In Other News...

...Maverick Johny has waved the white flag and cut and run in Michigan.

Blog of the Week

Newcomer Richard S. Oliver has a great post on Obama. I was gonna cut and paste it and claim to have written it myself, but decided to link to it at the last moment.

The Making of a High School Teacher

Mr. Frank worked in Crappy Junior High School as a TPD, an old name for an unappointed pedagogue working temporary-per-diem to fill those ubiquitous wooden teacher chairs. He had one class that was particularly unruly. This was a remarkable class in that they'd burned through a dozen teachers in less that two months.

Mr. Frank was determined not to follow in their footsteps. He noticed that one of the big trouble spots was the back door, from which various of his students would escape, and large numbers of his students' friends would enter. He also noticed a portable closet which the custodians had dumped into the room. Mr. Frank moved the closet against the back door, blocking it completely.

After two weeks, the class gave up on Mr. Frank. He wasn't going anywhere, so they reluctantly sat down. A passing administrator dropped in and commented, "I've never seen this class quiet before."

The administrator went back to her office and marveled over Mr. Frank's uncanny abilities. She then roamed the school again, selected the five most unruly classes in the building, and rewrote them into a schedule, with which she presented Mr. Frank the following day.

Mr. Frank responded by walking two blocks to the nearest high school. He told the principal that he wanted to teach at that level, that he'd teach any classes whatsoever, and that he'd be very grateful if they could offer him anything. As it happened, the prinicipal was impressed by his initiative, and gave him a program immediately.

The administrator at Crappy JHS told Mr. Frank he couldn't do this. Mr. Frank replied he was not appointed, that not only could he do it, but that he had already done it. She withheld Mr. Frank's check for a month until she received a mildly threatening letter from Mr. Frank's cousin, a lawyer.

And over twenty years later, Mr. Frank is still teaching high school.

35-Cent Gas

It was someone's lucky day.

Fair and Balanced

I've been seeing this video around the net for a few days, and it makes me marvel yet again at the Fox motto. I remember when Hillary first ran for Senator, they had a GOP Congressman, balanced by a Democratic Congressman, Floyd Flake. Only Mr. Flake was supporting Rick Lazio, the Republican, for Senator.

During the buildup to the Iraq War, I watched as the got the POV of a Republican Senator, and balanced it with the POV of Fred Thompson, a retired Republican Senator. Here's a Fox reporter surveying a room, finding between zero and one McCain supporters, and determining the room has a mixed opinion:

Should Mayor Bloomberg Defy the Will of the Voters?

Answer here.

Thanks to Schoolgal

Check Out the Carnival...

...of education, right here.

The Ineffectual Reforms of Bloomberg / Klein

To commemorate Mayor Bloomberg's decision to seek a third term, despite the will of the people, here's a guest post by Sarah Scrafford:

We’ve heard of sweeping changes in education that are meant to usher in a wave of revolution, and there couldn’t be a better example than that championed by New York City mayor Michael Bloomberg soon after he was elected to office in 2002. In a controversial move that still raises the hackles of many educators and academics, the mayor, along with his appointee Chancellor Joel Klein, took control of the city’s education system that includes over 1,400 schools, 80,000 teachers, 6,000 staff members working at both the central and regional levels, and 1.1 million students, and introduced a common curriculum and various other reforms. Six years down the line, we see why those reforms have been proved to be ineffectual:

