The Icing And The Cake-Jamie Dimon And Edward Conard

The Icing And The Cake-Jamie Dimon And Edward Conard

You may have heard that JPMorgan Chase has suffered a large loss-the preliminary reports are at least $2 Billion, and the number may eventually rise to twice that

It might occur to you to ask what Chase, with its army of dark suited French-blue shirted souls smilingly collecting deposits that pay no interest, could possibly do to lose $2 Billion.  I remember, as a child, taking a locked heavy-duty canvas bag with the night deposit from my Dad’s pharmacy, walking a couple of blocks, and dropping it down the bronze chute to some unseen all-night teller.  It took a lot of pills and lipsticks and deodorants and boxes of Barton’s candies to make a $1,000 deposit, so I imagine that my Dad would be very upset if the bank lost that bag.  A quick back-of-the-envelope calculation tells me that $2 Billion is actually two million Canvas Bags, which might make for an interesting Two Million Bag March on Wall Street.  Since each of those bags were roughly 8’’ by 11”,  that would imply a line of bags forty feet wide stretching the length of Manhattan.  Quite the motorcade.

So, how does one lose that many bags?  Fortunately, that’s a question lesser minds (like mine) can explore.  Chase lost their bags through something called a hedge.  Some of us think “hedge” sounds either horticultural or very sleek and exotic, like “hedge fund”, where highly trained quants divine subtle signs in mathematical tea leaves to bet stupendous amounts of money and win untold quantities of bags (and other baubles).  Rich people can invest in hedge funds-perhaps because they have a better affinity for numbers. Rank and file folk like me aren’t “Qualified Investors” and are pretty much relegated to putting our bags in a bank, like Chase.

Chase’s leader, Jamie Dimon, has been out there on the Sunday talk show circuit, manfully pronouncing mea culpa (actually, it’s more like a “someone else was culpa,” as three other heads have rolled.) 

What Mr. Dimon has owned up to is that traders in the London office (I promised it was sleek and exotic) working on behalf of the bank’s chief investment office were engaging in hedging activities, and these hedging activities went a tad awry.  How does one go awry in hedging bags?  Isn’t the very act of hedging supposed to be a limitation of risk, like a bookie laying off bets so he can make his money on the vigorish?  Isn’t that what a bank’s chief investment office supposed to do, manage risk?  Well, yes, and no.  Chase’s chief investment office wanted to manage risk, but it also wanted to be a profit center, and as the saying goes, “no risk, no reward”.  So, in search of the reward, known in Chase by the very descriptive term, the “Icing”, they took the risk.

Ok, so let’s just sum up for a moment.  A bank collects bags from people like my Dad and lends money out at higher rates, providing capital for people to grow their business, buy houses, etc.  So far, so good, and that’s what banks did (usually quite prudently) for decades after the Great Depression.  The FDIC insured, so if ignorant people like myself were suddenly seized with irrational fear and tried to grab back those bags all at once, the rest of the bank’s depositors would be sure to get theirs back.

Unfortunately, we are talking about low-tech locked canvas bags, producing merely moderate vast wealth.  Not enough glamour, and not enough Icing.  So, the banks went to their friends in Congress (from both parties), managed to get “regulatory relief” and the in-house pastry chefs really began to bake.

You may recall a minor economic global catastrophe back in 2008, where the bag collectors had a bit of a sugar high.  Fortunately, we bag depositors were there to bail them out with our tax dollars, an irony which seems to have been lost on many of them.  An effort to balance the risk going forward led to Dodd-Frank and Volcker Rule, the intent of which is to curtail some of the more gymnastic impulses of those banks with the bags.  These reforms, supported by Mr. Obama, have been vociferously objected to by Wall Street, with Mr. Dimon at the forefront, and the entire Republican Party.  No Wall Street cash for Donkey this election cycle.

The Chase mini-disaster might be just another news blip if it weren’t so artfully juxtaposed with the upcoming release of former Bain (and Romney) partner Edward Conard’s book, “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong”.  Mr. Conard was interviewed for the May 1, 2012 Times Sunday Magazine by Adam Davidson, and the article has to be read-I can’t do it justice.

