Of Ponzi Schemes, Social Security, & State Budgets – What’s The Dif? And, Illinois in Trouble

We now see a stream of terribly sad stories about the gullible and greedy taken in by the latest Ponzi scheme (Madoff), perhaps the biggest private one of all time not counting that which the Detroit “automakers” are still running to support their retirees. My thoughts invariably turn to the government –run, perfectly legal kind. Lots of things we don’t condone in private affairs, like Ponzi schemes and gambling, seem perfectly acceptable when run by government.


Social Security is, of course, the greatest Ponzi scheme of all. There are already many people receiving money for every one of us still putting in, and as the receivers increase in number, so must the contributions from that one worker stuck with the tab. Soon we will reach the point of failure when the whole artifice collapses – either the few, relatively speaking, remaining workers will revolt and refuse to bear the burden for which they did not bargain, or the money will run out. With most voters anesthetized to high taxes by the alluring though illusory security and comforts of the overreaching liberal mommy state, my bet is on the latter.

State and local governments also run big Ponzi-like schemes – their own retiree benefit obligations. Workers retire after 25-30 years and receive a pension for life of perhaps 80% of their most recent wage. This was acceptable to our elected officials, and to us by extension, when towns and states were growing in population, year after year. But the music stops, as it has for some places already, when the new money flowing in is exceeded by the money flowing out. We’re about to see what this looks like in a lot more places.

Steve Malanga, senior editor at the Manhattan Institute's City Journal, recently wrote (November 18; link) in the Wall Street Journal about the extent of the problem for states. Basically, states overspend relative to revenues, don’t put aside enough money for future obligations, and meet obligations incurred long ago and now come due not with saved money but with current revenues. The most significant such issue for states, writes Malanga,

…is their failure to deal with huge and growing employee pension and benefits liabilities…. For years, state and local politicians have bought support from public sector unions by promising big benefits. Over time these promises exert severe pressure on their budgets. A study three years ago by the Employee Benefit Research Institute estimated that the average public sector worker earns 46% more in total compensation than his counterpart in the private sector, largely because government employers spend 60% more per worker on benefits than counterparts in the private sector…. States have collectively racked up some $731 billion in unfunded liabilities for pensions and other retirement benefits, according to a study published last December by the Pew Charitable Trusts' Center on the States. In particular, the states have been promising their employees rich nonpension benefits -- such as retirement health and dental care -- and paying for virtually none of it. According to Pew estimates, states have put aside a mere $11 billion to fund $381 billion in future nonpension benefits.

Illinois is not faring so well, as states go. Here’s Malanga:

Illinois has attempted to deal with a nearly $2 billion budget deficit in part by slowing down payment of its bills (its backlog of unpaid invoices was recently $1.8 billion) and hoping tax collections would revive. Instead, they are declining and the state's budget gap is widening…. Illinois, which has the largest percentage of unfunded pension liabilities among the states, actually cut its contributions to pension funds by $2.3 billion in the flush years of 2006 and 2007 as stock market returns were rising.

How about that. In recent years, the State of Illinois has actually reduced the amount it sets aside for its future obligations. Well, the Blagojevich affair has Illinois legislators somewhat distracted at the moment. When that show is over, their attentions will return to the state’s financial crisis. With Democrats in control of the legislature and governor’s office, we’re likely to see significant tax increases and little to no spending cuts, which will only aggravate the budget problem in the long term, since we can’t tax ourselves into prosperity.


John M Greco

Bush Has Pardoned or Commuted Sentences of 36 Drug Dealers (& Lots of Thieves), But Won't Pardon Anti-Drug U.S. Border Patrol Agents

I have commented in two previous posts (here and here) on George W. Bush’s failure thus far to pardon U.S. Border patrol Agents Ramos and Compean, now serving 10 and 11 year sentences for shooting in the buttock a fleeing Mexican drug smuggler they had intercepted just inside the U.S. border. These men were prosecuted by a man Bush himself appointed as U.S. Attorney, in a case many think has been political from the outset – the Bush Administration serving to warn against serious enforcement of our Mexican border.

On December 23, Bush announced more pardons (and in his bumbling way revoked one the very next day). Bob Unruh writes at World Net Daily (link):

President Bush today added a convicted methamphetamine dealer, a cocaine distributor and two marijuana suppliers to the list of drug operators he's pardoned while in office, bringing his total of drug suppliers who have been pardoned or had their sentences commuted to 36. He's also pardoned more than a dozen thieves, seven embezzlers, an arsonist, several mail thieves, a man who violated the Neutrality Act and eight Thanksgiving turkeys, but there's been no clemency for U.S. Border Patrol agents Ignacio Ramos and Jose Compean, who were convicted of shooting at a fleeing drug smuggler.

Andy Ramirez of Friends of the Border Patrol, who long has been involved in the Ramos-Compean case, said the questions just start piling up. "First and foremost is the question that has to be asked, 'Why is the president dug in so deep' on Ramos and Compean?" Ramirez said. "Look at how many members of Congress have sent him letters, and have held hearings…. You really have got to start to wonder … does this doper lead to somebody really big?" he said.

Here’s Unruth on Johnny Sutton, the Bush minion from earlier days in Texas whom Bush later appointed federal prosecutor, who searched for and found the drug smuggler in Mexico and brought him to the U. S. to testify with the promise of immunity:

U.S. Attorney Johnny Sutton's office gave the smuggler, Osbaldo Aldrete-Davila, full immunity from prosecution for agreeing to serve as the government's star witness and testify against the border agents…. While Aldrete-Davila was waiting to testify against the agents, he also was involved in another drug smuggling case, but that information was withheld from jurors in the Ramos-Compean trial. Eventually, the smuggler was sentenced for the second case, but his sentence was considerably shorter than that of the agents who tried to halt his activities in the earlier episode.

More from Unruth:

Joe Loya, the father-in-law of Ramos, said he, his daughter and grandchildren were "devastated" by word that Ramos and Compean had been denied clemency on the latest list of presidential actions. "We were praying for a miracle. We just don't understand where the connection is when drug smugglers are getting pardons and commuted sentences, yet two agents who are not criminals, who were just doing their jobs, are in isolation," he told WND by telephone as he traveled to visit his son-in-law in jail on Christmas Eve.

George W. Bush, self-proclaimed “Compassionate Conservative,” has been very compassionate toward drug dealers and thieves.

Unruth has a link in his article to an online petition urging Bush to free these two men. Diana West also comments in a post at her web site titled “The Pardoner.” (link).

John M Greco

Fox News Online Joins the Liberal Media in Bashing Republicans Palin & McCain Via "Memorable Quotes" of 2008

On Christmas Day, Fox News' web site featured a big teaser-ad-like promotion titled “They Said It”, with pictures of Obama, Palin, Jeramiah Wright, and John McCain, and a link to an article. The unsigned article itself was titled: “2008: The Political Year in Quotes. FOXNews.com runs down the most memorable lines of the 2008 political year.” (link)

But, as it turns out, Fox News lied in the teaser. The quote they "use" for Palin isn’t hers at all – it’s Tina Fey’s Palin-mocking line delivered on the comedy show Saturday Night Live: “I can see Russia from my house”.

In the text supporting its choice of the quote, Fox News justifies its misrepresentation:

[Quote by] Tina Fey. Okay, so Fey was embellishing for comic purpose. The actual quote delivered by Alaska Gov. Sarah Palin to ABC News in September was: "You can actually see Russia from land here in Alaska, from an island in Alaska." But the "Saturday Night Live" impersonator distilled the essence of Palin's remark -- a bizarre statement on foreign policy experience -- for a politically attuned audience that had begun to question the Republican vice presidential candidate's qualifications for higher office.

