Blagojevich's last hurrah

Yesterday, Illinois Governor Rod R. Blagojevich was impeached by the Illinois state senate. They not only impeached him, they banned him from holding public office in Illinois.



Blagovich spent his last few hours as governor cleaning out his office and saying farewell to staffers. He also spent time pondering his fate which compared to a Greek tragedy and trying to figure out how he was going to pay his mortgage now that he is out of a job. At the end though, he was upbeat. He told the New York Times reporter Monica Davey, "Look I always think creatively. I don’t give up.”



Fortunately, for the governor he will not have to suffer the fate of the tragic ancient Greek King Oedipius and take long steel needles with really sharp points and plunge them into eyes. I have a few suggestions for possible career choices that the ex-governor might want to pursue. They are:

Recurring character on Sesame Street, as the Letter F@#$$*!!! because little boys like me all want to know how to spell and use that word.

Fifth member of Alvin and the Chipmunks (It's the hair).

Bathroom atttendant at O'Hare airport, because people always need to be told where to go and what to do when the restroom is out of toilet paper.

Cab driver in Chicago or New York (At least he speaks English and his his hair is washed and combed.)

Rod the Bleeper for Palin 2012 (Change you can BLEEPIN' trust).

Professional Swinger (search for this on Google if you dare) , Both he and his wife Patricia have shown they can talk the talk, so probably they can walk the walk.

The next white Rap Artist--Blago-Bleeeeeeeep!!!!!!!!!!

Star in the sequel to Forest Gump because "Life is like a box of BLEEP!!!"

Spokesperson for Dale Carnegie on "How not to win friends and BLEEP!!! yourself!"

Regulare contributor on the Nancy Grace show, because those two people BLEEPING deserve each other.

So cheer up, Mr. Blagojevich, "every silver lining has a cloud" and "it's always dawnest before the dark"

Capitano Tedeschi

30

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Bank of America Cover Letter

Mr. Kenneth D. Lewis,
Chairman
Bank of America Corporation
100 North Tryon St., 18th Fl.
Charlotte NC 28255

Dear Mr. Lewis:

The purpose of this letter is to request an interview to discuss how I might help Bank of America during this current financial crisis. I have several ideas that could help B of A to improve its profitability in spite of its unfortunate losses of billions of dollars due to bad investments in complex financial instruments, the subprime real estate market, and unwise corporate acquisitions

First of all, I want to congratulate you for making the tough decision of firing Mr. John Thain. Any executive that gets caught spending $1.2 million on an office renovation while the Corporation is in the process of laying off thousands of employees, destroying the life savings of thousands of its stockholders, and losing billion of dollars in sub prime mortgages, deserves more than a pink slip, he deserves…well we’ll have to wait until Jenna Bush is our first female president to bring back crucifixion or the guillotine. Can’t be too soon in my opinion.

Mr. Thain’s bum rush from the gilded halls of B of A’s New York office is but the first of several steps that must be taken to bring the bank back to lofty position of America’s largest investment house and restore its stock price from $6.30 to $45.08. It will not be easy bring BOA back to profitability after its stock price has fallen 86% but I think I can help the bank return to its once lofty position on the Olympus of Wall Street.

First it is important to state my qualifications to fill Mr. Thain’s shoes. I have had five years experience managing my private assets and have taken an initial of investment of $200,000 and tripled it. In real estate, I was fortunate to have benefited twice from Bakersfield’s once-booming real estate market. In 2002, I sold a condo in Kern City and bought a house in S.W. Bakersfield from sellers who were, to put it lightly, highly motivated. It soon doubled in price in the housing bubble collapsed in 2006. Fortunately, I have never viewed my house as an investment, but as a place to live and I don’t plan on moving until I have a stroke or something and wind up face down in the cream corn and have to move into a HOHOOHO—Home. Still, my house is worth more than I paid for it, provided I could find a fool dumb enough to buy it. Wait a minute, I just had a geat idea! Perhaps Mr. Thain or one of his former Merrill croniesay might be looking to downsize from their Manhattan properties. With your help, I am sure I could arrange a swap. Bakersfield real estate is just one of my many successful investments. I have also done fairly well investing in stocks.