Mr. Conard’s point of view, in short, is that income disparity is good, and huge income disparity is better.  The wealthy know how to invest capital for growth and innovation, while the unwashed merely spend it on consumables (like food). Therefore, government policies need, for the good of all of us, to enhance the opportunities of the wealthy to become even more so.  Conard blames the little meltdown in 2008 on ignorant bag-holders who made a run on the banks, not those Icing-seeking types.  Conard likes government insurance-in fact he wants an even bigger fund to be created using taxpayer money. He doesn’t like any other type of government regulation.  And he has a special disdain for Warren Buffett.  Buffett is failing society by giving billions to charity when he (Buffett) could invest it so much better.

Davidson’s article is hard to digest, because Conard can come off like a smoking jacket garbed Marie Antoinette-his disdain for the less successful is palpable, and his ideas appear to socialize risk while privatizing profit.  But they should been taken seriously, if not to the extreme he does.  There is an association between capital formation and innovation, albeit not Conard’s conflating Bain’s extractive financial engineering with Apple’s incredible contributions to productivity and pleasure.

It’s the kind of discussion our political leadership should be having when they look at how we regulate, who we tax, and how much we take away in entitlement reforms. And stark though they may be, Conard's views may be representative of many in the GOP, and their nominee.

Who takes the risk, who gets the Icing, and who gets the cake?  Are there any leftovers?

Food for thought?

MM

What Mariano Rivera And Dick Lugar Know About Everything

What Mariano Rivera And Dick Lugar Know About Everything

The great Yankee relief pitcher Mariano Rivera tore up his knee last week, ending his season, and quite possibly, his career. 

The senior Senator from Indiana, Dick Lugar, will be torn out of his job today, losing in the Republican Primary to State Treasurer Richard Mourdock.  His political career, except perhaps in an appointed role, is probably over.

We are poorer for both these losses.

Rivera was the embodiment of grace under fire, quiet efficiency, and class. If you love baseball, as I do, you know that there are only a handful of players who achieve a certain level of excellence in this sport of highly refined skills.  Baseball is far more like golf or tennis than the other major sports.  Athleticism helps, but there is also a mental aspect to the game, a certain discipline and even ruthlessness you need when trying to do something that is exquisitely difficult for mere mortals. Rivera had those qualities, but conducted himself in a manner than earned universal respect.

Lugar was a consistent conservative on social and economic issues, but he made his real mark on foreign policy and defense issues.  Notably, he worked across the aisle with people like Sam Nunn, the conservative Democratic Senator from North Carolina, on truly existential issues of the day, including arms control.  His great accomplishments include significant reductions in nuclear arsenals pointed at the United States and efforts at keeping those weapons away from rogue states.  A man of intellect with a grasp of complexity, he was also a person of grace and class.  Lugar advanced the cause of his state and his nation, and there are few things I can think of to be a better epitaph for a politician.

Rivera was unique. By most calculations, both statistical and from contemporary evaluations, he is the best relief pitcher of all time. Baseball fans may disagree as to where he rates among all pitchers, but, for comparison's sake, there is a statistic that normalizes Earned Run Average among pitchers in relationship to a seasonal mean of 100.  The highest mark by a starter was Pedro Martinez at 154, followed by the Hall of Fame great Walter Johnson at 148. The second highest ranked relief pitcher with at least 1000 innings pitched is Hoyt Willhelm at 147.  Rivera is at 206, a number so ridiculous it looks like a typo. 

When Lugar was just 35, he won the mayoralty of Indianapolis, and his time was marked plaudits from both sides of the aisle for innovative approaches to difficult problems.  He narrowly lost his first race for the Senate to the legendary Birch Bayh, but crushed the incumbent Democratic Vance Hartke two years later, and is now ending his sixth term.  He (was) so popular that six years ago, the Democrats did not even run a candidate against him, and he got 87% of the vote. 

Sadly, a career that spans 36 years in the Senate also straddles a time of intensifying partisanship.  In 1977, when Lugar was sworn in, the Senate and House had its share of small-mindedness, but it also had people of real ability, thoughtful and forward thinking, willing to fight like cats and dogs when necessary, but able to do big things together when the nation’s interests were at stake.  36 years later, the Dick Lugars of the world are rapidly becoming extinct and the Senate and House leaderships are filled with mediocre strivers.

Why should I, a Democrat worried about a GOP takeover of the Senate, mourn for the loss of a conservative Republican, particularly when Mourdock is a polarizing figure who ran a bare-knuckled campaign and who might more beatable?  It just doesn’t feel right in my gut.  Mourdock was recently quoted as saying  “the time for being collegial is past…It’s time for confrontation.”  Another nihilist, just what we all need. 

