Day: September 23, 2008

What a Difference A Year Makes

Remember a year ago when there were many Dem candidates and almost as many Repubs?  After a lengthy battle sometimes bitter on both sides, we are down to the Big Two, McCain and Obama.  In the beginning it was the war in Iraq and healthcare  The biggest,  most popular anti-war person became the Dem nominee and the biggest pro-war became the one for the Repubs.  Those were the good old days, eh?

Now just consider if this economic crisis had happened in January of 08.  If it had we would mostly likely be looking at two different candidates.  On the Repubs side it would probably be Mitt or Huckabee.  Why?  Mitt definitely has the upper hand on the economy and could have made his case when people would have been listening.  Then there was Huckabee with his conservative populism would also be in play today.

The Dems would most likely have Chris Dodd, simply because of his vast knowledge of the economy, it would have made him the more attractive of the Dems.  Also Hillary would probably be in the mix, simply because of her closeness to the Clinton years of good economic news.  And with the crisis facing the US, Edwards would have been the most likely to get the nod, his populism was playing well and would be very pertinent today.

McCain and Obama both would not have had the chops for the economic conversation.

What a diffrence a year makes.

Palin’s Speech, Not Spoken

Thousands attended Monday’s anti-Iran rally in New York City, and while the protesters had all the Israeli flags and comparisons between the Iranian government and Nazi Germany that one might expect of such an event, they had to do it all without two of the meeting’s more high profile speakers.

Republican Vice Presidential nominee Sarah Palin was a relatively late invitee, and after her participation was announced Senator Hillary Clinton, who reportedly was booked months in advance, canceled her appearance last week. Shortly after, the organizers disinvited Governor Palin, claiming to fear for their tax-exempt status if they didn’t have “equal representation of candidates” at the rally.

But the disinvitation did not prevent the McCain campaign from releasing the speech Governor Palin intended to give to the public. In the speech, she was to declare Iranian President Mahmoud Ahmadinejad a threat to the entire world and accused his government of seeking nuclear weapons. She called for additional sanctions against the Iranian government and called for President Ahmadinejad to be “held accountable for inciting genocide” under international law.

But she didn’t stop there, citing Iran as a new reason to continue the war in Iraq, claiming “if we retreat without leaving a stable Iraq, Iran’s nuclear ambitions will be bolstered.” She also accused the Iranian President of dreaming “of being an agent in a ‘Final Solution’ – the elimination of the Jewish people.”

President Ahmadinejad has many times harshly criticized the Israeli government, and has often predicted its impending collapse. Yet last week, defending comments made in August by Iranian Vice President Mashal, Ahmadinejad insisted that he has no hostility toward the Israeli people, but rather the “Zionist regime.”

Today In Labor History

23 September

The Workingman’s Advocate of Chicago publishes the first installment of The Other Side, by Martin A. Foran, president of the Coopers’ International Union. Believed to be the first novel by a trade union leader and some say the first working-class novel ever published in the U.S. – 1868

California Gov. Gray Davis (D) signs legislation making the state the first to offer workers paid family leave – 2002

Morgan Stanley Responds To The Bailout

The Wall Street that shaped the financial world for two decades ended last night, when Goldman Sachs Group Inc. and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.

The Federal Reserve’s approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.

The announcement paves the way for the two New York-based firms, both of which will now be regulated by the Fed, to build their deposit base, potentially through acquisitions. That will allow them to rely more heavily on deposits from retail customers instead of using money borrowed in the bond market — the leverage that led to the undoing of Bear Stearns and Lehman.

Morgan Stanley has taken $15.7 billion of writedowns and losses on mortgage-related securities and other types of loans since the credit crunch started last year. Goldman’s tally stands at about $4.9 billion. While both companies have remained profitable and avoided money-losing quarters suffered by Lehman and Merrill Lynch, their revenue from sales and trading and investment banking has been declining this year.

As bank holding companies, Goldman and Morgan Stanley will no longer be required to mark all of their assets to the current market values. Assets held in the bank divisions of the firms don’t have to be valued at market rates, potentially allowing the companies to allow further writedowns on the value of their holdings.

Ford’s 65 MPG Car

If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor, known widely for lumbering gas hogs.

Ford’s 2009 Fiesta ECOnetic goes on sale in November. But here’s the catch: Despite the car’s potential to transform Ford’s image and help it compete with Toyota Motor and Honda Motor in its home market, the company will sell the little fuel sipper only in Europe. “We know it’s an awesome vehicle,” says Ford America President Mark Fields. “But there are business reasons why we can’t sell it in the U.S.” The main one: The Fiesta ECOnetic runs on diesel.

Yet while half of all cars sold in Europe last year ran on diesel, the U.S. market remains relatively unfriendly to the fuel. Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline. Add to this the success of the Toyota Prius, and you can see why only 3% of cars in the U.S. use diesel. “Americans see hybrids as the darling,” says Global Insight auto analyst Philip Gott, “and diesel as old-tech.”

The question, of course, is whether the U.S. ever will embrace diesel fuel and allow automakers to achieve sufficient scale to make money on such vehicles. California certified VW and Mercedes diesel cars earlier this year, after a four-year ban. James N. Hall, of auto researcher 293 Analysts, says that bellwether state and the Northeast remain “hostile to diesel.” But the risk to Ford is that the fuel takes off, and the carmaker finds itself playing catch-up—despite having a serious diesel contender in its arsenal.

India Flexes Its Muscle

The Mumbai, an Indian warship, was slicing through choppy monsoon seas one recent morning when a helicopter swooped in overhead. Commandos slithered down a rope, seizing control of the destroyer.

It was a drill, Indian soldiers taking over an Indian ship. But the purpose was to train them to seize other countries’ ships in distant oceans, a sign of a new military assertiveness for the world’s second-most-populous nation.

India, which gave the world the idea of Gandhian nonviolence, has long derided the force-projecting ways of the great powers. It focused its own military on self-defense against two neighbors, Pakistan and China.

“India sees itself in a different light — not looking so much inward and looking at Pakistan, but globally,” said William S. Cohen, a secretary of defense in the Clinton administration who in his new role as a lobbyist represents American firms seeking weapons contracts in India. “It’s sending a signal that it’s going to be a big player.”

India is buying armaments that major powers like the United States use to operate far from home: aircraft carriers, giant C-130J transport planes and airborne refueling tankers. Meanwhile, India has helped to build a small air base in Tajikistan that it will share with its host country. It is modern India’s first military outpost on foreign soil.

India’s buildup has several overlapping motivations. It now trades vigorously with the world, most critically in oil. It has bought oil fields or engaged in exploration in Iran, Iraq, Libya, Russia, Sudan, Syria, Vietnam and beyond. Not coincidentally, it has demonstrated a new interest in keeping the sea lanes through which that oil and other wares sail free of pirates and militants.

A more robust military is also vital for protecting millions of Indian workers in the Persian Gulf, who are from time to time threatened by political volatility. But the most pressing motivation may be the fast-moving Chinese.