Baseball91's Weblog

November 9, 2008

On the Disconnect

Filed under: Election 2008,St. Paul,wine — baseball91 @ 12:54 AM
Tags: ,


Beer drinkers would never spend more than $1 a bottle to drink a beer at home.  I would not.  And I was on the way to buy beer, after I took a shower.  From the prices at the wine store down the street, wine drinkers never seemed to have the same worry about containing cost. 


“This American Life” was on the radio as I took a shower.  A story of a perfect family, perfect kids, a mother wearing her best jewels at the swimming pool until…. This was a story told by a daughter of a lawyer who had made all the wrong choices.  Until she turned 12 and was ready to star in a pivotal role in the school play.  The night before, her dad confessed to the family of having embezzled the money of a client.  She was advised to stay home from school the day of his announcement.  The story was expected to be big news around town.  The narrator was angry that because of the rule if she missed school, she would not be able to perform in extra curricula activities that day and, hence, the school play.  Her agony with her father was the timing of the announcement.  Her father had made all the wrong choices, and this time after getting a letter from his eldest daughter away at school that she wanted to be like him and become a lawyer, he made another choice.   His choice was to announce his wrong doing and he was ready to take the consequences.  From that point on, his presence at home seemed happier.  But he was disbarred, became a paralegal, and much wealth seemed lost. 


As I took a shower, I heard a story of loans to bailout the auto industry.  It was never mentioned that we had moved into times where people could not afford new cars.  Period.  Whether environmentally friendly or not.  The theme this week was one of change.  It was not just a new resident in the White House.  A new way of life, like for the daughter of the lawyer, was coming. 


Elections were about government.  And elections were about honesty.  America had this week seemed to put an end to bad choices and the failure to honestly face the consequences.  Those consequences were why there were falling valuations.  And they were lost, if not gone forever.  No matter how hard one government might try, governments around the world could not bring back the losses.  Governments around the world worried about deflation and their own inability to cope in deflationary times.  Inflation sustained the taxing power of government.  Because you could not tax a sale, an income, a property when there were no sales, when incomes fell, and when property values fell.  It was not the new president fault. 


There was an effect when you lost $1 trillion in valuation in real estate. Or $2 trillion when you included the falling valuations on Wall Street.  The one lesson of this election year should be that the dynamics of honesty in markets, in election booths, which should not be contested with bailouts.  Those dynamics of honesty will always remain in play for the foreseeable future until the excess unwinds and debt is destroyed.   As Todd Harrision has written, “Popular perception is that credit has thawed and while many symptoms have, the underlying disease continues to lurk. The smarter folks in the space remain wary and worried that further selling and redemptions are inevitable.”  The disconnect between credit and equity remains problematic.


The Bush Administration was ending its work.  For me his legacy was one of making bad choices and failing to communicate with anyone in either the Senate or the House.  That was why no one missed him in St. Paul at the RNC.  It was not just about making bad choices as it was his insular nature.   This afternoon I had read a series of letters to the Wall Street Journal written by people who did not recognize the bad choices made.  These might be folks a lot like Senator Reid and Congressman Pelosi who could not see that new cars were not going to be in the future like they have been in the past.  Public policy has been used of late to build palatial stadiums with higher ticket prices so ballplayers could keep collecting their average salaries in excess of $2 million.   The future seems more like the era after the Roaring Twenties, of prohibition, when few will be able to pay the prices to sustain a franchise in such stadiums.  The first deck of cards has fallen in September.  The fallout has just begun.   I had never understood that Prohibition might have involved the cost of drinking booze as much as the ill effects of drinking.  Until now. 


There was an effect when you lost $1 trillion.  Or $2 trillion.  Severe recessions affected both wine and beer drinkers who eventually could not afford the cost.  So why not just legislatively make it all prohibited?  It was all about bad choices.  And their costs. 


On “This American Life,” that lawyer was a hero who was ready to take the consequences for the cost of his wrong-doing.  


I was starting to write some lyrics to that old song from Richie Valens, “Oh Donna!”  The words of course began Oh Bama.


I heard a guy, Obama was his name….

When he’s elected, it’ll never be the same.

’cause I love my neuro
Obama, where can you be? Where can you be?


1 Comment »

  1. Comment by baseball91 — December 14, 2014 @ 4:24 PM | Reply

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