Mourdock isn’t an aberration.  All across the country, moderates of both parties are being driven from office, and in Indiana, the situation is particularly acute.  Along with Lugar, Evan Bayh, along with the Blue Dogs Baron Hill and Brad Ellsworth, are gone, and Joe Donnelly will likely lose to Mourdock.

Obviously, as a New Yorker, I have very little feel for Indiana politics. So I wrote a local conservative columnist, and he was gracious enough to reply.  He said, in effect, that there were two types of GOP Mourdock voters.  The first group were indeed the ones who wanted confrontation.  And the second were people looking for more energy than the 80 year-old Lugar could give.

I found that a little comforting, that it wasn’t all about the anger.   I sometimes think that the next great laboratory of change will be the Midwest, out of necessity.  It has a great many problems and discordant elements; social conservatives and more liberal university towns, large unions, wealth and poverty, farms, mining and shipping, reeling rust-belt cities barely hanging on to their industrial base.  The Midwest must evolve and all these interests have to be reconciled. There’s a lot going on there right now, from the slashing partisanship of Wisconsin’s Governor Scott Walker, to the more cerebral and less confrontational experimentation of Indiana Governor Mitch Daniels, who seems to have something of the early Lugar in him-he has a distinct ideology, but is more problem solver than spoils collector. 

Short term, things don’t look good.  Politics as cage match, with good people the casualties. The Yankees aren’t doing too well, either. But, I found a couple of grace notes.  Rivera announced he was going to rehab and come back in 2013.  And a conservative columnist from Indiana took the time to speak kindly about my city and of his family and mine. 

I think I’m going to bank on Mariano and the Midwest. You have to have hope.

MM 

Citizens United Meets Duckpins For Dollars

Citizens United Meets Duckpins For Dollars

When I was in college there was a television show called Duckpins for Dollars, which pitted local denizens against each other in fierce duckpin contests for very small amounts of money.

Duckpins are miniature bowling pins, and you try to knock them down by throwing a bocce-sized duckpin bowling ball.  Then, you jump up and down when you manage a strike, droop your head when you miss a spare, and otherwise ham it up for the camera while hoping to score a 300 (and $50).  Duckpins for Dollars was half game show, half reality show, and all visionary in creating cheap programming.

I happened to attend a very nerdy but reasonably esteemed institution of higher learning.  We were all very clever and highly educated elitist young men and women.  So we reveled in the working class tomfoolery, the poly satin bowling shirts, the funny accents, and the occasional dental challenges of “Yucks For Bucks”.  Not much of a price for dignity, but they seemed to be having fun.

I hadn’t thought of Duckpins For Dollars until I saw an article in the New York Times, chronicling the efforts of Mitt Romney’s son Tagg, and Spencer Zwick (Mitt’s 2008 chief fundraiser) as they sought to create a private equity firm.  Their aim was true, to the tune of nearly a quarter of a billion dollars, and that fund (named Solamere) now throws off annual fees considerably in excess of the $50 they might have won on Duckpins (even adjusted for inflation). 

Did Tagg or Zwick have experience in private equity?  No, they didn’t.  Who invested in Solamere?  Well, as you might have expected, Mom and Dad kicked in-as I would for my children, albeit with a few missing zeros.  After that seed corn, 60-plus friends of the Romney clan-political friends, business associates, colleagues, campaign contributors, etc.

Solamere has fairly done well and delivered a decent return to investors.  It’s also been been run with an eye towards containing administrative expenses.  To that end, it showed frugality by first sharing an office address with the Romney campaign headquarters in Boston. Later, the company was located in the same building as Mr. Romney’s leadership PAC, Free and Strong America.

Mr. Zwick did nicely for himself elsewhere. While he was heading Solamere’s fund-raising in 2008 and 2009, he multitasked by raising money for Free and Strong.  The PAC paid his finance consulting firm direct fees of $425,000.00.  And there’s other cross-pollination between the campaign, the PAC, and Solamere, with people doing double duty, all one big happy family.

This, as my late father would have said, is the way of the world.  The wealthy and the powerful have each other’s backs.  And money needs a good home, so a quarter-billion just isn’t all that much among friends.

