the banks are broke, badly broke.  It may feel good to string up a few traders who helped get us there, but the reality is, they are small potatoes in the scheme of things.  The real action is getting the system working again and then fixing the systemic problems.  And just as a by-the-way, no laws were broken.  There apparently weren’t any to break.

Congress meanwhile, in wild political gyrations, is playing politics of the worst kind, opportunism.  Most Republicans went into the blame game mode to try to blacken the Obama administration and Democrats in any way they could, conveniently ignoring the fact that it was the Bush Treasury that agreed to these bonuses originally, but none of this is really important.  Some called for the resignation of Timothy Geithner.  Let’s move the chairs around on the Titanic and everything will be okay.  Meanwhile the Democrats headed them off at the pass by passing a bill to tax 90% of the bonuses in the House.  This kind of takes the wind out of the Republican’s sails because it was a problem, but was quickly remedied.  But then the Republicans found themselves caught between a rock and a hard place when they realized this was raising taxes which they had pledged to never raise and many couldn’t vote for it.  By all accounts all this is meaningless because the bill itself is most probably unconstitutional and if not, bad legislation at best.  It will never get past the Senate.

Steven Pearlstein, who is a business and financial columnist for the Washington Post wrote a wonderful article on Friday to describe why this is all about small potatoes and once again the focus is in the wrong place (Let’s Put Down the Pitchforks).  But his most important point was who was really to blame for this financial mess we are in.  We are.  When we finally get tired of lynching parties, maybe it is time to look in the mirror.

Our economy has been going strong not because we were manufacturing anything, but because we were borrowing up to the hilt and making truckloads of cash selling that debt to all comers.  Our entire economic boom was based upon creating and selling debt.  Much of the spending in the last 10 years was funded by 2nd mortgages and credit cards.  Even the investments in this debt was funded by borrowing.  While we ignored the real needs of our country by continued tax cuts, we were out with the credit card getting all those things we were entitled to and deserved.  Think about it.  It is the same mentality as the Master’s of the Universe.  They are entitled to their bonuses because they worked hard and sold all those worthless pieces of paper.  The common good is lost in all of this.  We became so selfish we all feathered our own nests while we emptied our governments and by extension, our children’s.

So what do we make of all this?  Well for the fury in Washington, we can draw the conclusion that nothing has changed.  They are still not focused on coming together to solve the real problems.  Most of our Congress thinks we can find a few scapegoats, score some political points, and things will be back to normal, meaning going nowhere.  But anyone who has ever had to manage a real program and get things done will tell you that shit happens and you make mistakes.  The way forward is not to shoot those who make mistakes, but to learn from your mistakes, correct them, and move on.  Joe Nocera in the New York Times on Saturday chronicled why what Congress has been up to is so damaging to the real problem with our economy (The Problem with Flogging AIG).  If we continue on this path we are doomed.

As I watch those who are playing the blame game, I know they have never really been put in charge of something really important and had to make it work.   The media are experts at pointing fingers when someone stumbles.  The politicians know how to cover their asses.  But none of them has ever had to build an organization and lead it.  It is not about charging forward and shooting deserters.  It is about stumbling, trying something different, making mistakes, learning, correcting, and slowly building a team that can succeed.  It is so easy to criticize and it is so hard to take the risk to lead and then be vulnerable from those that can second guess you.  It would seem that our President has figured this out, but for the rest of the rabble, the jury is still out.

So bottom line here is we should get the money back if we can, but we shouldn’t pass legislation that could be counterproductive to your whole effort.  Note this legislation affects all banks and financial institutions that took federal money and employees who did not work in these troubled financial groups.  They may opt out of the program and just sit tight which is exactly what we don’t need (See Joe’s article above).  We may eventually find out that the deal was struck when the contracts were signed and lo and behold, Treasury was right when it said we could not violate those contracts, as unjust as they are.  If that is the case, swallow hard, lick your wounds, move on. And don’t make that mistake again.  The real battle is to save the economy, not get back one-tenth of one percent of the bailout money.  Meanwhile back in Washington the circus continues and as they do what they do best, finding fault and fixing blame.  Anybody think this is progress?  We need to stop the hysterics, focus on our real problems and start moving forward behind our President instead of this endless lashing out.

Vine/Wine Friday

Vine: Spring Pre-Pruning, Cover Corp, and Rows Sprayed OutAh, spring is here.  I can tell because when I get up in the morning every muscle in my body hurts.  No it is not the weather, but the work of pre-pruning and pruning debris clean up.  Each year usually I wait until after pruning and then rake up the shoots, some that are 16’-18’ long and then transport them to the burn area to burn.  If I were a real farmer I would have a tractor with a flail mower so I could just rake them to the center of each row and then cut them up.  But only having my trusty ATV, unable to find a tow behind flail mower (except in Britain and China, but that is a tale for another day), and a neat freak, I spend about a month on my most dreaded task in the vineyard, pruning debris clean up.   The picture I have included shows the upper vineyard, the beautiful ground cover, and the pre-pruning (debris cleaned up).