The Fox article includes quotes from four politicans who ran this past election cycle: Obama, Clinton, McCain, and Palin. The quotes selected from Democrats Obama and Clinton were positive ones and the Fox narratives about them were very complimentary. Fox even included among the memorable quotes a very positive one from Ted Kennedy: "Together we have known success and seen setbacks, victory and defeat. But we have never lost our belief that we are all called to a better country and a newer world. And I pledge to you that I will be there next January."

However, for Republicans, Fox News changes its tune. They ridicule Palin using a quote from someone else and call her own statement "bizarre" (an opinion with which I disagree). And here’s the entry on John McCain, which even includes a rebuttal from Obama (while no rebuttal quotes from Republicans were present in Fox's fawning over the quotes from Democrats):

"The fundamentals of our economy are strong.” -- John McCain heard the end of this one on Election Day. The Republican presidential nominee made the rose-colored remark at a rally in Florida on Sept. 15, as Lehman Brothers was filing for bankruptcy and the stock market continued to tumble. Barack Obama and his Democratic supporters seized on the comment as a sign that McCain just didn't understand the mess he would inherit should he win the presidency. "What economy are you talking about?" Obama asked in response. McCain later clarified that he was talking about the American worker.

Could anyone possible think that the above stuff wasn’t written by liberal Democrats? It’s the typical liberal media bias – celebrating Democrats and smearing Republicans, couched so often as it is in ostensibly “balanced” or non-idelological articles. The cowards who wrote this didn’t even have the decency, as they set out to smear Sarah Palin, to find words she actually said. If Fox News wants to criticize Palin or McCain -- fine, just be out front and honest about it.

Fox News may indeed have some marquee commentators who hold conservative views, but despite its reputation as a "conservative" enterprise, as with the Wall Streeet Journal, when you look under the surface (or off the editorial page) there are plenty of liberals planting their digs and insinuations.

Meanwhile, the Media Research Center has its own "best quotes" of 2008 compilation (link); I haven't reviewed them all yet, but I'll bet they're all actual quotes.

Update 12/29/08: Tina Fey selected as "Entertainer of the Year" for trashing Palin on the liberal Saturday Night Live TV show (Gateway Pundit post here). However good Fey's impersonations were, at least the award-givers, unlike Fox News online, knew that Fey and Palin are two different people.

John M Greco

And It Was Always Said of Him, That He Knew How to Keep Christmas Well

He became as good a friend, … and as good a man, as the good old city knew, or any other good old city, town, or borough, in the good old world. Some people laughed to see the alteration in him, but he let them laugh and little heeded them; for he was wise enough to know that nothing ever happened on this globe, for good, at which some people did not have their fill of laughter in the outset…. His own heart laughed; and that was quite enough for him…. And it was always said of him, that he knew how to keep Christmas well, if any man alive possessed the knowledge. May that be truly said of us….




Charles Dickens, A Christmas Carol
From my well-bound cloth 1965 Harper Perennial Classic Edition

Richard R Balsamo

Bush Pardons Many, But To His Continuing Shame, Not the Border Patrol Agents

The Associated Press reports today (link) that rudderless President Bush has granted 19 pardons. Not included, unfortunately, are United States Border Patrol Agents Ignacio Ramos and Alonso Compean, who are serving 11 and 12 year sentences, respectively, for shooting a drug-smuggling suspect in the buttocks in February, 2005. They made the mistake of trying to protect our borders against a drug smuggler during the presidency of an “open borders” advocate, and were made a lesson of. The case is a travesty, a huge and horrible moral stain on George W. Bush, his former Attorney General Alberto Gonzales, and the man he appointed as the federal prosecutor for the region, one Johnny Sutton.

I wrote about this case 20 days ago (link) in a post titled “George W. Bush & His Political Persecution of the Border Patrol Agents – He Can Lessen His Disgrace with a Pardon Now.” I said then:

George W. Bush can make a small but morally-significant step in softening what will be the cold, harsh stare of history on his presidency by pardoning the two Border Patrol agents persecuted by his administration in what can be seen as a political gesture to the Mexican government, which does not want enforcement of our immigration laws. The case is difficult to understand otherwise.

United States Border Patrol agents Ignacio Ramos and Alonso Compean are serving 11 and 12 year sentences, respectively, for shooting a drug-smuggling suspect in the buttocks in February, 2005. They were convicted, as I read, of assault with a dangerous weapon, discharge of a firearm in relation to a crime of violence, obstruction of justice (for allegedly lying about the incident in an attempt to cover it up), and a violation of the 14th Amendment right to be free from illegal seizure….

The drug smuggler’s mother, an excellent judge of the political gestalt in general and of George W. Bush in particular, then had the temerity to complain about the incident to the United States government, which proceeded to spend time and money tracking him down in Mexico and granting him immunity for his testimony against the agents. The Bush Administration, including the now-controversial prosecutor who brought the charges, one Johnny Sutton, U.S. Attorney for West Texas… chose to believe the drug smuggler, as did the jury, against the word of the two agents. Defenders of this travesty, who also believe O.J. was innocent because the jury said so, say this jury spoke and would not have convicted if the charges weren’t true….

Contrast Bush’s aggressive activity in this case with others – say, for example, those cases of anti-Bush federal employees who in recent years have deliberately and repeatedly violated the law in leaking important state intelligence secrets to newspapers in order to compromise our anti-terror national security. These leaks have put every American at greater risk. Has Bush prosecuted even one of them, or even made an effort to publicly expose them? No, for to do so would incur more wrath from Democrats, who hate him already. Prosecuting two law enforcement officers who were intercepting a drug smuggler was cowardly; perhaps Bush sought the encomiums of the Mexican government and a respite from Democrats.

I am very much reminded here of the defining line from the movie Night of the Generals, the story of an officer with a conscience in the WWII German military police who is doggedly pursuing the murderer of a single person, a murderer known to be a German general. The officer is asked why this politically-risky case is so important, since thousands are being killed every day in the war. I write this from long memory: the officer replies saying that what can seem acceptable on the large scale is often barbaric on the small.

This too will be George W. Bush’s moral legacy.

Wikipedia has articles that outline the basics of this case, and contain useful links: on Ramos (here) and Compean (here).

Here is the disgraceful US Attorney Johnny Sutton

John M Greco

Do We Need More TARP, Or Should We Bailout from the Bailout?

All of the first part ("tranche") of the $700 billion Troubled Asset Relief Program (TARP) has now been allocated, although not all spent. The last $17 billion or so has just been allocated for GM and Chrysler, notwithstanding the fact that they are not financial firms, the originally intended recipients of TARP money. Given the shifting uses for the money and the expanding range of recipients, the TARP really does seem like a giant go-anywhere do-anything slush fund at one man's discretion. It was set up this way in the midst of a panic, which, however, has now passed, so there hardly seems a reason to continue in this way. For any further "bailouts", Congress should go on record with debate and vote tallys and let them allocate money to specific entities for specific purposes if the votes are there.

Going forward, the Democrats want TARP money used, presumably among other things, to prevent foreclosures, while most Republicans are regrouping on how to cure bailout madness and mitigate whatever long term economic harm we've already bargained for.