It is logical to ask whether we should care that there’s a potential relationship between Tagg, some of his investors, Mitt, and Mitt’s PAC.  Would President Mitt be influenced?  I am inclined to give him the benefit of the doubt, if for no other reason that I can’t think of anyone who more embodies the idea of doing what's good for business than Mitt Romney. I don’t think he needs the incentive.

The late California politician Jesse Unruh was quoted as saying “money is the mother’s milk of politics”.  That was in 1966, and not much has changed since then.  There’s always been money available; in little sealed packets, by checks, to PACs, from businesses, from unions, through bundlers, through the front door and the back.  There’s “walking around money” pressed into the palms of locals by advance men for campaigns.  In Jimmy Breslin’s book about Watergate, “How The Good Guys Finally Won” Breslin writes about how the young Tip O’Neill was flabbergasted to see the cold hard cash that was handed to JFK’s men.  So, let’s not get our backs up too much when we find out that politics is a game where the dollar is well respected.

Unfortunately, Citizen’s United has completely changed the game, by amplifying those dollars exponentially.  The silly $200 campaign contribution limits are gone, obviating the need for some of the more glamorous skullduggery.  Now, unlimited, perfectly legal and confidential contributions funneled through Super Pacs, organizations like ALEC, and “dark money groups” rule the roost. No more high-fiving for a $50 strike.

Imagine the Congressman or Senator locked in a tight race, and a lobbyist for some special interest group sidles up to him and says, “Congressman, you know that legislation coming through your committee? Well, we have some concerns and some drafting suggestions.  By the way, we’ve always admired your fair-mindedness, even when you didn’t agree with our position, and we’d like to express that by helping out a bit in November.”

Can you blame businesses for trying to acquire that type of access?  Corporations may, in Mitt’s memorable phrase, be people too, but they have no immortal soul-they exist to make profits.  If a perfectly legal contribution to a Congressman can deliver up favorable legislation that produces a high return on investment, why wouldn’t you make it? 

Can every politician be bought?  Of course not, but if you were that Congressman, you wouldn’t be human if you didn’t at least listen. It’s good to be a Congressman. And it’s really good to be a Senator.  So, faced with the reality of holding your nose a little for a teensy vote, or possibly being sent packing to less glamorous locales, maybe you hold your nose.

Is this good for the mere rank and file citizen?  Not really, but that’s where Solamere and Duckpins can serve as an inspiration. If wealthy folk can all bond together for fun and profit, why not the rest of us?

There were 131,313,820 votes cast in the last presidential election.  Subtract the one percent and that leaves 130 million voters.  If each of us kicked in just ten measly dollars, that’s $1.3 Billion, which starts to get us into Karl Rove territory.  Heck, maybe we could begin buying back some of our wayward leaders?

It’s a start. Fellow Citizens, let’s unite. Just a thought from a Yuck with Ten Bucks.

MM

The Choo Choo And The Caboose

The Choo Choo And The Caboose

I wonder if anyone has read the 10^th Amendment recently?  “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  You might call this the “In Charge” Amendment.

The Tenth is the favorite amendment of recalcitrant and ambitious Governors who have decided that, in the immortal words of Frank Hague, the late Mayor of Jersey City, “I am the Law.”  The Tenth is also beloved by special interests that chafe at Federal regulation when there are more sympathetic state regulators.  And the States Rights folks especially admire the Tenth when the President is of the opposite party.  The Tenth is, pure and simple, about who has power and what they can do with it.

This week, the Tenth is going to get a test, as the Supreme Court will consider it in relation to Arizona’s SB-1070, Arizona’s new immigration law.  Governor Jan Brewer and Sherriff Joe aren’t fans of Mr. Obama.  So when it comes to international relations between the United States and Mexico, Governor Brewer wants to be in charge.

Meanwhile, the other news out of Washington is that Congress has reconvened, with the same spirit of selflessness and cooperation it adjourned with.  And with Mitt’s nomination now virtually assured, he might have hoped to tack back to the middle.  Mitt lives to tack, but House Republicans have put the kibosh on that. “We’re not a cheerleading squad,” said Representative Jeff Landry, an outspoken freshman from Louisiana. “We’re the conductor. We’re supposed to drive the train.”  In Washington, freshman Representative Landry and his fellow “conductors” are in charge. 