The stock portion of my portfolio has benefited from the recent bull market of 2002-2006 and has held its value despite of the best of efforts of all those bozos (present company excluded) on Wall Street. This is due to the fact that one of the first things I did was fire my stockbroker (can you believe it that guy wanted me to buy unsecured FreddieNotes and Bristol Meyers at $42). He stopped cold-calling me with bad investment ideas once it dawned on him that I could read a bond prospectus and an annual report. I’ve made my share of mistakes as an investor by firing my stockbroker was not one of them. I’ve made even less mistakes since I decided to move most of my assets into either low-cost index fund or into stocks of companies that actually make things such as band-aids, electricity, water, and petroleum products. Even in the current bear market my portfolio has only lost 30% of its value compared to B of A’s 86% decline in market capitalization. Who knows with my track record B of A’s stock might soon be selling at $31 instead at $6.30.

The key to my success was to realize that I couldn’t beat all the so-called sharpies on Wall Street by trying to be a stock picker and that I had absolutely no talent trying to convince movie stars and Palm Beach socialites that my financial derivatives were capable of returning 14% per year because I had a guy named Rumplestiltskin who could turn straw into gold or subprime mortgages into AAA-rate mortgage bonds.

As I mentioned earlier I have considerable experience at firing stockbrokers and it appears that B of A and Wall Street in general have way to many of those folks handling other people’s money. Much better to get rid of the stockbrokers and encourage mom and pop investors to get into low-cost index funds and stay away from investing in stocks and alternative investments that have no basis in reality.

Needless to say, that my experience shows that if I were given an executive position at B of A, the organization would have to profoundly change the way it does business. It might have to go back to its old business model of taking deposits from ordinary citizens, paying a fair rate of interest and loaning the monies gained from those deposits at a higher rate of interests to companies and entrepreneurs who will create the new economy for the 21st century and eventually pay the bank back. Boring old banking as the new way to invest. A concept whose time has returned!!! I know it’s hard to believe that a bank could make money conducting its business like that. But at one time they did.

I know you are a busy man, I imagine you spend most of your time trying to figure out of if your stock options are still worth anything. But I hope to give my request for an interview serious consideration. I could say that you could do worse than hiring me to help you run your company, but then let’s be honest you have done pretty bad with out my help. I look forward to hearing from you soon.

Sincerely,

Capitano Tedeschi

Ca’ San Marco

Bakersfield.

30

Unconnected thoughts on events of my day. Did some reading today, while having coffee at Starbucks, I was reading Rumpole and the Angel of Death by John Moritmer. Mortimer was a barrister (Britspeak for lawyer) and a wonderful writer. His most popular character was Horace Rumpole, who was played by the late Leo McKern. I like to imagine that Mortimer is up in heaven, having a good claret with Leo McKern and arguing with St. Peter to let some "poor old darling" into heaven. One of my favorite passages from Rumpole is below.

"Our hotel was a plastic concrete nightmare of a building situated for the trading estate outside the nearest town. It had all the joys of piped music in the coffee shop, towels in a thiness contest with the lavatory paper, and waitresses who'd undergone lengthy training in the art of not allowing their eyes to be caught." Rumpole and the Way through the Woods by John Moritmer

The second book I am reading is Barack Obama's Dreams from My Father. This is a fascinating book and I am kicking myself for not reading it before the election. I can't help skipping and reading to see how things come out. My favorite passage so far, where he's talking about his grandparents, when he lived with them in 1970s Hawaii.

"Their principal excitment now came from new drapes of a stand alone freezer. It was as if they had bypassed the satisfactions that should come with the middle years, the convergence of maturity with time left, energy with means, a recognition of accomplishment that frees the spirit. At some point in my absence, they had decided to cut their losses and settle for hanging on. The saw no more destinations to hope for." Dreams from My Father by Barack Obama.