At any rate, our approach to pruning is to wait until bud break and then prune everything back to two buds on a spur.  By waiting later, it slows down bud break so you can give yourself a couple of weeks of insurance that you won’t get a frost that damages the tender new leaves. At my elevation (3000’) that is important.  But if you wait until late March or early April, the ground cover is in full growth and it is then hard to rake up the debris.  So I do a little pre-pruning by cutting back all the trellis vines to about 8” using a heavy duty gas hedger, cut and pull the shoots off the wires, so that when we do the final pruning it is a fairly straight forward affair without the delay of removing the tangled shoots from the wires.  So for the next week or two I will be doing that, tightening wires, and other fun stuff while we await bud break and the final pruning.  Once pruning starts I will show you the technique and try to explain the process.

Wine:  Last Sunday I went to Holly’s Hill for a pairing of oysters with their Patriarche Blanc (Viognier, Roussanne, Grenache Blanc), and Grenache with grilled chicken.  It was a delight.  Josh (of Josh and Carrie Bendick, wine makers) had gone to the Hog Island Oyster Bar in the Ferry Building in San Francisco to get fresh oysters and they were wonderful.  You got your choice of either grilled oyster in the shell with a dollop of butter and garlic, or raw with a delightful rice wine vinegar sauce.  Interestingly, if you ate the oysters raw (which I do) the Patriarche was a little flat in the finish, but when they were roasted with the butter and garlic it was a delightful bursting of flavors from the wine.   The Grenache went well with either and my cohort, Ron Mansfield (vineyard manager at Holly’s Hill and my vineyard consultant) and I just got a bottle of Grenache and it went well with everything.  Going to Holly’s Hill is always a pleasure because the whole family partakes in every event and they are a delight to know and talk to.  The staff in the tasting room are a gregarious bunch that makes every visit a pleasure.

This weekend is the Rhone Rangers Grand Tasting at Fort Mason in San Francisco.  There will be over a hundred wineries so a little planning is in order.  If you start at the A’s and taste everything you are not going to make it to the K’s.  I am still considering where I want my focus to be.  Last year I did the Syrahs and limited it to a few wineries.  I haven’t got a plan yet and my love for Syrahs may trip up my evolving plan to just taste Rhone Blends this year.  Candace is going with the Rhone Blend whites, and I will deviate to taste anything anyone suggests as special.  We will be spending Sunday night in the City and I haven’t decided where to eat yet.  We are considering something simple after the tasting like clam chowder and a beer.  Will report next week.  Carpe Diem.

Bits and Pieces

There were several news stories of note to enhance one’s breadth of knowledge, wisdom, and food for thought at this mid-week.  To wit:

  • It would appear that the deeply religious hang on to the bitter end in end of life situations as opposed to those who are less religiously inclined (New York Times), demanding aggressive intervention to stay alive in their last few months.  Now this is interesting for two reasons.  First you would think that those who thought this life was the end of the road would try to hang on to it more than those who were on their way to the promised land.  Second, over one-third of all Medicare costs are incurred in expensive end-of-life care for these aggressive interventions.  The study also noted that for these “hangers-on” these interventions are painful and reduce the quality of their last days.  I guess accepting reality has always been hard for the religious (creationism come to mind?) and expensive for the rest of us.
  • With the villagers in the streets with torches to string up those guys who got bonuses from AIG, maybe we ought to stop and think about this a moment.  The conventional wisdom is that these people who are getting the bonuses were the very same people who took the company to ruin with their reckless trading.  But wait a minute.  Just how were these bonuses computed?  Sell x amount of the risky credit default swaps and you get y amount of a cash bonus?  And although these transaction did destroy the company, who set up the incentive system to sell all these CDSs?  Should we be punishing the troops when it was the general who told them to charge the wrong hill?  Maybe some of these guys worked night and day to do what their bosses wanted, and from their point of view, now we are depriving them of the compensation they were promised.  No, I don’t think these bonuses should be paid, at least not the amounts publicized, but I think we are stringing up the wrong group of people.  Does nationalization come to mind?  Maybe it is not such a bad idea.
  • In the ongoing attempt to reform health care “leading Republicans and insurance companies have expressed alarm at the idea of a new government-run insurance plan competing with private insurers.” (New York Times)  I find this truly hilarious that the free market, competition solves everything crowd can’t stand the heat from a government program.  What are they afraid of, finding out that a single payer system like Medicare is the only cost effective way forward?
  • The White House is considering using “budget reconciliation” to get the Obama budget through Congress because this process bypasses the filibuster.  It then only takes 51 votes to approve a budget.  Republicans are shocked, shocked, shocked.  But a look at history tells us that most fundamental change came from using this process including April 1981, April 1982 (think Ronald Reagan here), April 1990 (George Bush), April 1993 (Clinton-Gingrich), and the 2001 Bush tax cuts.  It would seem that when we want to make real changes, our form of government with the filibuster (read super-majority requirement here) has to go to extremes to make it happen.  Sooner or later we ought to let the majority party implement the changes they were voted in to do, and then judge them accordingly in the next election instead of allowing the radical minority to stymie progress.
  • There are two international stories to think about.  One is the Russians wanting to base their bombers in Cuba.  To me this is a no-brainer.  It would be a barter chip for removing the missile defense system from our proposed sites in Eastern Europe.  For every action there is an equal and opposite reaction.  Second is the Obama administration considering further and expanded predator drone strikes in Pakistan.  Although I understand that we are at war with the Taliban, these strikes in Pakistan involve collateral damage that may be more damaging than the Taliban/al Qaeda we are trying to take out.  This campaign seems to violate the lessons we are learning about guerilla warfare being about hearts and minds, not tactical battles (It is sad that some of us learned all these lessons in Viet Nam and they have been conveniently ignored and then resurrected as new ideas in Iraq and Afghanistan).  I also have a problem with sanctioned assassinations that violates our concept of justice.  War is hell isn’t it?
  • One last irreverent thought.   The Pakistani woman, Mukhtar Mai, who was gang raped by 13 members of a rival family, sanctioned after an alleged impropriety by her younger brother which later turned out to be false, has decided to get married.  She has been a model of the “new” Pakistani woman because she has bravely stood up to this treatment of women in Pakistani society and against custom, charged these men (beasts) with rape.  My concern here is that she will be the second wife (as in two at the same time) of a man who has pursued her for years, and after his attempted suicide, she finally relented.  I fear for her because in Pakistan, your wife is your property.  Maybe she can turn that one on its head too.

