Ravengate
Partners - Stock market, economic and political commentary by Patricia Chadwick

I woke up in Milwaukee this morning to see Maria Bartiromo on Morning Joe challenging Michael Moore on the subject of capitalism. Go Maria!!

I had to laugh out loud listening to Mr. Moore freaking out about the top 1% of the population owning 99% of the wealth in the country. It’s not that I support a vast skewing in the distribution of wealth in a capitalist society. Rather it was absurdity of the messenger who seemed oblivious to where he fit into the pyramid he decried. As no one else was in my room, I could only talk back to the television, “Well, count yourself in that group, Mr. Moore.”

Then Mr. Moore went on to compare the Dow Jones reaching 10,000 to the tragedy of the current 10% unemployment rate in the country. Maria challenged him, pointing out that the pension and 401K plans of millions of Americans have benefitted from the stock market over the years. He pooh-poohed her intelligent and totally correct response.

Next he lambasted the big banks, begging people to take all their money out of the big banks and to put it into the small, local banks in their communities. What he seemed to fail to understand was that the big banks are the ones that employ all the people at the bottom of the pyramid, so if people follow his absurd advice, the unemployment rate will rise, not fall.

Mr. Moore is a mogul in the entertainment industry. He is a successful capitalist who has benefitted from the deep pockets of capitalism. That is fine and it is a good example of how capitalism works and how it allows people to make big money.

Mr. Moore’s hypocrisy is in neglecting to tell his audiences that he himself is included in the class of people he deplores.

I was flummoxed, bowled over and plain stupefied as I read the article by Eric Dash and Jack Healy on the front page of the business section of the New York Times this past Saturday.   On the surface, the story simply defies belief.

Beleaguered Citigroup has been forced to execute a fire sale of its prize-winning entity, Phibro, because the Federal Government’s ‘pay czar’, Kenneth Feinberg, has ruled that the compensation contract with top level employees at Phibro “promoted excessive risk-taking and ran counter to the public interest”.  (A quote from the article.)

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Floyd Norris of the New York Times wrote a very interesting article in that newspaper this past Saturday. He pointed out that since the 1950s when the Government started keeping track of debt levels in this country, debt growth has never been as slow as it was in the second quarter of this year.

He went on to explain that the private sector debt actually fell, also a first in over half a century, while Federal Government debt soared, a fact we all know to be true.

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Reading Betsy McCaughey’s op-ed article in today’s Wall Street Journal, I understand fully why the elderly are so scared about the possibility of a nationalized health care system. I believe it is must reading for everyone. You can read it by going to www.wallstreetjournal.com and then clicking on OPINIONS. Please do so.

Dr. McCaughey knows a great deal about health care and has spent the last five years as the Chairman and CEO of RID, an organization which is dedicated to the prevention of hospital-acquired infections. As a point of clarification, her doctoral degree is not in medicine, but is a Ph. D. in constitutional history.

The advice that President Obama is receiving from his health adviser, Dr. Ezekiel Emanuel, is scary stuff. Given that Dr. Emanuel is the brother of the White House Chief of Staff, Rahm Emanuel, one can only assume that he is more than a figurehead. Importantly, Dr. McCaughey provides numerous quotes from Dr. Emanuel’s writings. If I were in my 70s (and I am not THAT far away), I would be bombarding my Senator and Congressman with emails and phone calls.

I hope that Dr. Emanuel provides a response to Dr. McCaughey’s piece. I for sure will read it.

Just two days ago, the New York Times heralded on its front page “Health Care Bill Passes First Test on Capital Hill”, a title that belied the fact that the health care bill as currently structured has almost no likelihood of becoming law. Moderate Democrat Senators have no stomach for it, because their constituencies have no stomach for it.

This morning’s Wall Street Journal’s front page headline signals the more likely path for the bill “Budget Blow for Health Plan”, a story that the New York Times has relegated to page 12 (page 3 of the National news section of the paper). When the Director of the Congressional Budget Office (CBO) contradicts the statements of Congressmen/women and Senators, trouble is brewing, and that is exactly what Douglas Elmendorf has done.

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With Governor Sanford in political Siberia and Governor Palin perhaps following him, Governor Mitt Romney should be smiling. Lots of things are going his way.

With the benefit of hindsight, had Candidate McCain chosen the Governor of Massachusetts and not the governor of Alaska as his running mate, the outcome of the election might have been different, but who knew in July of 2008 that in only three months, so much economic havoc would be wreaked.

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I went to the mall yesterday to try to gain a sense of whether consumers are buying and when we might see a recovery. The first thing I noticed was that the mall parking garage was nearly empty, but then I realized that yesterday was only the second day since Memorial Day when it had not been raining here in New England and so perhaps the lack of attendance might have had something to do with people’s need to ingest a bit of sunshine.

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The Obama Administration’s aggressive and seemingly frantic pressure to get a health care bill passed over the next few weeks (a virtual impossibility) brings back memories of sixteen years ago, in 1993 when the newly inaugurated Clinton Administration tried exactly the same thing. And it was that very aggressiveness on the part of (most particularly) Hilary Clinton that (thankfully) ultimately doomed the project. I predict the same thing will happen again in 2009.

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With Chrysler and General Motors in bankruptcy and under the ‘de facto’ if not ‘de jure’ management of the U.S. Government, the hue and cry emanating from the pundits and politicians and television journalists and on and on wails, “What is left of the American auto industry?”

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Lo and behold a couple of weeks ago, some of the channels on my TV stopped working. I realized it when I tried to watch MSNBC’s Morning Joe, a simply must have for me first thing in the morning – great guests, good politics and economics and lots of humor. Clicking around, I realized that I had also lost a lot of other channels and none of them did I think of as premium rate channels. They included A&E, Lifetime, Bravo, the History Channel, C-Span and some silly paid programming channels. I couldn’t make rhyme or reason of the selection, but one thing was certain – I am sure that those channels come with the basic coverage. The odd thing was that a couple of other televisions I have did not have any missing channels. But I’m not a big TV watcher, so I didn’t pay much attention to this difference in reception.

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