Read that passage and see if you are going to vegititate in front of the television and watch Lost or Desperate Housewives. I tried to veg, but instead got on the bike path and rode 9.3 miles. It was not a fun ride. I started out well and hoped for a 10-mile ride at a speed of 12 mph. Initially things went well and my speed starting out was 11.9 mph. But by the end of the ride I was slowly losing speed, my but hurt and my knees and legs were very tired. Still I was pleased with the ride.

I having burned a bunch of calories with my bike ride, I went to Moo Creamery . Moo Creamery is a new ice cream palour/restaurant that has just open on Truxtun Extension. They have burgers and pasteries and homemade ice cream. One of the ice cream flavors this evening, was "Bacon Love." I think I had once seen a Swedish Art Movie by that title once, so I passed on that flavor. I had a chocolate milkshake instead. They brought it out in a soda fountain glass and it was delicious. I'll probably never go back there again because chocolate milkshakes are like black tar heroin for me except that the milkshakes are chocolate.

Capitano Tedeschi

30

Thoughts on Obama's inauguration

Yesterday, January 20, 2009, Barack Obama became the 44th President of the United States. For me the inauguration began in Dec. 13th, 2008, when I met with a group of Obama supporters for a house meeting sponsored by the Obama campaign.



The goal of this house meeting was to come together and to to reflect on what we've accomplished and plan the future of this movement." So about 30 people met in a Westchester house in downtown Bakersfield, to reflect on the "future of the movement." We brainstormed about the issues raised in the campaign: healthcare, education, Iraq, the financial crisis.



The second part of the meeting was spent trying to determine a community service project we could do on the Martin Luther King Holiday. We were informed that President Elect Obama and Vice President Elect Biden were going to be doing community service projects that day. That impressed me at the time.



So we came up with a list of projects. The project we chose was to paint over graffiti in the area adjacent to Martin Luther King Park in Bakersfield. We were partnered with the Bakersfield Police Department's anti-graffiti program and Stop The Violence. That area was drive through country for me, so I got a chance to see how other people in Bakersfield lived. There is a lot of public housing around the park there are properties that are abandoned but also properties that are well-maintained. I was in a group of about 10 people and we walked east 4 blocks and then south another two and painted over graffiti in the Alley behind Clinica Sierra Vista's East Bakersfield Community Health Center. It was interesting to see the reactions of the people of the neighborhood. Children stared at us as if we were visitors from another planet, in my case Southwest Bakersfiled. Most of the adults smiled at us whether it was in gratitude because we were helping their community or amusement because were just a bunch of one-day do-gooders who would never walk through their neighborhood again, I don't know.

We spent about 90 minutes painting and when we had completed the job, we went back to the park to turning in our painting supplies. As soon as the painting was over, I went home and crashed. I was exhausted. But I was happy as well. The Obamas and Bidens did community service during the holiday and I had done community service with them as well.

Inauguration Day was like a holiday for which I had to go to work. It was a busy day for me I had a lot of work to do in the morning. At 9 a.m. one of my co-workers announced "it's official, he's been sworn in." When I heard that, I said "Free at last. Free at last. Thank God we are free at last."

After work I came home and watched the inauguration on CSPAN. I enjoyed President Obama's speech and the performance by Itzhak Perlman and Yo-Yo Ma. It was a powerful speech, both somber and sobering. It totally repudiated much of what was done by the previous administration and left no doubt that the path ahead will require hard work and sacrifice from all Americans. Meanwhile President Defect Bush sat listening to the trashing of what passes for his legacy.

The inauguration and its celebration is over and now real work must begin. I imagine I'll be doing more community work in the future, painting graffiti, writing to political representatives, or working to get certain leglislation passed. But after seven years of "partisanship, politicization and incompetence" as The Economist wrote in a briefing, such work is not only necessary but welcome.

Capitano Tedeschi

30

Solve California's Budget Crises Reform Prop 13!