• In spite of promising a back-to-basics curriculum, the reforms saw the introduction of the Month-by-Month Phonics reading program (and the simultaneous cancellation of the successful, phonetics-based, Success For All reading program) and the Everyday Math elementary mathematics program. The former is a misnomer that does not address the needs of students from low income and minority households with its whole language approach. New York University professor Diane Ravitch, a fierce critic of these reforms, says that this approach works only for kids who grow up in a literacy-rich environment that is augmented with the availability of and access to books and reading material. The elementary math program has come in for its share of criticism from university mathematicians who are of the opinion that it does not address how basic computational skills are taught.
• The regime has been accused of falsifying scores to claim success where there is none; the claims of a 12 percent increase in Reading and a 19 percent increase in Math scores are inflated, according to Professor Ravitch, who says that scores from the year 2002 - 2003 have been included in these statistics, which means that they do not count. Bloomberg introduced his reforms only in September 2003, although they had been in the pipeline since early 2002. Without the 6 percent increase in Reading and the 15 percent in Math in 2002 - 2003, the figures read a dismal 6.4 percent rise in Reading and only 4.2 percent in Mathematics.
• Those in charge of effecting the reforms have been accused of micromanagement, of dictating a common curriculum that takes authority away from teachers (and parents) and tells them not just what to teach but how to teach and when to teach as well.
• New York City’s educational budget has grown from $12.5 billion per year to $20 billion under the aegis of Mayor Bloomberg and Klein, a massive increase in costs that has not been justified in terms of results. According to the National Assessment of Educational Programs (NAEP) scores of 2007, there was no significant improvement in 4^th Grade Mathematics, 8^th Grade Reading and 8^th Grade Mathematics. The only area that did show some improvement, 4^th Grade Reading, comprised a record 25 percent of English Language Learner students whose scores are accommodated or adjusted on account of their handicap.
• There has been no real improvement in the performance of blacks, whites, Hispanics, Asians and low income students between 2003 and 2007, the years Mayor Bloomberg’s reforms took shape, according to statistics from NAEP.
• The scores prove that black students in New York City performed better than their counterparts in New York State, a fact that has led the Bloomberg & Co. to claim an achievement in terms of closing the racial gap. But this figure does not take into account the performances of New York City black students when compared to whites and Asians in the same area, thus ignoring the racial gap that exists and widens by the day.
• New York City was the only one of the 11 tested by NAEP to have scores decline in 8^th Grade Reading for blacks, Hispanics and low income students.
• Larger schools have been broken up into smaller schools with 500 students or less each under the reforms, with the new ones struggling with inexperienced teachers and low academic standards and discipline. To make matters worse, poor planning has forced most of these new schools to remain unopened, with the result that students allocated to these schools are now forced to be accommodated at the remaining larger schools which are overflowing beyond their capacities.

Amidst all this criticism and complaining, only one thing remains certain - that the children of New York City are being bandied about with nary a thought to their education as the adults continue to rule on what’s best for them academically. The all-important question is still unanswered - are the reforms making sure that they are getting education of a better quality?

This article is contributed by Sarah Scrafford, who regularly writes on the subject of top top online universities. She invites your questions, comments and freelancing job inquiries at her email address: sarah.scrafford25@gmail.com.

Bloomberg Will Seek a Third Term

So says The New York Times:

The move represents an about-face for Mr. Bloomberg, who has repeatedly said he supports term limits and once called an effort to revise the law “disgusting.” He will apparently try to do so through legislation in the City Council, rather than the ballot box

So much for the will of the people. So much for Mr. Bloomberg's word. And so much for UFT President Randi Weingarten's much ballyhooed promise that we'd "negotiated" our last contract with Bloomberg and Klein.

Mr. Bloomberg has much in common with President GW Bush, pictured at left, including utterly ineffectual education policies, the adoring approval of Maverick Johny McCain, open hostility toward unions and a willingness to welcome torturers like Uzbek dictator Islam Karimov, also pictured at left (Mr. Karimov, incidentally, appears to share Mr. Bloomberg's disdain for term limits).

Unlike President Bush, however, Mayor Bloomberg got into office via acquiring more votes than his opponent, and is widely acknowledged to have bought the office he now holds fair and square.

Update (Thanks to 14 More Years): Act to maintain term limits.

Why I'm Dubious

The last eight years we have been fed a load of b.s from the White House, the political establishment and the media over a host of issues from the Iraq war to the economy that has many people skeptical about the true nature of the current financial crisis or what CNBC's Erin Burnett called "Economic Armageddon" yesterday.

Cunning Realist, himself an investment professional, captures that dubiousness here:

Part of the public's skepticism is a natural reaction to the now-transparent language of deception and hysteria. When you've trafficked in mushroom clouds and Persian Hitlers for eight years, "imminent financial Armageddon" loses a bit of its edge. Hearing the administration and its media flacks suddenly and in concert (almost as if a memo went out, eh?) warn of a latter-day Great Depression and push this as "it's not a bailout, it's a buy-in" sets off alarm bells for anyone who's been sentient in recent years. Orwell's revenge, maybe...

That's it exactly - it feels like the White House, coordinating with the RNC, Drudge, Murdoch's FOX News/Wall Street Journal, and their shills in the rest of the media, are sending out a load of jive about potential Economic Armageddon to scare America into supporting a huge bail-out of Wall Street firms and banks that took huge risks and now want a safety net for them.

Notice that these same folks crying for $700 billion dollars to buy up bad debts and mortgages were the same folks telling us that the odious bankruptcy bill of a few years had to passed into law so that individual bankruptcies would be harder to come by for Americans, even those in financial trouble due to medical bills.

