Wind Energy Cronyism in Maryland

March 17, 2011 at 10:33 am

The Washington Post reports:

Maryland Gov. Martin O'Malley's childhood friend and right-hand man for a decade stands to gain from the governor's ambitious plan to subsidize development of an estimated $1.5 billion offshore wind farm...As the governor's chief of staff, Enright was deeply involved with energy issues but later said he never significantly contributed to the administration's wind energy policy. Before he left the governor's office in January 2010, he requested an ethics review clearing him and his new employer to work on the wind energy initiative. Weeks later, Beowulf Energy and Enright filed paperwork with the state identifying the company as an interested developer of offshore wind.

According to the Post, Enright "became fast friends with O'Malley at age 14, was a football buddy in high school and became O'Malley's first deputy mayor in Baltimore and ultimately his chief of staff in Annapolis."

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Goldman's Opportunism

March 17, 2011 at 10:07 am

A front-page news article in today's Wall Street Journal tries to make it sound like Rajat Gupta was somehow insulting his then-colleagues on the board of Goldman Sachs by calling them opportunistic.

Says the Journal: "the tapes also have revealed what some of capitalism's chieftains have been saying about their colleagues and associates behind their backs. It isn't pretty....A former Goldman Sachs Group Inc. director calls his fellow board members an 'opportunistic group.'"

More: "Mr. Gupta called fellow Goldman directors 'an opportunistic group,' saying that though they believed commercial banking was a low-return business, they might buy Wachovia Corp. if it were 'a good deal.' Goldman, which didn't buy Wachovia, declined to comment."

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Advice, How to, and Miscellaneous?

March 17, 2011 at 9:50 am

What do Mike Huckabee's A Simple Government, Dick Morris and Eileen McGann's Revolt, and Frank Luntz's Win! have in common?

They are all new and strong-selling books by right-of-center authors, and the New York Times has chosen to categorize them as "Advice and Miscellaneous" rather than as "nonfiction."

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Second Liens and Firsts

March 17, 2011 at 9:07 am

From a column in today's New York Times provided by ProPublica, a non-profit news organization:

Bill Frey, who runs Greenwich Financial Services, has instigated lawsuits to try to recoup the value of mortgage securities by getting the banks to buy back faulty mortgages that were in the pools he examined....

Mr. Frey argues that the banks should charge off those seconds. "That's the concept of subordination," he said. "It's been around since the Magna Carta. Maybe we should get on the bandwagon."

This is not simply a fight between hedge funds, which own the securities that contain the first liens, and banks that house the seconds. Many mortgage securities are held by small banks, life insurance companies and pension funds. "I can see little reason why a pensioner should take the loss instead of Bank of America, when it's Bank of America's bad loan," Mr. Frey said.

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A 25% Top Tax Rate

March 16, 2011 at 11:10 pm

Roughly ten years ago there was a small dinner in Brooklyn Heights to mark the departure of Amity Shlaes from the editorial board of the Wall Street Journal and her accession to a column at the Financial Times. The dinner was held at a now-defunct restaurant around the corner from the home of the then-editor of the Journal, Robert L. Bartley. Another editor in attendance was Robert Thomson, then the editor of the U.S. edition of the Financial Times, now the managing editor of the Wall Street Journal.

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Stein's Sentence

March 16, 2011 at 3:06 pm

The former president of the New York City Council, Andrew Stein, got off with a sentence of 500 hours of community service and no prison time for failing to pay taxes on $1 million in income, the New York Times reports. I'm all for lower income taxes, and maybe I'm missing something, but I think the New York Post editorial has it about right when it calls the sentence a slap on the wrist and writes, "As if the average person would get off so easy after ripping off the federal government for millions."

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Bollinger Plumps for Al Jazeera

March 15, 2011 at 11:05 pm

Lee Bollinger, Columbia University's $1,753,984-a-year president who also serves as chairman of the board of the Federal Reserve Bank of New York, has an article in Bloomberg Businessweek arguing that the Federal Communications Commission should force cable companies to carry Al Jazeera. He describes access to the channel as "critically valuable" to "our democracy" and to "America's understanding of the world."

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Wachtell, the SEC, and Management

March 15, 2011 at 9:30 pm

The New York Times catches the law firm Wachtell, Lipton, Rosen & Katz asking the Securities and Exchange Commission to use the force of government to protect the firm's entrenched management clients by, as the Times puts it, amending the takeover rules "to limit the ability of hedge funds to quickly acquire positions in companies." The Times writer explains:

The small reporting change being proposed could significantly chill hedge fund activism and further entrench management.

The battle is only one front in the larger war against hedge funds. Companies are trying to place increased burdens on hedge fund activism. For example, companies are increasingly using poison pills to block activism. Family Dollar recently adopted a shareholder rights plan to limit investors to a 10 percent stake over the next year.

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Schumer's Yacht Subsidy

March 15, 2011 at 11:09 am

For all the talk about spending cuts and austerity in Washington, there are still plenty of signs the politicians just don't get it. Senator Schumer, Democrat of New York, has issued a press release bragging about obtaining for a Rochester, New York marina a $1,450,000 grant from the federal Department of the Interior's "Boating Infrastructure Grant" program.

