by Gilles d'Aymery
"The safest way to double your money is to fold it over and put it in your pocket."
—Kin Hubbard (1868-1930)
(Swans - May 4, 2009) BEHIND THE HEADLINES: According to the Commerce Department, the US economy contracted at a 6.3 percent rate during the fourth quarter of 2008 and at a 6.1 percent rate during the first quarter of 2009. If this trend continues the 2009 GDP could take a close-to $1 trillion haircut, not a particularly rejoicing perspective. April sales of Chrysler were down 48%. Those of GM, 33% (with Hummer, Saturn, Pontiac, and Saab as much as 55%) and Ford, 32%. If you still buy the line that these dismal results are due to the bad, bad, bad UAW and the retirees' pensions peddled by the politicos, then please explain Toyota's results -- down a whopping 42%. Three additional banks failed for a total of 32 so far this year, at a cost of $5.3 billion to the Deposit Insurance Fund. Job losses in April, not yet formally announced at the time of this writing, should once again top 600,000. Economists and other bean counters try hard to compare this downturn to the recession of the early 1980s, but the current situation is far worse as the following stats demonstrate.
Comparison between the first quarter of 1982 and the first quarter of 2009, respectively:
Credit market debt as percentage of GDP: 172% and 370%
Federal debt as percentage of GDP: 27 and 45
Household debt as percentage of GDP: 47 and 96
Financial debt as percentage of GDP: 22 and 117
Federal deficit as percentage of GDP: 3.2 and 14.3
Household debt service ratio: 10.7 and 13.9
Mortgage debt as percentage of GDP: 31 and 73
Mortgage debt as % of disposable personal income: 43 and 98
Household liquidity as percentage of liabilities: 145 and 81
Equities as percentage of household net worth: 8.1 and 17
Personal savings rate: 11.5 and near zero
10-year US Treasury bonds: 14.6 and 2.8
Fed funds: 13.2 and 0
Annual Consumer Price Index: 8.3 and 0
(Source: contraryinvestor.com)
YES, YES, I CAN hear what you are thinking: the current situation is evidently far worse, but haven't we reached the bottom? After all, the big banks reported healthy profits for the first quarter of this year. Even financial compensations of our financiers are edging up. Things cannot be that bad. Certainly, certainly, but I am sure you have noticed that all the banks that reported a profit have been recipients of TARP funds (taxpayer money) thanks to the Treasury's largesse and some of them even got more taxpayer money funneled through AIG's back door (see my Blips #83). These so-called "profits" are nothing more than the transfer of the people's money to our masters of the universe. Furthermore, you must have noted that the Fed has once more delayed the stress test results of the 19 largest US banks. At least six banks are reported to have failed the test and are in need of new capital (e.g., Citigroup, Bank of America, etc.).
THANKFULLY, other events of great import took the full attention of the punditry: The "torture memos," a senator bailing out of the Republican Party and jumping on the Democratic ship, the nosedive of the Republican brand, the first 100 days of the Obama administration, the retirement of a Supreme Court Justice, the Chrysler bankruptcy, and, of course, the spread of the influenza A-H1N1 virus (aka, the "swine flu") -- enough stories to avoid delving on the economic front.
THE TORTURE MEMOS story had some legs, with the usual set of characters going at each other's throats. The memoranda should not have been released, claimed one side. Their release will harm our national security and will help the terrorists, Yes, they should, for the "techniques" were already known to the public, claimed the other side. But we no longer do it. It was not torture. Yes, it was. Should we call the techniques "harsh" or "brutal"? Did they work? Did they help foil terrorist attacks? Yes, yes! No, no! Don't forget the ticking time-bomb scenario and the mushroom cloud, reminded the advocates of the techniques that are not torture because the lawyers said so. Let's create a Truth Commission, or better yet a special prosecutor, and see where the chips fall -- remember Nuremberg! We want the truth, the whole truth, nothing but the truth, shouted the opponents of torture and the proponents of retribution. No, please, no "retribution"; instead we have to move forward, intimated the president, hinting that he had more than his share of messes on his plate and did not welcome another fight. All in all, nothing that had not been argued and debated before.
WHAT WAS conspicuously missed in the kerfuffle was a survey of the American people. It would have been a worthy exercise, especially in light of the incident that occurred in New York when one of the two Air Force Ones used by the president with two F-16s in its tail flew at low altitude over the Hudson River and lower Manhattan for a photo op, thus creating panic among the frightened public, which believed a terror attack was under way. I'd bet a substantial majority of the respondents to such a survey would have been in favor of those "enhanced interrogation techniques," whether they were harsh or brutal and known in some quarters as torture. This would indeed be a dreaded moment of national reckoning when the true reality of the American character would be fully revealed to the world. If the country could only look in the mirror it would see a long history of physical abuses all the way back to the date of its creation. Not that Americans are worse than other nationalities -- they are not. They simply are no better and definitely not "exceptional." (Incidentally, the country did vote for Bush and Co. in 2004, and one has only to check the voting patterns of the past 8 years to realize that the administration's foreign policies and many domestic policies supposedly related to the Global War on Terror were supported by both parties.)