As we continue our travels, we find that the Minnesota Vikings, whose storied history includes the mighty defensive line known as the Purple People Eaters, have been looking to munch on the taxpayers of the North Star State.  Unless the legislature coughs up a $975 Million dollar stadium to replace the abject slum they are forced to perform in, they may just be forced to “take their talents elsewhere.”   True, Minnesota just went through a state shutdown that involved gutting basic services in order to pay for tax breaks. But the Vikings have needs that far surpass schools, cops, sanitation, etc. so Minnesota either needs to pay up, or suffer the consequences.  I suppose that makes the Vikings in charge as well. 

Takes your breath away, doesn’t it?  Looming budget crisis, Afghanistan, Iran, deficits, unemployment, crumbling infrastructure, and instead of leadership, it’s become like blue light special time at the old Korvettes, except the merchandise is money, access, and power.   If it’s not nailed down, grab it and put it in your basket. If it is nailed down, pry it up off the floor and put it in your basket. 

Anyone out there daring to think big?  And, when I mean big, I’m not implying something like the Brinks Robbery, where you make off with the whole armored car?  Big, as in genuinely and realistically trying to plan for the nation’s long term economic needs and challenges?  Big, as in bargaining with the other side to achieve some consensus so the deal can stick long term?

It’s not coming from the GOP, where the leadership excels only in parliamentary tactics, robo-criticism of Mr. Obama, and a keen eye for personal advancement.  Come January of next year, the GOP plans to be in charge, so why bargain now when you can take what you want later?

And let’s not give Mr. Obama and the Democrats a free pass either. Where’s the vision?  Where’s the seriousness? Simpson-Bowles, imperfect as it is, would have been serious.  But, if the best thing they can bring to the table is the Buffett Rule, then they have run out of ideas as well.  Yes, we all know the GOP is dominated by people who want to turn the country into a theocratic, kleptocratic autocracy.  But for policy, Democrats, how about something more contemporary than a “Maude” rerun?

Tom Friedman of the New York Times just wrote a column suggesting Michael Bloomberg run as a third party candidate.  I’m for it.  I live in this great city, and, hypercritical (and Democratic) New Yorker that I am, I have to say for all Bloomberg’s many mistakes my city is safer and cleaner, the schools are better, parks and museums more beautiful and more accessible, the overall quality of life better than it was during the Administrations of his predecessors, both Republican and Democratic.

Bloomberg brings three things to the table that I see completely absent elsewhere. First, he doesn’t make a party game out of blasting the government-he accepts the fact that it has a role to play and tries to make it work.  Second, while Romney talks about being a businessman, Bloomberg is a businessman.  Romney was a moneyman and rearranger of assets.  Bloomberg is a builder-he put together an empire by assembling it piece-by-piece, adapting to market conditions, and taking different approaches to solve problems.  He is results oriented instead of hidebound to some sort of ideological purity-an approach we desperately need.  Finally, Bloomberg loves his city, and he wants to improve it-all of it, not just for the people who voted for him. That makes him a rarity among contemporary politicians. 

Run, Mike.  I don’t know if I would vote for you, but I’d love to see the debates-I’d love to see you get between the two candidates and demand they do better.  Right now, the Choo Choo always seems to be led for the benefit of the winners, and the Caboose is packed with everyone else.  How ironic would it be if Mike Bloomberg, multi-billionaire, ended up as the “Tenth Amendment” candidate-of the people, or, in Friedman’s words, “an unpaid lobbyist for the country — and for the next generation of Americans.”

Mike Bloomberg for Candidate?  Not the snappiest of slogans, but I think it can sing.

MM

Mitt’s eHarmony Crisis And Other Chromosomal Issues

Mitt’s eHarmony Crisis And Other Chromosomal Issues

There is an interesting piece in the Washington Post by the conservative columnist Michael Gerson, “How Romney Can Solve His Woman Problem”.

A series of national and battleground state polls have shown that while men (and particularly white men) clearly prefer Romney, that advantage is swamped by President Obama’s even wider margin among women. 

Both men have been trotting out events to show their sensitivity to women’s issues.  Romney even has come up with a bizarre statistic to show that over 90% of the burden of the economic downturn has fallen exclusively on women -which is going to come a surprise to many people I know.  

These photo-ops, with the two men up on their respective podia, flanked by a phalanx of women, have the eerie asymmetry of a photo of Richard Nixon wearing a lei on a visit to Hawaii-while it appears to be real, you suspect photo-shopping.   