Here's coverage from the December 20th Wall Street Journal (link):

The U.S. government's rescue of the auto industry drained what remained in the first half of Treasury's $700 billion bailout fund, prompting Treasury Secretary Henry Paulson to call on Congress to release the rest of the money…. Mr. Paulson has not decided whether to formally request the second half of the Troubled Asset Relief Program -- known as TARP -- or leave that task to the Obama administration….

House Financial Services Committee Chairman Barney Frank (D., Mass.) has previously said Mr. Paulson's ability to get that next $350 billion has "been destroyed" unless he agreed on a foreclosure plan that carried Mr. Obama's blessing…. Democratic lawmakers are angry the Bush administration resisted calls to embark on a large-scale program to prevent foreclosures, and that government-backed banks aren't lending more…. Democrats want the rescue to include some version of a foreclosure-mitigation plan floated by FDIC Chairman Sheila Bair. Her plan is aimed at getting lenders to modify roughly two million mortgages, with the government sharing some of the losses if borrowers default on the new loans. Mr. Paulson argued the plan was too costly and could encourage banks to foreclose and borrowers to stop making payments to qualify.

Republicans, meanwhile, are upset about the shifting focus of TARP, a program they finally supported after a protracted fight that rocked financial markets. While Mr. Paulson initially planned to use the TARP to buy bad loans and other distressed assets, he changed gears to instead buy stakes in banks. Republicans blame the Bush administration's missteps for losing party seats in November….When Mr. Paulson met with House Republicans at a closed-door meeting in September to win support for the billion bailout package, lawmakers said his message was confused and muddled.

What to me is disturbingly missing from all I have read about the TARP and the uses to which the money has been put is the absence of specific metrics, or target indicators, to enable us to determine if the money is having the intended effect. What is the purpose of the money -- is it to increase liquidity, or to ensure solvency, or prop up housing prices, or perhaps to stabilize the stock market? Of course, this uncertainty about purpose is the first problem. Then, how do we know if "it" is working? Do we track the spread between the LIBOR rate and treasuries, or rather how much money is being loaned by banks? Or perhaps housing sales, or maybe the Dow and S&P 500 indexes? In part, the absence of target metrics is a sign of lack of consensus about the specific goals of the program and operational inexperience about how to achieve them.

Meanwhile, there's a distressing new report from the liberal Associated Press analyzing what banks that received TARP money have been spending on bonuses and perks (link):

Banks that are getting taxpayer bailouts awarded their top executives nearly$1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals. The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found. The total amount given to nearly 600 executives would cover bailout costs for many of the116 banks that have so far accepted tax dollars to boost their bottom lines.

So where will it end, this slippery bailout slope we're tumbling down? Who knows, but wherever we land, we'll be none the better for the trip. Mark Steyn wrote on December 16 at "The Corner" weblog at National Review online:

So who are the victims? Us - if we don't find a way to bailout from the bailout. Both the bank bailout and the auto bailout are responses not to the failures of the market but to the failures of attempts to rig the market, whether through government prevention of normal risk evaluation in bank loans or through the Big Three/UAW agreements that assumed a God-given hammerlock on market share for all eternity. We should oppose the bailout for the same reasons we oppose lifelong welfarism, for the most basic of conservative principles: If you reward bad behavior, you get more of it.

John M Greco

Bush Goes Wobbly -- Bails Out the United Auto Workers

Democrat Congressional leaders played a game of chicken with Republican Bush and Bush blinked. They wouldn't/couldn't pass a bill themselves to throw money at the failing automakers (really the United Auto Workers union), but intimidated the dazed and rudderless Bush into doing it. If it doesn't work out, it's his fault; if it does, they were always in favor of it, for, after all, helping unions is always Democrat policy.

Bush decided to give GM and Chrysler bailout money rather than see them enter forced restructuring. The money is coming from the Troubled Asset Relief Program, enacted specifically to bailout financial firms, not industrial companies. But honesty and perhaps even legality are trifling issues when Something Important Must Be Done.

Frank James writes (link) at the Chicago Tribune's Swamp weblog:

President Bush has decided to bailout the Detroit Three automakers [Ford may say no thanks]with a $17.4 billion rescue package of bridge loans to give the struggling automakers more breathing room to restructure and to avoid a collapse that some had warned could come early next year if they received no help. In doing so, the president rejected the idea that had been discussed in recent days of a so-called structured bankruptcy for the auto industry, at least for now.... But the president made it clear that the bridge loans were coming with tough terms. He said the automakers needed to submit workable plans for restructuring by March 31 and that if they didn't the federal government would require its loans to be repaid immediately. In addition, he said his administration expected all the auto industry players -- management, creditors, dealers, workers and bondholders -- to make significant concessions in order to make the rescue work.

It's the old "but you must return with a plan" routine. The old "just this once" bit. He "expects" the autoworkers' union to make significant concessions.

James continues:

Bush was also attempting to lead his party away from what he saw as a political abyss. The White House, including Vice President Cheney, had argued to Senate Republicans, that the party risked being branded again as President Herbert Hoover's party if Senate Republicans didn't approve a rescue plan. Hoover, a Republican, has been blamed for decades, for not acting aggressively enough to keep the Great Depression from worsening.

But Senate Republicans, by rejecting the recent Democrat Congressional bailout attempt (link), were trying to save the companies by forcing them into a needed restructuring. Bush has now given them money hoping that all parties will voluntarily make the necessary concessions. Bush will be long gone when the foolishness of this latest gambit comes due.

Think the autoworkers are interested in concessions? Here's James again:

One of the first congressional responses to the president's action came from [Democrat] Rep. John Dingell of Michigan who welcomed the assistance but not the president's call for more sacrifice from auto workers: "I have strong concerns about some of the conditions that were placed on these loans.... [i]t is irresponsible during a time of economic crisis for the White House to insist that workers take further wage cuts on top of the historic concessions they have already made."

Bush apparently doesn't conceive of the possibility that by doing something, he may actually do harm. He seems to believe that when faced with a big, big problem, throwing money at it must help and can never do more harm than good. He undoubtedly believes that the Great Depression was Great because Hoover and Roosevelt didn't mess with the economy enough, rather than too much.

Larry Kudlow, undoubtedly reflecting what many Americans feel, strongly criticized Bush's "loan" on CNBC (link):

"[I]f anybody reads this goofy document, the absolute essential issues in this -- the wages, the compensation, the work rules, the debt restructuring -- are non-binding targets," Kudlow said. "[N]on-binding targets - that is a total outrage for the American taxpayer, and ... we're going to be shoveling taxpayer money for years and years because there is nothing in here that is specific, and tough, and enforceable.... It's not just the car companies that got what they wanted, which is to say money - it's the UAW that got what it wanted," Kudlow said. "[T]he UAW opposed Republican Sen. Corker's plan because he had tough clear binding conditions. It was essentially a government-sponsored Chapter 11 bankruptcy. This [Bush document] is just a bunch of words on a piece of paper that has no meaning. And the worst part of the story is taxpayers are going to be left on the hook. We are going to own General Motors for years to come.... [F]rom the taxpayers' standpoint, from the possibility of serious structural reform where their hands are tied, from... having an adult monitoring this - some kind of car czar or bankruptcy judge - this Bush deal strikes out.... And I regret to say this to Mr. Bush and Mr. Paulson, you blew it because you didn't protect the taxpayers and you're not protecting the long-run health, either, of the American car business, which needs this radical restructuring, or the American economy."