They were also the same people telling us the "Bush Boom" was the best story never told while only the top 5% of the country made any economic gains throughout the past eight years.

It's funny how that works - the big guys who scored big-time the last eight years get the bail-outs while the little guys, the ones who didn't score big-time the last eight years, get the shaft - even if their debts came from enormous medical bills, lack of medical insurance, etc.

In the meantime, the guys who created this mess, the smarmy financial CEO's and crooked hedge fund managers, all seem to be getting out with golden parachutes, as the cliche goes:

the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates. WaMu was not immediately available for comment.

No wonder congressmen and congresswomen were receiving calls 100-1 against this bail out bill. People are pissed off that at the same time all the usual hysterics are declaring mushroom clouds over Wall Street and Economic Armageddon if taxpayers don't write a $700 trillion check to them, the WaMu CEO is jumping from his sinking ship with almost $20 million for a couple of weeks work.

And yet, some people who are not part of the Bush/Greenspan/Murdoch team of hysterics, are saying we really do need this bail-out bill to pass or the consequences will be dire:

Everywhere you turn, focus is fixated on the financial crisis and the merits of proposed solutions. We discussed the shifting structure numerous times—Martial Law for the Markets, Back in the U.S.S.A.!, Shock & Awe—and offered time and price are the only true solutions for what ails us.

The caveat in allowing that natural process to take place resides in the DNA of the disease. As a card-carrying free market guy—someone who built several careers on the backbone of capitalism—I would like nothing better than to see the markets self-correct.

As a derivatives trader of 17 years however—someone who earned his stripes at Mother Morgan (MS), ran a multi-billion dollar derivative portfolio and was president of a $400 million hedge fund—I understand the profound consequences of letting them do so.

We live in a finance-based economy, one that is tied together with upwards of $500 trillion notional derivatives. Allowing institutions to fail—in many cases, deservedly so—would set off a chain reaction like dominoes laced with dynamite that would suck any corporation with finance-based operations into a cataclysmic abyss.

That list could conceivably include the likes of General Motors (GM), General Electric (GE), Target (TGT), Ford (F) and yes, JP Morgan (JPM), Bank America and Citigroup (C).

In other words, it would be game over, freeze and seize, complete chaos.

Scary stuff - but words like these lose their meaning after so many other "crises" these past few years where we were told we had to act within 48 hours or the world would end. The fact that the Dow is up over 200 points as of 10:10 AM and world markets didn't collapse overnight also leads me to be skeptical of the need for a bail-out.

It seems to me the boys on Wall Street and in the corporate board rooms want to have taxpayers take their bad debts off the books for them so that they can start with a clean slate and DO THE WHOLE THING OVER AGAIN.

To paraphrase Atrios, the Wall Street boys are sad the party is over and they want the punch bowl back so that can restart the party.

Stories like the $20 million severance packages to the WaMu CEO for a few weeks' work surely don't dispel this feeling do they?

In the end, the Congress will probably pass a bail out bill by the end of the week, the markets will be back up on the news, the boys on CNBC and elsewhere will be saying we've finally hit bottom in this (how many times have we heard that from the supposed "experts") and then in a few more weeks the credit market will seize up again and we'll be told we need to write another $___ billion dollar check or the world will end.

And in the meantime, what is all this printing of money at the Fed going to do to price stability in the future? So far we have fought a war in Afghanistan and a war in Iraq, financed the Bush tax cuts and spent $1.3 trillion dollars on bailouts of Bear Sterns, Fannie & Freddie, AIG and perhaps the bail out bill and put it all on the nation's credit card.

Isn't that kind of debting the behavior that set this financial crisis into motion in the first place?

Crawling from the Wreckage

Bob Herbert speculates on what happens when the inmates take over the asylum:

George H.W. Bush warned us about “voodoo economics” in 1980, but the ideologues clamped a gag on him and put him on the Gipper’s ticket. For much of the time since then, the madmen of the right have carried the day. They were freed of their remaining few restraints with the ascendance of George W. Bush in 2000.

These were the reckless clowns who led us into the foolish multitrillion-dollar debacle in Iraq and who crafted tax policies that enormously benefited millionaires and billionaires while at the same time ran up staggering amounts of government debt. This is the crowd that contributed mightily to the greatest disparities in wealth in the U.S. since the gilded age.

This was the crowd that cut the cords of corporate and financial regulations and in myriad other ways gleefully hacked away at the best interests of the United States.