THE COUNTRY HAS become so obsessed with safety and security that paranoia has set in. People's fears, whether fueled on purpose by the Establishment or by the rumormongering and conspiracies that pullulate on and pollute the Internet, seem at an all-time high. Fear of losing one's home or one's job, fear of terror attacks (the barbarians-at-the-gate syndrome), fear of the End Times (Armageddon, 2012, etc.), civilization collapse, food scarcity, energy depletion, overpopulation, natural disasters, and on, and on. Gloom and doom are everywhere. The latest example that hit the U.S. and the world ten or so days ago is the potential influenza pandemic. It certainly did not help that the World Health Organization raised its alert to Phase 4, and a day or so later, Phase 5, or that foot-in-mouth VP Joe Biden quipped on national TV that, to paraphrase, one should not hop on an airplane or use the subway, and that pundits immediately began comparing the crisis to that of 1918 and later. A rumor that the first reported death in Mexico was linked to a pork farm in the state of Veracruz led consumers to stop buying pork meat, governments to ban the import of American pork products (the Mexican operation is a joint venture between Smithfield Foods, Inc., the world's largest producer, and Mexican interests), and in a more extreme case to the decision to destroy over 100,000 pigs (in Egypt).
A PANDEMIC, it should be noted, has nothing to do with the severity of the disease, but with the extent to which the disease spreads. It has spread indeed, to some 15 countries and counting, but the number of fatalities remains relatively low. As a reference, influenza kills about 36,000 people a year in the U.S. alone. Preparedness for a potential pandemic of severe proportion has taken place from many agencies, even though states' health financial resources are stranded. Professionals have reacted with prudence and concern, but also with caution. Alarms can quickly devolve into panic. In our paranoid era, however, rationality is thrown overboard. People want to run for the hills, armed to the hilt (the automatic weapons will surely save them from the virus!). Meanwhile, in times of economic duress, the pork industry, the airlines, the conference business (some European countries have advised their nationals not to travel to the U.S.), the exchanges of products and services are being hindered -- the number of casualties from the "swine flu" is relatively low. The incriminated pork farm in Mexico keeps operating and not one worker has been infected by the disease that supposedly originated there, and the disease cannot be transmitted by pork meat. The worldwide economy takes a further blow, while the paranoia does not subside but only grows exponentially.
BAD NEWS SELLS, especially those that are anxiety-laden -- and the media (and the bloggers) take full advantage of the phenomenon, all the while eschewing the more structural dilemmas that we face, both in the U.S. and in the world (though to this date Americans do not give a hoot about the world and the diplomacy it would require to deal with the complexities that confront us all). To wit, the U.S. spends about $1 trillion on its military, about 89 percent of all budgetary output related to addressing the "world." Next are the intelligence services with about 7 percent of outlays, and, finally the US State Department with just about 3.5 percent. The remaining half percent must be "aid," including financing Israel's war machine and takeover of the remaining of historic Palestine (including slow ethnic cleansing), and the financial support of the Egyptian dictatorial regime. With so much material to feed the paranoia why would one report on actualities? And as we all know real news pay rather poorly these days.
NOT ALL NEWS are negative, however, at least as far as Swans is concerned. First, we had a jolly surprise: The New York Times does deliver the paper to our home in the boonies -- or almost... Second, Art Shay, who takes an almost sadistic pleasure (my own sentiment) kicking my ass for being critical of poor little Israel (which infuriates his lovely wife), quixotically promoting Ralph Nader, the quixotic American by excellence, (I don't any more, Art -- learnt my lesson...), and all this Frenchie does that is not up to par with the likes of Frank Rich and the gradualists in the corridors of power, sent us some extraordinary mementos, all signed and dedicated by the best of the best photographers in the USA. Third, and finally, we found out that a lawyer on the East Coast (Sergei Lemberg, Esq.) pleasantly rated Jan's travails with GM and her Chevy Aveo as being naïve and wrong-headed. Much to learn, much to integrate, dear lawyer... We do appreciate your deep knowledge, Mr. Lemberg, with the caveat that you inserted assertions but did not document them. Let's go through the three happenstances.