And, like many men (as my wife and daughter can surely attest to) both Romney and Obama seem to be not entirely surefooted when dealing with the opposite sex. 

Mitt is now in fugue, shuttling back and forth between sensitivity and manliness.  Off he went to the NRA to declare his unbending and eternal fealty to the rights of every man (and woman) to own a State militia’s worth of assault weapons.  Mitt has always been with them, he says. Never mind his record as Governor of Massachusetts, it was his evil twin Tim who snuck into the Statehouse and signed all those bills.  Tim, fortunately, has been confined to a pleasant place in the Berkshires where Lawrence Welk reruns play continuously in the background and everyone wears white. 

Mr. Obama, for his part, isn’t having the best of luck. First, there was the untimely and incredibly poorly chosen comments by Hilary Rosen, who is either a no-one looking for spare airtime, or the tightest of tight Obama advisors who has a double suite of offices in the White House and takes the first and last calls Mr. Obama makes every day (the Fox News version).  Mitt’s campaign has (thankfully) latched on to this, and ordered a huge quantity of commemorative t-shirts, to be airlifted to battleground states.

Then, the President’s South American Spring Break trip really has gone a little sour, with what might delicately be described as an excess of Y chromosomal behavior.  You do wonder where these folks parents are-I always tell my kids don’t do something that you don’t want a future employer to see on YouTube.  Naturally, Darrell Issa needed to launch an immediate (and completely non-partisan investigation) and all of Congress has been falling all over themselves in outrage over this atrociousness.  As an aside on the YouTube front, I’m a little surprised all these Members aren’t just a little more circumspect.  Not that any of them have at any time been willfully unfaithful to their (current) spouses but, as Newt himself said last year, patriotism can sometimes lead one to be so focused on the good of the nation that sacrifices have to be made at home.  Country first.

While I don’t think either Hilary or hijinks are going to quickly fade, it is worth going back to Gerson’s article, and why women still seem to be trending for Mr. Obama.  The GOP’s problem, he says,  “is the perception that it has become too ideological on many issues. Women and independent voters have seen a party enthusiastically confirming its most damaging stereotypes. The composite Republican candidate — reflecting the party’s ideological mean — has been harsh on immigration, confrontational on social issues, simplistic in condemning government and silent on the struggles of the poor. How many women would find this profile appealing on eHarmony?”

I've never been on eHarmony, but does this mean women are smarter than men, or simply more selective in whom they would date?  Again, and even putting aside the fun in Columbia, maybe women are smarter. Gerson suggests that a little sweet-talking might soothe the way; checkered tablecloth, candles, gypsy violin, and some compassionate conservatism (Gerson used to work for Dubya).  Mitt should show he cares, in perhaps a more personal way than a power-point presentation one would use at a private equity dog and pony show. 

Can Mitt do it?  Man up, but in an emotive and caring way?  Feed the base, but somehow tell women he values and adores them?  Reading Gerson, I found myself somehow reminded of Julian Fast’s book “Body Language” which devotes a fair amount of time on how to woo.  Fast talks about this off-Broadway sketch he went to where the actor and actress did nothing but read a list of 100 vegetables.  But all in French, and with all the Simone Signoret and Yves Montand Gauloise-puffing and passionate enunciating they could muster. 

I’m having a hard time keeping that vision in my head.  Yes, I know Mitt slummed it in Paris, but speaking French is so….Kerry-like.  And both Signoret and Montand were refused visas to enter the United States in the 50’s because of their left-leaning politics.  So, maybe that’s a poor model.  

Gerson can do better.  “There are plenty of sound conservative and free-market reforms that can be applied to improving the lives of the vulnerable.”  You would have to admit, those are powerful and even seductive words.   I wonder how you say "job-creator" in French. 

MM

Rick Retires And Newt Bounces A Check

Rick Retires And Newt Bounces A Check

Rick Santorum has officially “suspended” his campaign.  For the uninitiated, you “suspend” a campaign rather than have it humanely destroyed because a suspended campaign can still collect contributions, which may go towards paying off any campaign debt.  In a serendipitous coincidence, Tim Pawlenty also ended his campaign today, formally bringing an end to that cheerful chap’s 2012 Presidential hopes.  Yin meets yang.