So what has Bush bailed out? In his mind a couple of auto companies, but many of us know better. As I have written (link), the American auto companies "are now private social-welfare-plus-executive-stock-plan cooperatives, which finance themselves through the financing of increasingly uncompetitive motor vehicles that they manufacture at a loss. And these social welfare cooperatives have finally run out of money and now want American taxpayers to subsidize them." Well now we have.

John M Greco

Blagojevich & Emanuel -- Will the Dots Connect to Obama?

The Rahm Emanuel watch continues. Chicago Sun-Times columnist Michael Sneed reports that she "hears rumbles President-elect Barack Obama's chief of staff, Rahm Emanuel, is reportedly on 21 different taped conversations by the feds -- dealing with his boss' vacant Senate seat!" (link).

This could get messy. Thomas Lifson at American Thinker writes (link):

Hugh Hewitt, talk show host and law school professor, points out (link) that Rod Balgojevich will get access to the entire wiretap records of [federal prosecutor] Patrick Fitzgerald as soon as he is indicted. And, unless Rahm Emanuel is also indicted, or unless Balgo elects to share those tapes, Rahmbo will have no such access to what was said.

Considering the way Scooter Libby's memory lapse about what was said in his conversations re: Valerie Plame, and Fitzgerald's eagerness and ability to obtain a conviction for perjury based on a false recollection, this has got to give pause to Emanuel. No wonder he is unwilling to speak publicly about anything related to the case. 2009 promises to be an interesting year for designated White House Chief of Staff.

However, there are other views. Lifson's piece evoked this comment from "Ricardo," who obviously has a suspicious mind:

You really think Rahm does not already have copies of the tape-recorded conversations? I would strongly speculate that Fitzgerald, who apparently pulled the plug on the investigation to protect Obama and assure that he, Fitzgerald, retains his job after January 20, has seen to it that the tapes or transcripts have been "leaked" to Emmanuel. Fitzgerald already provided Obama and Emmanuel with cover by requesting that they not release the results of their internal investigation until when, Christmas Eve or Christmas Day?

So where's Rahm? When the story of his possible involvement broke, I suggested he would begin secretive comings and goings -- "[e]xpect Rahm to come and go via the rear-door rumba, a quick-step shuffle in and out of the back door that Chicago pols know so well." (link). Or should I have said the rear-door "rahmba"?

Gateway Pundit has placed Rahm's picture on a milk carton with the tag "have you seen me?" (link)

Jennifer Rubin writes at Contentions weblog at Commentary Magazine (link):

President-elect Obama is fond of reminding us that he is a tough customer, having learned politics in Chicago. But what he learned was to bob and weave, live among the crooks without either challenging the status quo or practicing the worst tactics of his Democratic colleagues. But that strategy of purposeful ignorance and avoidance simply won’t work any longer. The President of the United States can’t turn a blind eye to corruption in his own party. He risks losing his own moral authority, his Congressional majority, the ability to pursue his agenda and ultimately his chances for re-election. This was acutely displayed in the handling of Blago-gate, when his chief of staff was not only aware of “what was happening” (as the President-elect vaguely offered), but apparently spent a good deal of time with Blago and/or his advisors chatting about the vacant seat. Clever answers and feigned ignorance isn’t likely to hold up, even with a largely compliant media. It works in Chicago to converse with crooks and claim innocence, but not when you occupy the White House. People begin to wonder why you are operating with the ethically impaired….

Mark Steyn had this to say to Sean Hannity on Fox's H&C the other night (December 16), when asked about Obama's first statement that he was certain no one from his team had any contact with Balgojevich about his open Senate seat, which Obama later changed to "let me gather the facts":

[Obama] was verging on the OJ 'I'm looking for the real killers' routine.... What is the dog that isn't barking here? [a reference to Conan Doyle's Sherlock Holmes story Silver Blaze] He doesn't express outrage that his Senate seat is being sold to the highest bidder by this political colleague of his. It's very mysterious to me.... Any minute now Obama will be saying 'this guy [Emanuel] is just a chief-of-staff in my neighborhood.'

John M Greco

Blagojevich Will Fight On, & More to Come About Obama, Rahm, the Tribune, and Fitzgerald

Illinois Governor Rod Blagojevich, under federal corruption charges, will not go quietly into that good night. Instead, yesterday he vowed to fight, fight, fight. From the Chicago Tribune (link):

His political career in tatters and Illinois government in limbo, a defiant and unapologetic Gov. Rod Blagojevich said Friday he is innocent of the federal corruption charges leveled against him, will fight to clear his name and won't resign."I am here to tell you right off the bat that I am not guilty of any criminal wrongdoing," Blagojevich said. "I intend to stay on the job, and I will fight this thing every step of the way. I will fight. I will fight. I will fight until I take my last breath. I have done nothing wrong.".... Speaking under extraordinary circumstances, the governor delivered a response that was vintage Blagojevich: a bombastic attack on his political enemies, including a famous quote. He portrayed himself as a "lonely" victim of "powerful forces" and "political enemies" seeking to dislodge him from his post while he had the most important ally of all—the truth.... Blagojevich vowed to answer the allegations "in a court of law, and when I do, I am absolutely certain that I will be vindicated." Blagojevich also used his appearance to recite portions of Rudyard Kipling's poem, "If," something he has done frequently to reporters in the past when facing intense criticism.

Law professor William A. Jacobson has been following and commenting (very well) on developments at his excellent weblog Legal Insurrection, and has this to say (link): "I have been an advocate for Bagojevich doing just what he is doing, making the government prove its case promptly and in public. If Blagojevich is guilty, the facts should be laid bare for all the world to see as soon as possible; if Blagojevich is innocent, then he deserves quick public vindication." However, Jacobson, an appreciator of Winston Churchill (as am I), finds Balgojevich's allusion to the great man "unforgivable".

Michelle Malkin is following this story (link). Some of her readers have inquiring minds and want to know more. "Feebiebabe" wonders about the role played by Obama and the Chicago Tribune:

"Chicago Trib has always been in the tank for Obama. Rahm et al start contacting Blago about the Senate seat and suggest a name. Trib finds out that Blago is being wiretapped (as per investigation that has been going on for how long, Obama?). Jarrett withdraws her name and is given place in Obama’s administration. Obama stops talking about his replacement all of a sudden. Did the Trib tip off Obama?

And reader "txvet2" has thoughts about federal prosecutor Fitzgerald, who has some history (link):

Since no deal was actually struck or consummated, it would seem to me that they’re going to have a hard time convicting him of anything serious. Fitz packed it in way early, given that he continued to pursue the Bush Administration for two years after he knew who had leaked Valerie Plame’s name, and didn’t quit until he had managed to create a process crime for Libby. Not so much the bulldog when it comes to sticking it to a Democrat. Think maybe he’s trying to hold onto his job in the new administration?

Did Fitzgerald get cold feet when his longstanding investigation of Blagojevich start to ensnare Obama through Emanuel, leading him to quickly pull the trigger on a criminal complaint before things went any further? Perhaps one day we'll find out.

As for Blagojevich hanging on to his office -- Democrats usually don't resign in scandals (see Clinton, William; Jefferson, "Freezer"; Frank, Barney) -- that's more of a Republican thing. All this makes for great political theater, and we can only sit back and enjoy while it plays out. In time, we'll learn more about the roles in this played by Obama, Emanuel, and the Chicago Tribune. And, undoubtedly, about Fitzgerald's as well.

Veteran observer of the Illinois political scene Russ Stewart has more here.