Just some food for thought.

Blowhards

I was awakened on Tuesday morning by my clock radio tuned to NPR and Senator Foghorn Leghorn (Shelby of Alabama) ranting at Timothy Geithner and basically calling for his resignation over the bonuses at AIG.  In my groggy state I remember thinking, “and just where the hell were you when the Republicans in Congress were spending like drunken sailors and cutting taxes, emptying out our treasury?”  Here is a guy who can rile up a crowd of know-nothings, but rioting in the streets and burning down the town doesn’t solve any problems.

What is really ironic is that Senator Foghorn Leghorn doesn’t want to nationalize these banks/companies, yet he is outraged when these private owners ignore government wants and desires.  By the way there was an amendment put on the legislation for TARP II to prevent bonuses, but good guys like Shelby, oh I am sorry, Senator Foghorn Leghorn, did not want the federal government dictating to these wonderful private bankers who are our saviors, and killed it in conference.  Talk about blowing smoke out of both sides of your mouth or other orifice of your body.

I see the same mentality in my own state in what is called the “Howard Jarvis Taxpayer Association”.  They are against everything.  “We are taxed too much.  Just cut spending.  Waste is everywhere.”  This group was named after the gentleman who led the crusade for the famous Proposition 13 that put a cap on all property taxes and started California’s skid into insolvency.  What they are good at is saying no to anybody’s ideas, but their own ideas are either nonexistent or nonsensical.  Let’s face it.  If we want what we want, we have to pay for it, but the point here is that it is so much easier to say no than to come with a plan to deal with the issues that face us.

When President Obama was putting forward his three-phased plan for dealing with the economy, what you heard from the Republicans and some yellow dog Democrats was “I have some concerns.”  Okay, you have some concerns.  What are they and what is your solution?  And that is where blowhard becomes the operative word.  They can throw stones, but they can’t build anything.  “I don’t like the stimulus package because it raises the national deficit.” Okay, then what is your approach to stimulating the economy?  Tax cuts?  That didn’t work last time and that also empties out our treasury and raises the deficit so how does that help?

So what we have is the Obama team trying to deal with these tough issues, and what we get from the Republicans and quite a few conservative Democrats is sniping and political point scoring.  It doesn’t get us anywhere.  Returning to Senator Foghorn Leghorn, what has he done lately to solve the problem?  Oh, I forgot.  He is still questioning President Obama’s citizenship.  That ought to stimulate the economy.  Sure the Obama team has made mistakes.  They are learning as they go.  It is not perfect, but they are trying.  The blowhards are just blowing, without any realistic alternatives.  It is always my pipe dream to put them back in charge and watch them sputter, but the damage to the country would be just to great.

Meanwhile in China, they are using this crisis to invest almost a trillion dollars in infrastructure investment to better position themselves when the economy comes back (In Downturn China Sees Path for Growth). They can do this because they are awash in funds from their booming economy.  So the next time you hear the blowhards start attacking to score political points, ask them this:  “When we were booming in the early 2000s and our financial markets were awash in cash, how come our treasury emptied out and our deficit grew?  Was it because you guys had no plan and could not raise taxes to be ready for a day like today?  Why should we believe anything you say now?” The fact that we haven’t tarred and feathered these guys and then turned them over to the Taliban for re-education is beyond me.