Contrary to some expectations, the end of Rick’s campaign is not a harbinger of the Rapture or the beginning of a new era of rampant immorality.  Nor does it automatically signal that Mitt can accept Caesar’s wreath quite yet.  Ron Paul is still there, albeit unencumbered by too many delegates.  And Newt, brave Newt, soldiers on, like Napoleon’s troops retreating from the Russian Winter, their arms left in the snow, the fallen placed on carts, tattered clothing too thin against the cold, tramping endlessly, shivering and malnourished, but carrying with them the hope of glory.

Onwards he goes, through the fetid thicket of absurdly moderate Northeast states, hoping to hack his way to the fertile ground of the South and Southwest, and the fine conservative stock of the Great Plains.  But, this Jobian effort has one final moment of irony.  The very last primary, on June 26, is Utah. What exactly Newt thinks he’s going to accomplish in Utah remains to be seen, but right now he has some damage control to do.  It seems that the check for his filing fee has bounced, and if he doesn’t make good on it by April 20, he’s going to be bounced from the ballot as well.  According to Utah law (Code 76-6-505) it also turns out that if Newt fails to make the actual payment on the “dishonored” amount, it’s a Class A misdemeanor.  It does leave us wondering if there’s some sort of bench warrant that could be issued for him if he decides to campaign in the Beehive State. 

The fact is, the cupboard is pretty bare in Newt-land. The Utah check was all of $500.00.  The campaign owes roughly $4.5 million as of last report and the “unaligned” superpac funded by Mr. Adelson (of neighboring, sin-free Nevada) is drying up.   In response, Newt has issued statements akin to Jefferson Davis after the fall of Richmond “Relieved from the necessity of guarding cities and particular points, important but not vital to our defense…nothing is now needed to render our triumph certain but the exhibition of our own unquenchable resolve.”  In Newt’s case, the resolve is certainly unquenched, but the flesh appears to be a bit weak.

It is often true that in defeat, one is afforded a opportunity for the dignity and respect that was absent during the actual campaign.  So it is with Rick, who chose Gettysburg as the site of his farewell speech.  He wrapped himself in Lincoln; “What I tried to bring to the battle was what Abraham Lincoln brought to this battlefield back in 1863 on November 19^th.”.    You might be surprised that a politician whose primary focus seemed to be installing a domestic theocracy could possibly envision himself as the heir to a man who literally gave his life in the cause of human dignity, but, as Lincoln himself said in his Second Inaugural, in relation to the South’s aspirations,  "let us judge not, lest we not be judged.”   At least Rick didn’t quote Gandhi.

Where do we go from here?  Santorum couldn’t quite bring himself to endorse Romney, as his wounds from being out spent, out organized, and out campaigned seemed quite fresh.  Notwithstanding that, his conservative supporters, particularly from the evangelical right (Ralph Reed, Richard Land, Tony Perkins) will push for a cabinet post for him. If that doesn’t work out, the consensus is that he will land in the soft and succoring and plush arms of Fox.

Still, there is a message in Santorum’s comparative success.  I was struck by a statement from Ralph Reed, “He got into the race with virtually no endorsements, very little money, and he was an asterisk in the polls….And he ends the race having won 11 states and over 3 million votes, which is the most since any insurgent conservative candidate since Reagan.”  It reminded me of Varinia’s line at the end of 1960’s “Spartacus”.  "He was a man who began all alone. Yet on the day he died, thousands would gladly have died in his place."

Santorum’s journey, from a failed politician to subsequent mini-deification akin to the slave who rose to challenge corrupt and pagan Rome, is an important one.  In the marketplace of political influence, there are a lot of vendors out there,  but only some that can deliver a real wallop.  When you couple the unlimited spending by superpacs such as Karl Rove’s Crossroads with the fervor of the true believers, you merge turnout with overwhelming economic muscle.

The real question is what price Romney will have to pay for the foot soldiers when the conventional wisdom is that he needs to move to the center.   It turns out, it may not have to be much of a price at all. Courtesy of Christian Heinze, writing in “The Hill”, this morning’s rumor is Huckabee for Veep.  Mike is charming, he’s folksy, he’s well liked by women, and he’s just launched a new radio show, with Mitt as his first guest.

One might reasonably ask how Huckabee,  an ordained minister, could be pals with a man he once witheringly described as “having no soul”?  There’s nothing like the power of redemption, I suppose.  Or the redemptive power of power?

MM

The Wrenching Reality Of Romney

The Wrenching Reality Of Romney

Three more primaries, and the grim and joyless march to a Romney nomination continues. 