Now we’re looking into the abyss.

When President Bush went on television last week to drum up support for the bailout package, he looked almost dazed, like someone who’d just climbed out of an auto wreck.

“Our entire economy is in danger,” he said.

He should have said that he, along with his irresponsible Republican colleagues and their running buddies in the corporate and financial sectors, put the entire economy in danger. John McCain and his economic main man, Phil (“this is a mental recession”) Gramm, were right there running with them.

And over at electoral-vote.com, they're commenting on Maverick Johny's unique take on leadership:

John McCain blamed the failure of the House bill on the Democrats, even though 60% of the Democrats voted for the bill and only 33% of the Republican did so. The old Maverick McCain would have said: "Government interference in the markets is a bad thing, something Republicans understand and Democrats don't, so we defeated this evil bill." But Candidate McCain knew that would not sell so well, so he didn't say it. McCain clearly realizes that his suspending his campaign and zipping off to Washington to provide leadership doesn't look so great now that the bill went down to defeat not because the Democrats opposed it, but because 2/3 of the House Republicans opposed it. Who is the real leader now that Nancy Pelosi got of majority of her people behind the bill but McCain was unable to rally more than 1/3 of his troops and all eight members of the Arizona congressional delegation--four Republicans and four Democrats--voted against it?

Armageddon

Erin Burnett on MSNBC just moments ago (I'm paraphrasing): "People on Wall Street are saying if the banks and financial institutions do not get some bailout money soon, it will be economic armageddon."

Uh, huh.

Let's be frank here. A bunch of banks and financial institutions lent out a bunch of money to people they shouldn't have lent money to, then leveraged themselves 40 to 1 and now that so many of these loans and mortgages have gone bad and the chips are being called in, nobody's got the money that's owed.

It's not a liquidity problem Wall Street is suffering from. It's an insolvency problem. Many banks and financial institutions are insolvent, many Americans themselves are insolvent, and the federal government printing $1.3 trillion dollars to buy up these bad mortgages and bail out these insolvent institutions is nuts. All that is going to do is a) create a huge inflation problem down the road while b) creating a moral hazard problem where these crooked hedge fund managers and greedy traders are going to say "Hey, as long as you're as big as WaMu and AIG you can do whatever you want because you're too big to fail and the government will always be there to bail you out."

Let the bad debts and bad loans run through the system. Let some banks go belly up. Let people start losing their money, their homes, their retirements.

And then maybe, just maybe, Americans will finally wake up to the fact that you cannot live for so long so far above your means before the bill comes due.

It's unfortunate that it has come to this and innocent people, prudent people (including your humble blogger), are going to be hurt in the process. But this problem was self-created.

Remember when Preznut Bush told us after 9/11 that our patriotic duty was to go shopping and buy stuff? Remember how Uncle Alan Greenspan told Americans they should trade in their old 30 year fixed rate mortgages for 2/28 ARMs and use the money to build an extension on the house, buy a car or go on vacation? Remember how salaries for the overwhelming majority of Americans has fallen over the last 8 years, adjusted for inflation, even as the consumption of those same Americans has increased? Remember how the total debt level of Americans at an individual, and municipal, state, and federal level is 250% of GDP? Remember how Americans' net savings rate the past few years is negative? Remember how we financed our "housing boom" (Ha - how's that boom look now?) with money from the Chinese while the prices of both residential and commercial real estate zoomed way above historic (and sustainable) norms?

All these talking heads on the Tee Vee and the politicians and the Wall Street crooks and even Mom and Pop American ought to stop whining about this mess, take a look in the mirror and say "What was my responsibility for this? How did I contribute to it? And what can I do to fix the problem?"

Here's a start - pay your freaking bills, stop buying what you can't afford, save some money and make any of these politicians who tell you consumption is the American way and regulation of the financial markets is communist pay at the ballot box and send 'em back to the Texas desert. Next, create a financial system that is transparent and understandable rather than opaque and labyrthine. So many of these problems started because 20-something and 30-something smarties on Wall Street created these "innovative" financial products that were so complex that even they didn't understand all the ins and outs of them (or what the consequences would be once problems started) while they paid themselves huge money for creating wealth from nothing. That's a start for fixing the problem.

Finally, hold on tight. Because no matter where you have your money now (indeed if you have any), it's worth less and less each day. And that problem is only going to get worse .

BTW, the bail out bill that went down to defeat today in the House probably wasn't going to fix the problems anyway, so forget what Erin Burnett and Jim Cramer and these other shills are saying. The problem IS the system, they're just apologists for it.