John M Greco

Chicago Newspapers Fight for Air – Struggle for Control at the Sun-Times, and the Tribune Dumbs Down

A big fight for control is going on at the Sun Times Media Group, whose principal asset is the Chicago Sun-Times newspaper. I recently wrote (link) about how the Sun-Times has decided to alienate 50% of its potential readership by becoming increasingly ultra-liberal not only in its opinion but also in its slanting of “straight” news stories, a move that could only speed up its demise.

But hope springs eternal. A few weeks ago, Davidson Kempner Capital Management, one of the company’s largest shareholders, began an effort to replace almost the entire board of directors in an attempt to revitalize the company and avoid collapse. It must get holders of more than 50% of shares to support this move.

Yesterday the company’s third largest shareholder K Capital announced its support of this effort, stating that it “is shocked that the board would fight this proposal given the disastrous operating results and shareholder losses over the last few years due to the board’s inaction.” Ann Saphir at Crain’s Chicago Business online reports (link):

Sun-Times Media is losing money despite cutting $50 million in expenses this year, and its shares trade for less than a dime apiece. K Capital’s vote to install a new board at Sun-Times brings publicly declared support for the initiative to 27% of outstanding shares…. The company … said the attempt to oust the board would do no more than delay plans that are underway to bring the company back to profitability.

The current board’s plan is apparently to gradually disappear. Ann Saphir posts another report (link) today at Crain’s:

Sun-Times Media Group said its ongoing cost-cutting efforts will reduce it to a "fraction” of its current size. The company, which runs 70 community papers in addition to its flagship Chicago daily, plans to eliminate “several” unprofitable titles next year…. The reduction is part of a previously announced plan to trim $50 million in expenses. Sun-Times Media cut 534 employees, or almost 20% of its workforce, in the past 12 months. It also eliminated 16 titles. The current plan for an additional $50 million in cuts will go further, the company said [today].

As to the fight for control of the board, Saphir reports that yesterday shareholder Davidson Kempner stated that “[t]he directors who have presided over the deterioration of [the] Sun-Times do not possess the skills or experience to rescue this business.”

Meanwhile at the Chicago Tribune, part of its own revival plan is to make the newspaper more appealing to people who don’t read newspapers. Joseph Epstein posted a review (link) of the recently redesigned Tribune in the Wall Street Journal on December 13, titled “Another Newspaper Bet Goes Bad.” He doesn’t like what he sees:

Struggling to make changes that will attract the young and other readers with short attention spans has everywhere failed to bring salubrious results. In the case of the Chicago Tribune all that has been accomplished is to make the paper -- with more color photography, shorter stories, more features, less hard news -- seem more like USA Today, of which the world does not need more than one. This has brought greater discontent among loyal Tribune readers and done little to bring in new readers. I am not a regular reader of the Tribune, but when I do pick up a copy these days it feels like nothing so much as holding the local evening television news in my hand, and that's not a happy feeling.

As for the current value of the shares of these two companies – well, for the Tribune Co., now in bankruptcy, the value is zero, as it has no shares, and for the Sun-Times Media Group (SUTM), shares last traded at a whopping 5 cents, a 16% drop from the 6 cents at which shares were trading when I last posted on this topic 19 days ago.

John M Greco

Iconic Motorola's Slow Slide, Unabated

More ominous news today from Motorola, the once-great Chicago electronics company. The Chicago Tribune reports that “[f]inancially stressed Motorola disclosed plans to cut costs by cutting the pay of its co-CEOs and freezing its U.S. pension plans and ending its practice of matching employees' 401(k) contributions. The company didn't spell out how much money it expects to save from what it characterized as "difficult but necessary steps." (link).

Co-CEOs! Yes, the residue of an earlier plan to have a CEO firmly in place of a part of the company intended to be spun-off. But the spin off was torpedoed by this year’s market turmoil. So now at perhaps the most perilous time in the history of a company that has suffered from weak and erratic management, it has co-CEOs.

Long a leading innovator in electronics, Motorola has been on a long slide, temporarily interrupted a while back by the now-passed fleeting success of its Razr cellphone. It has been hard to witness this -- the slow decline of yet another storied Chicago technology company. Zenith is already gone, its name living on as a slap-on brand for a few items manufactured by Korean giant LG.

In the end, cases like this usually come down to management failure, played out over many years. I always wonder what the directors on the board think, year after year, as they witness the decline. They approve plans that fail, one after another. Executives come and go. Competitors pass it by. And the board goes on.

I recall hearing in the last year or two one particular trader say on CNBC, on a couple of different occasions, that he thought Motorola has been and continues to be one of the worst managed technology companies in the US.

Here's a comment posted by “flyersmith” to coverage of this latest Motorola story by suburban Chicago’s Daily Herald (link), whose northwest suburban market area is home to Motorola and most of its headquarters employees; its terse derision barely hides the anger that so many must feel:

Another Chicago bellwether company being run into the ground. They had the world at their fingertips with the explosion of the wireless world in 1988-92 era. Their business decisions, not invented here attitude, empire building culture, and promotion by seniority policies of the past two decades have these guys at death's door as an independent company.

Somebody is going to buy them up, keep the trademarks, and brands and a few key employees...and then gut the rest. The history of the last quarter century of Motorola will be well known in MBA schools about what not to do.

Richard Balsamo

As Prosecutor Fitzgerald Pursues Blagojevich, Who Watches Fitzgerald?

Patrick Fitzgerald is, of course, the federal prosecutor in Chicago who has brought charges against Illinois Governor Rod Blagojevich. But as much as we are glad to see corruption rooted out from wherever it hides, let us be mindful of the propriety of Fitzgerald’s behavior, past and present.

Fitzgerald was the special prosecutor who secured a conviction last year of Vice President Cheney’s chief of staff Scooter Libby in the notorious Plame affair. Many people believe he acted atrociously and unethically in that case.

In an effort to politically damage the Bush administration, Democrats ginned up a fake controversy charging that VP Cheney and/or Bush’s key advisor Karl Rove “blew the cover” of a covert CIA agent for their own political purposes related to the Iraq war. For the Democrats, it was opportunity to hit at Bush – a political trick of high theater. Democrats and their media arm pressured the bumbling Bush administration, rarely able to defend itself competently, into appointing a special prosecutor, and it picked Patrick Fitzgerald, the New Yorker who earlier had been appointed by Bush as federal prosecutor in Chicago, particularly upon the recommendation of “maverick” one-term Republican Illinois Senator Peter Fitzgerald (no relation that anybody knows of). Bush did not know to watch out for mavericks.

Fitzgerald was tasked with pursuing the leak to the press of CIA employee Valerie Plame, which would have been illegal if she was a covert agent as supposed. Fitzgerald soon determined three key facts: that Plame was not covert (if an “agent” at all); that the leak to hurt Bush came from a rival center of power in the Bush administration – Colin Powell and his subordinate Richard Armitage at the State Department; and that there was no crime. Nevertheless, he wanted to bag a big fish and went after Cheney and Rove, and two years and millions of dollars later wound up indicting only one person -- Cheney’s chief of staff Scooter Libby for, as the Wall Street Journal put it, “contradictions between his testimony and the testimony of two or three reporters about what he [Libby] told them, when he told them, and what words he used.” All of this had nothing to do with the leak of Plame’s name, the whole point of Fitzgerald’s investigation, which Fitzgerald knew wasn’t a crime and was committed by someone else. The Libby prosecution was a sideshow to a political witch hunt that had failed.