There is bleakness about this, like an early Ingmar Bergman film.  In memory, it all seems in black in white, personalities splayed against a barren and forbidding landscape.  Soon the young Max Von Sydow will appear on the screen, ready to play chess with Death, hoping to distract the Grim Reaper long enough so that others may escape.

But no escape is really possible.  As in the old sword and sandal epics, slowly, one contestant after another is called, dispatched, and the pale corpses of the departed litter the road like ancients gladiators after a battle, stripped of their armor, left to the carrion-eaters and Fox talent recruiters.

When Wisconsin’s results rolled in, Romney was ebullient. While this was no smashing victory, he won a clear, albeit moderate (in a sternly conservative moderate way) plurality and scooped up the delegates.  This, coupled with wins in Maryland and Washington, gave him what appeared to be an almost insurmountable lead. One handicapper now says Romney has a 96.5% chance of getting the requisite number of delegates before the convention.  For all but the die-hards, it’s mathematically over.

But what of the others, those left behind?  Ron Paul remains missing, although he did take the bronze in Wisconsin and a second (of three) in Washington.  Ron has his ideas and his appeal, and raw numbers are less relevant, and he will soldier on honorably without interference. The tragedy of Ron Paul is that no one of influence cares about what he says, and they should.

Newt’s quixotic campaign continues, but black-hooded, pale-faced Death is beckoning.  No medalling in any of the primaries, and no prizes for Mr. Congeniality either. The bell has tolled for Newt, and although he may not care to listen, he runs the risk of being treated like an unsightly patch of eczema, annoying, but mostly ignored. 

Rick?  A harder nut.  He should have done better in Wisconsin, with the GOP electorate feverishly defending Scott Walker, the current Governor and patron saint of labor-hatred.  But Rick wasn’t nimble enough and Mitt out-flanked him, quickly moving to seize Walker’s clammy hand. And the establishment has begun to close ranks. Marco Rubio is now wearing a tailored Mitt T-shirt.  Former President George H.W. Bush has brought his top-siders, and Paul Ryan has ordered his VP special edition smoking jacket. 

What to do with Rick?  He is pinning his hopes on his Pennsylvania redoubt. But time isn’t on his side; Pennsylvania is three weeks away, and his support is eroding by the day.  Rick, autodidact brawler that he may be, is going to have to give in to the inevitable.  He knows it.  He’s mad, but he knows it.

The conservative columnist and author Peggy Noonan sometimes talks about “grace”.   The grace she experienced writing for Ronald Reagan and basking in his sunshiny personality, the grace she thought the older generation of Washington power brokers showed, fighting like cats and dogs when necessary, but also working things out.  Noonan presently indulges herself in a particular dislike for Mr. Obama, and a more than a little selective amnesia, but she’s correct. There’s no grace here right now, just an abiding sourness.

There is a price for all this finger pointing and scolding.  It has become the defining narrative of the primary campaign;  a lack of joy,  a lack of really big personalities talking substantively about big issues, a race to the bottom of a barrel of anger and accusations.  The GOP party pros know it. They worry they may squander an election against a definitely beatable President by fielding an unlikable candidate supporting an unpleasant platform.  So, the move to shove Rick and Newt aside isn’t just to focus all the big guns on Mr. Obama-it’s also self-protection-let’s stop talking about things that are so very unpopular with everyone but the base.   

Mr. Obama has been fighting back.  Yesterday, he took apart the Ryan Plan.  Earlier in the week, he (perhaps ill-advisedly) critiqued the Supreme Court.  Predictably, the GOP expressed shock and horror;  imagine, an elected official criticizing legislating from the bench-how very awful!

They might all take heed of Noonan.  In a column for the Wall Street Journal, she wrote “What will be needed this autumn is a new bipartisan forbearance, a kind of patriotic grace. This is a great deal to hope for. The president should ask for it, and show it…Would it help if the president were graceful, humble, and asked for help? Why, yes. Would it help if he credited those who opposed him with not only good motives but also actual wisdom? Yes. And if he tried it, it would make news…. And I don't see how anyone can think grace and generosity of spirit wouldn't help. They would. They always do in big debates.”

Timely, even timeless advice, don’t you think?  Patriotic grace and a bipartisan forbearance.  Words to live by. 

In case you are curious, she published that column September 1, 2007.  A lot of people must have been out of town that day.

MM