Make no mistake, these are scary times, and the people who claim to know what the solution is have been wrong about every other solution they have tried so far.

Oh, and don't forget to duck, cover and roll when you go to the bank tomorrow to get your money.

The Reign of Terror

The lunch bandit lurked among us for years. And he didn't just steal your lunch--that would be too prosaic. He would steal the cheese from your sandwich and leave the rest. Or he'd stick his hand in your salad and leave an imprint just to let you know he'd been there. We all chipped in and bought a new refrigerator for the men's lounge, and bought keys for everyone who paid.

But one day after we locked it, the lunch bandit broke it. It was frustrating. We speculated it must be that crazy sub who was always screaming about politics. Or maybe it was the other one, the one who never stopped talking about who knows what. But the lunch bandit struck on days they weren't in the building, and one by one, we ruled them out.

Then one day, Mr. Quiet told me he saw the bandit, and wouldn't tell me who it was, only that his tie had gotten caught in the fridge when he saw him. But there were only two of us who actually wore ties, and since it wasn't me, I knew who it was. I had long stopped leaving my lunch there anyway.

About a year later, after Mr. Quiet was victimized 7 or 8 times over a three week period, Dr. Normal received a note in his mailbox. It said, "We know who you are. Stop doing this."

Dr. Normal approached me. "Why did you leave me this note?" he asked. But I hadn't left it, and I told him so.

Dr. Normal never set foot in the men's lounge again, no one's lunch was touched again, and Dr. Normal retired at the end of the year. Everyone was surprised, because Dr. Normal was so blatantly ordinary.

But still waters run insane.

Apparently.

Head of Skate

Private Donors Running Short

In Mayor Bloomberg's New York, this means experimental ineffectual crappy "reform" programs could be in serious jeopardy. Fortunately, none of these funds are frittered away on things like class size reduction or relieving the rampant overcrowding that has typified Mayor Mike's tenure.

New Yorkers can still count on the highest class sizes in the state, and city kids will continue to study in trailers, closets, bathrooms, hallways, and whatever space that isn't needed for sports stadiums.

How Arbitrary Are School Ratings?

Extremely, says the New York Times. How else do you explain a system that offers merit pay to schools it's closing?

Blog of the Week

Here's a real DC teacher dealing with the union-busting, teacher-bashing, no accomplishments, no proof of ever having been an effective teacher herself Michelle Rhee.

Socialism (for the Needy)

I commented on this the other day, but I'm still amazed that this gets no play whatsoever in MSM. Whatever you may feel about socialism, in other countries it provides health care, college education, and care for senior citizens (while working Americans mortgage their homes to send their kids to college and go bankrupt due to catastrophic medical emergencies).

Here, socialism is used to bail out companies who gamble with other people's money. I get the feeling our country is of the corporation, for the corporation, and by the corporation.

It's unconscionable.

The process of privatizing profits and socializing losses is simply insane. Even if Canada's health care is as bad as its opponents say (which I don't believe), we could provide something much better than the nothing we now offer our citizens if we'd stop spending billions on pointless war and bailing out those who deserve nothing more than the failure they've so richly worked for.

Last night's debate was impressive in that it was not simply the dueling soundbites we've come to expect from presidential debates. Most notable was Mr. McCain railing against earmarks, which he said constituted up to 18 billion. Mr. McCain condemned Obama for accepting almost a billion in earmarks for his state before renouncing them a year ago.

When Obama said Mr. McCain's tax plan called for 300 billion in tax cuts for those who need them least, Maverick Johny pointedly ignored him (In fact, he wouldn't even look at him). Clearly the policy of enriching the rich and providing nothing whatsoever for the disappearing middle class (let alone the poor) would continue under a McCain administration.

It's time for a change, and that certainly doesn't entail a GOP executive plainly touting more of the same.

The Carnival Is in Town...

...as close as this.

Sinking Fast

Last night Washington Mutual became the largest bank failure in United States history.

Wachovia looks like it will be the next bank to go belly-up.

And Institutional Risk Analytics, using FDIC data, lists Bank of America, Chase, Citigroup and HSBC as additional big banks at risk for failure.

Helluva Bush economy we got here, eh?

Well, I suppose Helicopter Ben Bernanke can just shower trillions more on Wall Street and the rest of the country via the Federal Reserve printing press and permanently low, low, low interest rates if and when those babies go belly-up too.

That should solve the problems...

Or maybe not.