If Fitzgerald indicted anyone, why not Armitage, the actual leaker of Plame’s name? Answer – because “leaking” her name was not a crime, and furthermore, he and Powell were in favor with the liberal media because of their falling out with Bush. So Fitzgerald stayed away from Powell and Armitage and pursued those who the anti-Bush media wanted pursued – Rove and Cheney; and when it became clear he couldn’t get them on anything, he finally settled for Libby.

Investor’s Business Daily in an editorial of August 29, 2006, said: [I]t’s hard to see anything but politics as the motivation for Fitzgerald’s handling of the Plame affair…. Fitzgerald knew in the early days of his politicized witch hunt that no crime was committed… From top to bottom, this has been one of the most disgraceful abuses of prosecutorial power in this country’s history.” James Taranto wrote in the Wall Street Journal on September 5, 2006: “It seems that Fitzgerald and the State Department covered up a non-crime, and the effect was to keep alive the illusion that it was a crime…. the whole thing stinks.” Jed Babbin wrote on September 18, 2006, at The American Spectator: “It is an entirely separate scandal – one probably including real criminal conduct – that the Fitzgerald investigation was even begun despite knowledge that no crime had been committed. Libby’s crime, if there was one, was manufactured by Fitzgerald in the grand jury room.”

Fitzgerald’s behavior as a prosecutor is again in question in the Blagojevich case. Yesterday’s Opinion Journal at the Wall Street Journal online (link) carried a commentary by former federal prosecutor Victoria Toensing titled “Fitzgerald Should Keep His Opinions to Himself -- As in the Libby case, his behavior is 'appalling'." In it , she wrote:

Illinois Gov. Rod Blagojevich's "conduct would make Lincoln roll over in his grave," according to U.S. Attorney Patrick Fitzgerald. But [it’s] Mr. Fitzgerald's statement [that] would…. In the Dec. 9 press conference regarding the federal corruption charges against Gov. Blagojevich and his chief of staff, Mr. Fitzgerald violated the ethical requirement of the Justice Department guidelines that prior to trial a "prosecutor shall refrain from making extrajudicial comments that pose a serious and imminent threat of heightening public condemnation of the accused." The prosecutor is permitted to "inform the public of the nature and extent" of the charges… But he is not permitted to make the kind of inflammatory statements Mr. Fitzgerald made during his media appearance…. Throughout the press conference about Gov. Blagojevich, Mr. Fitzgerald talked beyond the four corners of the complaint. He repeatedly characterized the conduct as "appalling." He opined that the governor "has taken us to a new low," while going on a "political corruption crime spree."

Toensing wrote that “although I am a Republican, I am first an officer of the court. Thus, I take no joy in a prosecutor pursuing a Democratic politician by violating his ethical responsibility. I fear for the integrity of the criminal justice system when a prosecutor breaks the rules.”

Déjà vu. In Chicago even the federal prosecutor needs watching.

John M Greco

Blagojevich Watch: Rahm Starts the Rear-Door Rumba; Althouse on the AG’s Brief; Illinois Republicans Gear Up; & Strolling Down Memory Lane with Royko

I heard some chatter on local talk radio here in Chicago that Rahm Emanuel, Obama’s chief-of-staff, has complained about the intense media pressure about conversations he may have had with Gov. Blagojevich about Obama’s senate seat, and that he might not show up for work at Obama’s headquarters. Republicans might say, welcome to our world, dealing with a hostile press. Expect Rahm to come and go via the rear-door rumba, a quick-step shuffle in and out of the back door that Chicago pols know so well. Gateway Pundit has more on this (here).

Law Professor Ann Althouse returns to this story having read Illinois Attorney General Lisa Madigan’s brief to the Illinois Supreme Court asking it to remove Blagojevich by judicial fiat. She finds that “[t]he legal argument in the brief is embarrassingly inadequate.” (link)

Meanwhile, Illinois Republicans gear up a publicity campaign calling for Obama’s seat to be filled via a special election rather than by gubernatorial appointment. Out in front are Illinois Republican Party chair Andy McKenna and Republican DuPage County (Chicago western suburbs) State's Attorney Joe Birkett, who adds the anti-corruption, law enforcement touch. A video of a local TV news report on this that includes comments from both of them is up on the party’s web site (here).

And finally, to better understand the mindset of the locals on this latest dust-up, let us once again stroll down memory lane with Chicagoan Mike Royko, the late Pulitzer Prize-winning life-long observer of the local political scene. Here he is in the Chicago Sun-Times in 1978 writing about some long-forgotten political scandal, of the kind that seem to erupt every few weeks around here:

The federal indictment of 29 city electrical inspectors has so unnerved [Chicago] Mayor Michael Bilandic that he says he is going to send letters to businessmen telling them that they don’t have to pay bribes to city employees. This is probably one of the few cities in America in which a mayor would think people have to be officially informed that they aren’t required to pay bribes. But I expect the letter to accomplish nothing more than to touch off confusion. Upon receiving the letter, many Chicagoans will probably write him back and ask: “Dear Mayor: If I don’t give the bribe to the inspector, who gets it?”

Confusing indeed to us Chicagoans -- if we’re not supposed to give the bribe to the inspector, who do we give it to?

Chicago columnist Dennis Byrne writes that “Illinois Has Long Been For Sale” at his weblog The Barbershop (here).

UPDATE: There's an excellent, detailed commentary (link) on the weakness of AG Madigan's legal brief and motion papers to the Illinois Supreme Court by Cornell law professor William A. Jacobson at his weblog Legal Insurrection, titled "Illinois Attorney General Gets a Grade of "C-", in which he writes: "the papers are very, very weak. Embarrassingly weak."

John M Greco

Illinois Attorney General Wants State Supreme Court To Remove Governor -- A Surprisingly Bad Idea

I am surprised and somewhat disconcerted to learn that Illinois Attorney General Lisa Madigan (Dem), daughter of the long-time Speaker of the Illinois House Michael Madigan (Dem), both of Chicago, has asked the Illinois Supreme Court to remove democratically-elected Governor Rod Blagojevich (Dem) from office because of the recent federal complaint, notwithstanding the fact that there is a defined process for such removal -- impeachment and conviction by the elected state legislature -- that preserves the Governor's due process rights.

University of Wisconsin law professor Ann Althouse is also troubled, and has a commentary well worth reading at her blog (link). In short, she thinks that the constitutional language on which AG Madigan relies should be interpreted by the Court to preclude any action on its part in this circumstance -- in other words, any removal from office should be via impeachment and conviction rather than judicial fiat.

Here's Althouse:

In the Illinois case, ... [y]ou have a lower executive branch official, the Attorney General, bringing the accusation, and the state supreme court is asked to make the final call, deciding by fiat that a democratically elected Governor should be thrown out of office. Now, there is that state constitutional provision -- Article V, Section 6 -- but the question is how broadly to interpret "other disability," a term that appears on a list that includes "conviction on impeachment." Clearly, "other disability" ought to be defined narrowly so that it does not obliterate the safeguards of the impeachment process.

Althouse also cites a source that speculates that Speaker Madigan is moving slowly on impeachment, a process which is his to initiate in the Illinois House, to allow his daughter the Attorney General to get some favorable publicity, by looking tough on corruption, that will help her future political career.

A second reason I think is that Illinois Democrats are afraid of what Blagojevich might say about them in a public impeachment proceeding, making removal by judicial fiat the preferred approach, however tenuous constitutionally, and within the realm of possibility given that this, after all, involves the Illinois Supreme Court. Furthermore, there's the chance that Blagojevich will resign from office, avoiding the need for impeachment altogether. Judical removal or resignation could come much sooner than impeachment and conviction; the shortest course to removal is desired since the longer Illinois goes without a second senator the louder will be the calls for a special election, which the Democrats could well lose.