According to the press release, "Senator Schumer wrote directly to high ranking program officials in support of this application."

Also according to the press release, "Grantees use Boating Infrastructure Grant funds to construct, renovate, and maintain facilities with features for transient boats (those staying 10 days or less) that are 26 feet or more in length and used for recreation."

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Savings Start With Us Act

March 15, 2011 at 10:19 am

A newly elected Republican congressman from the state of Washington, Jaime Herrera Beutler, earlier this month introduced her first piece of federal legislation: the "Savings Start With Us Act" that would cut the salaries of the president, the vice president, and members of Congress by 10%. Her press release is here. She explains: "My friends and neighbors in Southwest Washington have been tightening their belts for years, and it's time elected leaders in Washington, DC joined them....We've voted to reduce our massive deficit by billions in order to create a better environment for job creators – but we haven't cut a dime from our own paychecks. The savings ought to start with us."

The text of the bill is as follows:

A BILL

To provide for a 10-percent reduction in pay for Members of Congress, the President, and the Vice President.

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Recalling Mayor Alvarez

March 15, 2011 at 10:02 am

A recall vote is underway today against Mayor Carlos Alvarez of Miami-Dade County in Florida, who has proposed raising property taxes while using his "government car allowance to help pay for a BMW," the New York Times reports.

This is a pretty good encapsulation of the frustration that a lot of Americans feel about their government — in one way or another, the politicians want to raise taxes on the private sector so the government employees can keep driving their BMWs at taxpayer expense.

I know, the commenters will say that by far the bulk of government spending goes to things like police and fire and health care and education, not BMWs for mayors. But on a symbolic level, the BMW resonates, because it gets to the deeper issue, which is the sense of entitlement on display by some of these politicians and government officials. They are supposed to be public servants but somehow matters have gotten turned around so that the public is serving them.

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Kerry's Infrastructure Bank

March 15, 2011 at 9:15 am

Read it here first: In commenting over the weekend about Senator Kerry's plan for a $10 billion or $600 billion "federal infrastructure bank," I said, "infrastructure spending is a big favorite of the Chamber of Commerce." Today Mike Allen's Politico Playbook reports that Chamber of Commerce CEO Tom Donahue will appear with Mr. Kerry today to endorse the proposal. So will Republican senator Kay Bailey Hutchison of Texas.

Mr. Allen quotes an anonymous Kerry aide as saying, ""This legislation is John Kerry's climate change effort of 2011 – meaning he's going to throw his heart and soul into it." Mr. Allen is too polite to suggest an alternative meaning – that, like the climate change legislation, it's not going to pass.

Meanwhile, over at Bloomberg News, Amity Shlaes has a column skeptical about the effects of infrastructure spending:

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Manhattan Mom Sues Preschool

March 14, 2011 at 9:34 pm

From the New York Daily News, here is one ready-made for Overlawyered.com:

A Manhattan mom is suing a $19,000-a-year preschool, claiming it jeopardized her daughter's chances of getting into an elite private school because she had to slum with younger kids.

Nicole Imprescia yanked 4-year-old Lucia from the York Avenue Preschool last fall, angry the tyke was stuck learning about shapes and colors with tots half her age - when she should have been prepping for a standardized test....

Imprescia's court papers suggest the school may have damaged Lucia's chances of getting into a top college, citing an article that identifies preschools as the first step to "the Ivy League."

The suit reportedly seeks a refund and class-action status.

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Citibank Raises Check Reorder Fees

March 14, 2011 at 9:11 pm

Citibank has raised its fees for re-ordering consumer checks by 19%, to $24.95 an order from the $20.95 they were charging in September 2010.

I called to reorder checks, and when the representative said it would be $24.95, I asked if it was a price increase. He claimed he didn't know. I asked if he could check. He put me on hold and said he couldn't see the last time I ordered checks so he couldn't tell. After I got off the phone I looked it up myself on an old statement.

Like the $20-a-month fee to have a checking account at Citi with a balance of less than $6,000 and the 33% increase in fees for the use of non-Citibank ATMs that were reported here earlier, this is just another example of how, far from protecting consumers, President Obama's credit card reform law and Dodd-Frank financial reform are hurting consumers. At least with the account fees, customers got some notice, as opposed to the check re-order, which the bank didn't even acknowledge had increased.

Where's Elizabeth Warren when you need her?

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Obama on College Graduates

March 14, 2011 at 1:58 pm

"The best economic policy is one that produces more college graduates," President Obama said in a speech today on education. "I'm confident these reforms will help us meet the goal that I set when I took office -– which is, by the end of the decade we will once again have the highest proportion of college graduates in the world. We'll be number one again. That's my priority. "

Nothing against college graduates — I am one myself — but it seems to have escaped the president's notice that some of the most successful entrepreneurs in modern America, including Microsoft's Bill Gates and Paul Allen, Apple's Steve Jobs, Facebook's Mark Zuckerberg, Enterprise Rent-a-Car's Jack Taylor, Oracle's Larry Ellison, Dell computer's Michael Dell, movie and music producer David Geffen, and Las Vegas Sands CEO Sheldon Adelson — are not college graduates.

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