“finally began the downward plunge which has brought us to the present time, when we can endure neither our vices or their cure” Livy

The news out of Sacramento is grim, The state of California is on the verge of walking over a fiscal cliff. The state is on the verge of partial bancruptcy. The California is facing an 18-month budget shortfall of $40 billion. Governor Arnold Schwarzenegger and Democrats in the legislature have been unable to come to any compromise to resolve the crisis.
According to the an article in the San Diego Union Tribune, the budget impasse will soon force the state to furlough workers and issue IOUs to thousands of people in lieu of tax refunds and student aid. The pain will start around Feb. 1, when the state will continue to make payments to bondholders and to public education. The state will begin to issue IOUs and furloughs at the end of February.

As a union member, I went to Sacramento in March to lobby the legislature regarding the budget. The problem is still the same. State law requires the legislature to approve a balanced budget and it also requires a two-thirds majority to do so. This would be difficult even in the best of times, but it has become practically impossible since then. The Democrats in the legislature have proposed 18 billion in spending cuts and 9.3 billion in tax increases. But the governor has vetoed these proposals because the democrats didn't give him everything that he requested. Meanwhile the Republicans in the legislature are biding their time until they can derail the whole process by refusing to approve any tax increases.

Unfortunately the budget can not be balanced by spending cuts. To do that, you'd have to stop all payments to individuals and cease to fund the California State University and University of California systems. The budget can't be balance by tax increases alone either. To do that would require raising California's income tax to 15.1%, introdue an oil severance tax and raise the corporate tax rate.

This depressing state of affairs will continue for another few weeks until the legislature and the governor reach some sort of compromise. This compromise will do little more than postpone the day a reconing for a few more months and years.

Perhaps it is time to reconsider the enduring cause of state's budget woes. That cause is Proposition 13. Perhaps it is time to reform Proposition 13. Smith and Lynch (2004) describe the passage of Proposition 13 as the “most notable property tax reform” p. 342. When it was passed in 1978:

This reform radically cut California property tax back to 1 percent of the market value and moved property assessment back to the 1975-76 rolls. In addition it provided for a 2 percent growth rate annually. California’s property tax rate moved from a 2.21 percent average effective tax rate to a 0.98 percent rate with that single reform (Smith & Lynch, 2004, p. 342).

Green (2005) states that “suddenly the state's property owners collectively owed 57% less in property taxes. Local government revenues fell by roughly $7 billion the first year alone.”

But the taxpayer revolt sparked by Propostion 13 did not end with its passage. According to Saxon, Hoene, and Erie (2002), California voters passed a series of initiatives that restricted local governments’ ability to collect revenue. In 1986, Proposition 62, which required a two thirds majority of voters for the passage of general fund taxes. Two years later, Proposition 98 was approved. This initiative required the state to devote 40 percent of its budget to education. In 1996, Proposition 218 was passed. Similar to Proposition 62, it required that all new fees and assessments be approved by a two-thirds vote of the affected electorate (Saxon, Hoene, and Erie, 2002, p. 427).

The effect of this spate of initiatives had three consequences. The first consequence was that by limiting property tax revenues, it diminished the revenue raising capabilities of city and counties and transferred it to the state. The second consequence is that Proposition 13 forced local governments to find other sources of revenue. So cities started balancing their budgets by raising sales taxes and user fees. The final consequence is that local governments were also forced to slash services that were deemed nonessential. In the post Proposition 13 world, the public has shown that it is willing to pay for police and fire protection, but that it is not willing to fund such things as libraries and parks.

One of the problems with Proposition 13 and other budgeting through the ballot box initiatives is that it has totally distorted revenues for both state and local governments. It is now painfully apparent that the State of California is in dire financial straights with structural deficits of approximately $10 billion at least through the year 2008. Neither economic growth or cutting state spending will totally close this gap. The state will soon no longer be able to borrow billions of dollars to paper over its deficits. As the Roman historian Livy said “finally began the downward plunge which has brought us to the present time, when we can endure neither our vices or their cure” (Foster, 1967, p. 7). So state government has come to a place where it can neither endure the consequences of Proposition 13 or effect some cure for it. Perhaps the time has come to ask the public to vote for a cure cure would be a constitutional convention. Green (2005) thinks it’s time for a change,

the measure's untoward consequences--from the disempowerment of local government to the decimation of a once-proud educational system, unequal taxes on equal properties and yawning tax loopholes for business--demand a rigorous reexamination of Proposition 13 and its legacy. In tax lingo, a reassessment.