More on this at The Volokh Conspiracy (link), a group blog of law professors.

John M Greco

For the Detroit 3 Automakers, Bailout of Uncompetitive Union Wages Is Defeated – Long-Term Survival Requires Court-Ordered Restructuring

An effort by Congressional Democrats to throw money at the financially-struggling Detroit 3 automakers has been defeated by Senate Republicans. The sticking point was the refusal of the United Auto Workers to accept wage reductions that would put theirs on par with the competitive wages, as industrial companies go, paid by the foreign-owned automakers at their American plants. This development demonstrates that the Democrat bailout plan is really a “bailout” plan of the UAW’s uncompetitive wage level. As I wrote in an earlier post titled “No Bailout for Detroit Automakers If We Want Them to Survive” (here), the Detroit 3 companies “are now private social-welfare-plus-executive-stock-plan cooperatives, which finance themselves through the financing of increasingly uncompetitive motor vehicles that they manufacture at a loss. And now these social welfare cooperatives have run out of money and want American taxpayers to subsidize them.”

Jennifer Rubin at Contentions blog at Commentary Magazine online sums it up today (here):

It was, by any measure, a stunning defeat for the Democrats – and more so for their Big Labor ally, the UAW. The UAW is now revealed as unwilling to make concessions needed to save their own members’ jobs, even in the face of a looming recession. It is not a move likely to endear them to anyone, even those sympathetic to the notion that the government should “do something” to help save the Big Three. [Republican] Sen. Bob Corker had tried to forge a last minute deal which would have forced the Big Three to cut debt obligations and promptly align their labor costs with foreign-owned domestic manufacturers. In the words of a Republican aide: “Corker tried to get a deal, but the UAW didn’t want to budge on wages within the next year, and many Republicans remained skeptical of the whole bill.”

Much of the fear about the consequences of no “bailout” is based on a faulty premise. I have heard many interviews in recent weeks in which the questioner asks a bailout opponent something like this: “are you willing to accept the demise of these companies and all of the jobs related to them?” To me, the question is based on the false choice that it’s either the bailout or the total disappearance of these companies and their jobs, and is meant to reinforce the common misperception that bankruptcy means disappearance of the companies. For these companies, it doesn’t mean that at all since the type of bankruptcy that would occur is court-ordered restructuring.

I wish interviewees would immediately object to such “false-choice” questions, avoid the misleading “B” word altogether, and call for a "court-ordered restructuring." This process would allow the companies to continue their operations uninterrupted and give new, fresh management the power to forge new labor and dealership arrangements that would make them competitive going forward. It is refreshing and reassuring to see Congressional Republicans stick together to assert common sense.

UPDATE: University of Michigan economics professor Mark J. Perry at Carpe Diem (link) cites two references for estimates of the annual extra costs to GM and Ford due to the higher wages they pay compared to domestic workers at foreign-owned plants, and concludes: "Both estimates suggest that the current pay gap between UAW workers and non-union workers at the foreign transplants impose additional labor costs on GM and Ford in the billions of dollars per year. And that's without legacy costs."

John M Greco

On Blagojevich’s One Smart Move, Royko & Will on Chicago Politics, & Is Illinois Ready for Reform, Yet?

A great deal has already been said and written about the antics of Illinois Democrat Governor Rod Blagojevich, much of it laced with surprise and outrage. The behavior is outrageous indeed, but hardly surprising. Corruption is to Chicago and Illinois politics as mosquitoes are to summer.

From Chicago’s northwest side, Blagojevich’s major accomplishment in life has been to marry the daughter of the powerful Chicago alderman and Democratic ward committeeman Dick Mell. Father-in-law Mell was Blagojevich’s guide and patron, shepherding him into positions first as a state representative, then as a congressman, and then finally as governor. His first run for his current job, in 2002, was against popular state Attorney General Jim Ryan, who was unfairly associated in the minds of inattentive voters with the brewing scandal surrounding unpopular then-Governor George Ryan, who was no relation.

It is an anomaly that the last high-profile Illinois politician before this one to be charged with corruption was a Republican, for this game in Chicago and in Illinois has been primarily an intramural one among Democrats. In fact, speaking only of governors, four now of the last eight have been charged with corruption – three Democrats and the one Republican.

Blagojevich is a player in the Chicago league of hardball politics. George Will, who grew up in downstate Champaign, wrote in Newsweek in 1983: “Welcome to Chicago, where even the feast of St. Valentine is associated with bloodshed. Chicago politics, like Chicago baseball, is not for the squeamish.”

Legendary columnist Mike Royko, consummate Chicago guy and veteran observer of the political scene, wrote this in the Chicago Tribune in 1989:

Every time Chicago politicians go on trial for bribe-taking, I marvel at how stupid they are. Not because they were greedy and dishonest. Just as fish gotta swim, birds gotta fly, they gotta grab whatever goes by. Their stupidity is in getting caught. And that’s because they don’t know the difference between dumb graft and smart graft. This distinction separates the politicians who chow down in a prison hall from those who take two-hour lunches at Eli’s while favor-seekers pause at their table and kiss their rings. Dumb graft is… when you babble your gratitude for a wad of cash from someone who has a stereo system hidden in his underwear. Smart graft is money that flows to you because you are a political heavyweight [think here of another politician from Chicago’s north side, Hillary Clinton].

In many other cities and states [corrupt politicians] would be booted out of office. But in Chicago we have a more tolerant attitude. If they don’t get indicted, they’re okay.

So outrage, yes, surprise, no. This story is an old one, and the plot line hasn’t changed, yet. As legendary Chicago Democrat 43rd ward alderman and saloonkeeper Paddy Bauler said in 1955 after the young Richard J. Daley defeated the sitting “reform” mayor who had been cleaning up a scandal-ridden city hall, “Chicago ain’t ready for reform yet.” Still not yet.

Good coverage from a local perspective from Dennis Byrne at The Barbershop (here), Anne Leary at Backyard Conservative (here), Illinois Review (here), John Ruberry at Marathon Pundit (here), and from Bill Baar on the West Side (here). UPDATE: Feds seize Blagojevich's eBay account -- Iowahawk has the story (here).

John Michael Greco

Illinois Democrat Governor Charged With Corruption -- What Else Is New? Also -- Some Humor In It All

Illinois Democrat Governor Rod Blagojevich was arrested today on federal corruption charges. Coverge at the still-open-for-business Chicago Tribune here. Michele Malkin also has lots of coverage and opinion here, and she includes a link about this latest installment of the Name That Party Game. Local Illinois opinion at Illinois Review here, from Anne Leary at Backyard Conservative here, and from Dennis Byrne at The Barbershop here.

Jonah Goldberg, author of Liberal Fascism, sees the humor in this at The Corner blog at National Review online in a post titled The Blithesome Banality of Blago's Blunders (here):

... [T]here's something almost wholesome or nostalgic about Blogo's criminal misdeeds…. He's just a crook. A good, old-fashioned, crook. I know I'm supposed to be outraged, and in a certain sense I am. If he's guilty of all that's alleged, I hope they throw him in the stoney lonesome until the Chicago Cubs win the World Series or 2025, whichever comes second. But in another sense, this is just plain enjoyable. It's like when you watch "Cops" and the idiot burglar tries to hide beside a tree in the dark, even though he's wearing light-up sneakers. It's like when Dan Rather dares the world to prove he's a clueless ass-clown. It's just good stuff. There's no tragedy here. No wasted potential. No undeserving victims. No profound and complicated symbolic issues …. This is the sort of criminality we want the Feds to find, particularly in Chicago. Everyone gets what they deserve — at least so far — and all of the guilty parties are all the more deserving of punishment because they don't quite understand what the big deal is. I love it. More please.