BELIEVE IT OR NOT, The New York Times does deliver to these far-fetched territories. Being tired of driving 3.5 miles to the local store and getting a hit-and-miss result every Sunday, Jan Baughman sent the following e-mail to the circulation manager of the Times:
Dear Sir/Madam,
I'm writing to you with the hope that you can help me to get the Sunday New York Times in my home. Between my husband and me we have subscribed for over three decades, whether in New York, where he lived during the 1980s, or in Menlo Park, CA, where we lived from the early 1990s to 2004. In 2004 we moved to a small rural town -- Boonville, CA, about 115 miles north of San Francisco in the Anderson Valley. It's a beautiful place, but unfortunately we've not found a reliable way to get the Sunday Times.
There is a small market called "Lemons" in the town of Philo 3 miles west of our home that receives 10 to 15 copies of the Sunday paper, and they reserve one for us (along with other locals who request it) every week. The problem is, getting the paper is hit and miss -- one week they are delivered; the next week they are not. The papers (when they arrive) are left on the doorstep early in the morning. The market doesn't open until 9 a.m., so we drive down there around 7:30, slide an envelope containing a $5 bill under the door, and take our reserved paper -- it's all done on trust -- but again, it's hit and miss if the paper will be there.
It is our understanding that the New York Times arrives in Ukiah (about 25 miles away), and a delivery person from Ukiah distributes both the Times and the San Francisco Chronicle (a paper of no interest) throughout the region. On those occasions that the Times does not arrive, the Chronicle is still delivered, so I do not know where and why the Times falls through the cracks when the Chronicle doesn't.
This said, I have two questions: Is there a way to have the Sunday Times delivered to our home at xxxxx Highway 128, Boonville, CA, 95415? We'll be glad to pay for a reasonable fee for delivery. If not, can you find a way to ensure that the papers are delivered to Lemons Market in Philo (8651 Highway 128, Philo, CA, 95466-9458)?
Many thanks for your consideration and understanding. I wish the best for the future of the Times' print edition. It is disheartening to witness the decline of the newspaper industry -- more so when would-be paying customers are prevented from receiving it because the delivery does not happen. I realize that we and other New York Times readers in Anderson Valley are small change in the big picture, but I hope that you can help us find a way to consistently receive the Sunday Times. We relish the shared experience of our Sunday mornings spent reading the Times from page to page and the magazine from front to back. Every Sunday that we drive to Philo and the paper is not there ensures that the day is off to a bad start. Reading it on-line will never, ever match the experience of having the paper in hand. We would like to find a way to get it in our hands and will pay any reasonable cost to make it happen.
If you need more information, please feel free to call me or my husband, Gilles d'Aymery, at (xxx) xxx-xxxx.
Sincerely,
Jan Baughman
THE FOLLOWING morning I received a call from Tanya, a friendly rep at The Times. She simply said: "Delivery is available to your place. Just call 1-800-698-4637 and place an order. If you encounter any problem, please call me at 1-xxx-xxx-xxxx, 8:00 to 4:00, and I shall make it happen." So, for the past three weeks we have gotten the Sunday paper at our home -- or almost to our home. Problem is the delivery person does not drive the half-mile distance on the dirt road to our place. He (or she) drops the paper at the entrance of the dirt road some time between 8:00 and 8:30 in the morning. Fine, we drive down the hill to get it. The trouble, however, is that this is America, where anything for free is up for grabs. So last Sunday, the paper was nowhere to be found until I walked to the house sitting next to the entrance to the dirt road. Sure enough, the renter had taken the paper in. It was there on the ground, he said. "I just wanted the yellow pages." The "yellow pages" in The New York Times -- excuse me?
ANYWAY, this is not a perfect setting, but hopefully it will work fine. Perhaps we'll get hold of the delivery person one of these Sundays and offer him an additional dollar to drive up the hill... Talking about money, it costs us $6.80 a week to get the Sunday paper, or $353.50 a year. That amount, substantial without any doubt, reminded me of another perspective I read on the Web site of the San Francisco Chronicle on April 27, 2009. It read: "Why would I pay for a dead-tree version of a newspaper when I can read the online version for free?" and was posted anonymously by some "LastAngryMan." Although I hope to expand in the future on my thoughts regarding this kind of mindset that is so prevalent on the Internet, I'd like to comment in short fashion herein.