Capitano Tedeschi

30

References

Foster, B. (1967). Livy in Fourteen Volumes: Books I and II. London. William Heinemann LTD.

Green, L. (2005, April 17). Don't be a 'Girlie Man'; As long as California is projecting a potential $10-billion deficit, governor, now is the right time to reconsider Prop. 13. Come on. Los Angeles Times, p. MAG.12. Retrieved October 15, 2005, from ABI/INFORM Global database.

Hoene, C. (2004). Fiscal Structure and the Post-Proposition 13 Fiscal Regime in California's Cities. Public Budgeting & Finance 24, 51-72. Retrieved October 15, 2005, from ABI/INFORM Global database.

Saxton, G. Hoene, C. &, Erie, S. (2002). Fiscal constraints and the loss of home rule: The long-term impacts of California's post-Proposition 13 fiscal regime. American Review of Public Administration 32, 423-454. Retrieved October 15, 2005, from ABI/INFORM Global database.

Smith, R. & Lynch, D. (2004). Public budgeting in America. Upper Saddle River, NJ: Pearson Prentice Hall

First Bike Ride of 2009

I had my first bike ride of the year Saturday afternoon. I am very grateful, the weather was sunny in the late afternoon. When I got up and went out into the morning fog for coffee and bagels, I didn't think the sun would ever come out. But it did, and for thirty-five minutes I rode my bike around the my neighborhood in southwest Bakersfield.

The air was cool and felt brisk. It was sunny with the pale straw yellow light of an early winter afternoon. My pace was slower than normal. That was due to the fact that I hadn't been on a bicycle in a while.

Cycling has taught me many things. It has taught me to be self-sufficient, I carry tubes and tools for all manner of emergencies. It has also taught me to evaluate risk and take action to avoid or eliminate them. There is great joy in being able of getting on a bicycle and riding a few or many miles. There times of great frustration as when I find I've run out of energy half way into a ride. Then, cycling isn't any fun and I am constantly nagged by the ruthless thought "the faster you pedal, the sooner you get there."

Capitano Tedeschi

30

Avoiding an Afghan Quagmire

With the eyes of the world focused on the Israeli-Palestinian conflict in Gaza, and the recent suicide bombing in Iraq, it is easy to lose track of America's war in Afghanistan.

It's a war that is going badly by many accounts. According to the BBC, the Taleban is planning to fight a 20-year war. New York Times columnist Bob Herbert laid out the dire prospects in a Jan. 5 editorial aptly entitled "The Afghan Quagmire" Herbert quotes retired U.S. Army Colonel Andrew Bracevich as saying

“Afghanistan will be a sinkhole,” he said, “consuming resources neither the U.S. military nor the U.S. government can afford to waste.”

As the American participation in the war in Iraq is being reduced, America is on the verge of increasing its committment of troops and resources in Afghanistan. We are very close to attempting what the Soviet Union attempted to do when it invaded Afghanistan in the 1980s, enter into a war which may be impossible to "win" in a conventional sense.

President Obama's task in this conflict is difficult. As Herbert points out our interests are simple and the current Karzai government is corrupt, incompetent and rapidly becoming upopular.

Our interest in Afghanistan is to prevent it from becoming a haven for terrorists bent on attacking us. That does not require the scale of military operations that the incoming administration is contemplating. It does not require a wholesale occupation. It does not require the endless funneling of human treasure and countless billions of taxpayer dollars to the Afghan government at the expense of rebuilding the United States, which is falling apart before our very eyes.

The government we are supporting in Afghanistan is a fetid hothouse of corruption, a government of gangsters and weasels whose customary salute is the upturned palm.

In the next few weeks, President Obama will have develop a new strategy for Afghanistan and educate and inform the American people the cost and consequences of the continuing Afghan conflict. Hopefully he will present a plan that does not force the United States to spend the next 20 years fighting the Taleban.

Capitano Tedeschi

30