And in the latest installment of another political parlor game, What Was He Thinking?, Blagojevich does seem to have been pretty arrogant in his conduct knowing full well that the Feds were on his trail.

Image from the Chicago Tribune

John Michael Greco

Tribune Company Files For Restructuring Bankruptcy, But the Unanswered Question Is How Can Its Newspapers Compete With Free News on the Internet

Today the Tribune Co. filed for restructuring bankruptcy. At the Chicago Tribune newspaper’s web site, Tribune reporters had this to say (here):

Chicago Tribune parent Tribune Co. filed for Chapter 11 bankruptcy protection today in Delaware so it can restructure its debt. The company said it has sufficient cash to continue to operate its media businesses, including publishing its newspapers and running its television stations and interactive properties, without interruption…. But the situation at Tribune Co., which has suffered from industry-wide declines in advertising revenue that have eroded its cash flow since the deal was done, is emblematic of the squeeze felt throughout the media business overall, and newspaper companies in particular.

The Chicago Tribune newspaper is the historical and perhaps psychological core of Tribune Co., which also owns other newspapers. To be sure, the recession has depressed newspaper advertising revenue, and the credit crisis has made it difficult for the Tribune Co. to handle its unusually high amount of debt. But these factors simply place the Tribune closer than most peers to the bleeding edge of the internet razor that is slicing through the newspaper industry. In the newspaper business, much of the advertising, the main source of revenue, is gone for good.

More and more people get their news and information from the web, and this trend will only accelerate. It is not clear how much value there will be for me, as an average customer, in the printed product. But the web site is a different matter. While I can easily get national and world news and information free on the web -- I don’t need the Tribune to supply me with that -- I need the Tribune for local news, which is hard to get elsewhere.

The Tribune needs to develop a compelling web news and information product that I’ll be willing to pay for; say, $30 a year. It would need to be focused on local news and commentary. The opinion must be balanced and fair, rather than predominately from the liberal point of view, and must not slant straight news stories. I recently posted a commentary titled “Sinking Liberal Newspapers Throw Readers Overboard, & the Chicago Sun-Times as a Case in Point” (here) about how the Chicago Sun-Times has responded to the newspaper crisis by becoming ultra-liberal not only in its opinion but in its reporting of straight news stories. Not very smart; I don’t need that.

It’s not clear that the Tribune understands that I really need it only for local coverage. For example, in yesterday’s print Sunday Tribune, about two-thirds of the front page of the sports section consisted of a giant picture of a college football player and an accompanying article. He plays for a Florida school. The stories of the college basketball games of Illinois, DePaul, and Notre Dame from the day before – all major teams with huge local followings – were somewhere inside, not as important to the editors as a story about a star player in Florida. I can read about star Florida players somewhere else for free.

The product people running the Chicago Tribune and the Chicago Sun-Times newspapers seem asleep at the wheel, at their best, or recklessly destructive, at their worst. They will not survive without a clear understanding that they need to provide news, information, and opinion that I cannot get elsewhere for free, in a balanced and fair way, at a price I’ll be willing to pay.

Additional local coverage and comments at Illinois Review (here) and Marathon Pundit (here). Also, see Hugh Hewitt (here); and see Michele Malkin's update (here) on the state of decline in the newspaper business. UPDATE: Tom Roeser weighs in (here), and John Hinderaker at PowerLine comments on the general state of the newspaper industry (here).

John Michael Greco

Bald Eagle Commemorative Coins

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The United States Mint 2008 Bald Eagle Commemorative Coins
Silver Dollar & $5 Gold Piece

Available through dealers, or from the U.S. Mint (here)

Walt Disney, An American Original -- Born Determined in Chicago On This Date in 1901

Today is the anniversary of the birth of Walt Disney, who died at the age of 65 in 1966. He has brought immeasurable joy, laughter, and precious memories to millions, and his work and genius continue, every day. He loved kids, he loved having fun, and he loved trains. Especially interesting to me is the story of his dogged determination to succeed, his undying faith in himself, and his triumph over repeated business setbacks.

Disney was born in Chicago in 1901. After moving away when he was about 5, his family returned some years later and he began high school on the city’s west side. He drew cartoons for the school newspaper and enrolled at the Art Institute at night. He dropped out before finishing and went off to the Western Front as an ambulance driver for the Red Cross.

After the war he settled in Kansas City and in a few years had a small cartoon business. Despite some innovative work, the business went bankrupt, his creditors eventually receiving 45 cents on the dollar. Disney then decided to seek his fortune in Los Angeles, where his older brother Roy and a retired uncle were living. Bob Thomas, in his terrific biography Walt Disney: An American Original, writes: “He left Kansas City in July [1923], wearing a checkered coat and un-matching pants. He had $40 in cash, and his imitation leather suitcase contained only a shirt, two undershorts, two pairs of socks and some drawing materials. But when he paid his fare for the trip to California, he bought a first-class ticket.”

He couldn’t find work at any of the Hollywood studios and had to borrow money from his brother to pay modest rent to his uncle. He had no options but to resume making cartoons on his own, using makeshift equipment in his uncle’s garage. But soon he secured a distributor and was back in business. Thomas describes how his brother Roy joined him in business and the two shared a single room in a rooming house, with a bathroom down the hall.

In the early years, his most successful creation was Oswald the Lucky Rabbit. In 1928 at the age of 27 Disney traveled to New York City with his wife to renegotiate the contract with his distributor. The meeting was a disaster. The distributor announced that he had surreptitiously acquired all of the property rights to the Oswald character and had hired away almost every one of Disney’s small number of cartoonists. Disney left town crestfallen, without his most valuable property and without almost his entire staff. But on the long train ride back to Los Angeles, undeterred, he bucked himself up and began sketching out a new character. He picked the name Mortimer, but his wife suggested Mickey, and so it was.

Years later, in middle age and with a successful studio in hand, he got around to another long-simmering idea. Here’s Thomas quoting Disney:

It all started when my daughters were very young, and I took them to amusement parks on Sunday. I sat on a bench eating peanuts and looking all around me. I said to myself, dammit, why can’t there be a better place to take your children, where you can have fun together? Well, it took me about fifteen years to develop the idea.

The Disney studio, with many investors, was not interested in financing a new risky line of business, so Disney had to secure financing for the park on his own. Thomas: “To [his wife’s] dismay, he began borrowing on his life insurance; before he finished, he was [personally] $100,000 in debt.” Because his brother feared Walt Disney company stockholders would object to Disney’s using his own name for his new separate company, he called it WED Enterprises, using his own initials.

Disneyland eventually opened in 1955. Here’s Thomas again:

Disney never seemed to tire of striding through the park and watching the people and their reaction to Disneyland. “Look at them!” he enthused to a companion. “Did you ever see so many happy people?” …. One day at twilight, a Disneyland engineer was strolling through Frontierland when he saw a solitary figure sitting on a bench. It was Walt Disney, savoring the sight of the Mark Twain pulling around the bend with a puff of white steam.

Richard Balsamo