FIRST OF ALL, that poster is an imbecile. It does not register with his mushy mind that were it not for the print edition, the Web edition would not exist. Secondly, he cannot even fathom that he is not getting the Web edition "free" since he has to pay for a) whatever device(s) he uses to hook to the Internet, and b) the Internet service(s) he subscribes to in order to get online. He may well use a computer at home and an iPhone on the road. An iPhone costs between $200 and $300, needs to be replaced or upgraded every year or two, and the average monthly cost charged by ATT is $85. I don't know "LastAngryMan's" modus operandi, but I do know mine. I have to keep replacing computers and software. Then I pay $80 a month for satellite and land-line services (and that does not include the monthly cost of the phone line). You need not a calculator to find out that reading The New York Times online "free of charge" is a costly and ever-increasing financial proposition (and it does not help the paper of record one bit). When will people wake up to the fact that what is "free" to them -- which it is not -- is fully paid by content providers? When???? (Again, I hope to revisit this issue in the near future -- a fundamental topic for someone who has invested so much time, attention, work, and money over the years to publish Swans on a biweekly basis, filled with original, properly edited and fact-checked content, and yet cannot even cover the operating costs of the endeavor, not to say make a living, pay for health care, etc.). Why would one pay for something that one can get for free and steal at one's heart's content? Argh! I hope the bigger fishes will finally get to their senses and go after all the "LastAngryMen" of this despicable culture. Perhaps, then, the small fishes will have a tiny chance to perdure.
THE SECOND GOOD NEWS came through a wonderful gift from Art Shay. Three months ago, Art sent us an original picture of his famous 1952 shot of a naked Simone de Beauvoir, with a personal dedication. We framed it and it now hangs on the left wall next to my working computing beast. Last Friday, Art sent us a series of his books, each of them dedicated and annotated. As Jan wrote in a short thank you note: Your antic third eye captures images that speak volumes, and tell a new story with each viewing. . . . . Gilles is researching (and desperately lamenting) the death of print journalism, which I presume will take photojournalism along with it. Making your work all the more precious. Merci beaucoup!"
YES, INDEED, Art: Thank you so very much.
FINALLY, a short amusing tidbit that Jan found on the Web that comes from Sergei Lemberg, Esq., a lawyer who "focuses his practice on Lemon Law, Consumer Fraud, Auto Warranty and Auto Injury litigation" and "is licensed to practice in New York, Massachusetts, and Connecticut." Mr. Lemberg had this to say about Jan's travails with her lemon Chevy Aveo:
The Trials and Tribulations of a Lemon Car Owner
Posted by Sergei Lemberg, Esq. on April 29th, 2009
If you've ever had a lemon vehicle (or have one now), you should read Jan Baughman's "Roger, My Chevy, and Me."
Jan's account of her trials and tribulations in trying to get her 2007 Chevy Aveo fixed are by turns amusing and heart-wrenching -- the latter because her experience is all too common.
Ultimately, Jan decided to take the manufacturer's offer to trade in her lemon -- but not before shelling out a lot of hard-earned money. She paid $3,553 for the new 2009 Aveo, plus $678.57 to fix a scratch on her lemon Aveo.
Jan decided to represent herself, rather than use "one of the myriad shyster attorneys that specialize in these matters." (Her words.) While she's to be admired for her willingness to take on GM, it's likely that her decision not to consult a lemon law attorney cost her about $4,000. Reputable lemon law lawyers don't charge the consumer, and their fees are paid by the manufacturer in successful lemon law claims.
Hers is an account worth reading, both because of its compelling narrative and because, to those in the know, it is a cautionary tale about how you can think you won yet still get taken for a ride.
(Source: lemonjustice.com/blog/)
I HOPE Mr. Lemberg won't mind my quoting his words in full and won't sue me for copyright infringement, but what I found interesting in his friendly post was the operative words. "[lawyers'] fees are paid by the manufacturer in successful lemon law claims." (Emphasis mine.) Yes, possibly, but what happens if the claim is unsuccessful, Mr. Lemberg? Do we now have another fight on our hands?
THE FACT OF THE MATTER is that Jan had driven the lemon car for almost two years and 29,000 miles. She had used the car and taken advantage of the services it rendered her. So, we found the deal with GM rather fair, though the process was tedious. We paid for usage. GM certainly took a financial hit with this transaction. Both Jan and I felt the deal was just, though we were not too happy about having to fix a scratch for $678.57. Still, that was a small fee to end the process. Thinking of it, $3,500 for a brand new car was not a raw deal. Of course, in America, everybody is entitled to his or her own opinion, but we stand by our approach. We were not out to punish GM, and neither Jan nor I would ever consider suing someone or a corporation for emotional distress, though emotional distress was a part of the process leading to what we deem has been an honest resolution (so long as the new car is not another lemon!).
AS JAN KEEPS telling me when we get into a fight: "Gilles, life is too short to get ourselves embroiled into nothingness." That's the approach she took with the driving conundrum. Life is indeed too short.
. . . . .
C'est la vie...
And so it goes...
La vie, friends, is a cheap commodity, but worth maintaining when one can.
Supporting the life line won't hurt you much, but it'll make a heck of a
difference for Swans.