Tonight's Special Broadcast from KSFO San Francisco. 
Speaking with members of my financial and political roundtables tonight re the grim week on
the stock market, off 5%, in the face of the President's prime time presser, the Tim Geithner speech of vagueness and the pushing through of a helter-skelter stimulus package with Democratic votes and the cooperation of three fragile Republicans, Susan Collins and Olympia Snowe of Maine and the elderly Arlen Specter of Pennsylvania (right the House and Senate conference earlier this week). The final vote for the conference bill in the House was very close to the original rejection by the GOP in January, 246-183. All 176 Republicans voted no to the pork, and this time 7 Blue Dogs joined them, making the bipartisan vote the "no" vote. On the Senate side, the vote is being held open for Sherrod Brown to fly back form his mother's funeral memorial in order to cast the deciding 61st vote. The stimulus bill is now entirely a Democratic contraptions. The markets and the polls show uniform doubt, worry, incredulity, annoyance, rejection, distrust, impatience. It was not a good week for the economy, and it was a worse week for the new administration, capped by the Judd Gregg abandoment of Commerce and the GOP rejection of the President's charm offensive. Then again, Nancy Pelosi was a clear winner.
What Passed For Good News.
The markets were in free fall all week; the Baddie Bankers of Fools (right)were casually insincere and condescending before Congress, so what passed for good news came at the close with a sober announcement that JP Morgan Chase and Citigroup will suspend foreclosures for an indefinite period. Am sure this cheers those folk up who are six months behind in their mortgages, can't find a place to rent, are trying to keep the children in school and their jobs in place, and now they learn they wont be out on March 1. Good news? More of this to follow, when it looks positive that it isn't worse.
Schedule for Friday 13 February KSFO.
600P Pacific Time: Jim McTague, Barron's re the Geithner speech and the market lack of respect for the $1 trillion stimulus bill. Stocks Unable
to Get Traction
611P: Charles Gasparino, CNBC, re the testimony of the eight CEOs of the big money center banks on Capitol Hill.
620P: Ken Silverstein, Harper's, re the strange jaunt of David Plouffe, Obama campaign manager, to Baku, Azerbaijan, to meet with the long-time strongman, son of the long-time strongman, Aliyev.
761P: Jed Babbin, Human Events, re the Geithner speech, the $1 trillion stimulus vote in the House.
642P: Major Garrett, Fox News, re the stimulus package.
651P: Stimulus surprise.
705: Geoffrey Fowler, Wall Street Journal, re the Berkeley Buddhist Temple and the Brunch Bunch.
715P: Harold Holzer, author, "In Lincoln's Hand," re a Smithsonian collection of Lincoln hand-written documents reproduced and annotated.
725: Joseph Sternberg, Asia Wall Street Journal, re the Koreans and their upset with the "Buy America" mandates in the stimulus bill.
734P: Bill Roggio, Long War Journal, re Afghanistan, the Shadow Army, and the martyr attack in Kabul.
745P: Henry Miller, Hoover Institution, re the stimulus bill and no stimulus for R&D, re the mysterious non transparency of China reporting on H5N1.
754P: Lou Ann Hammond, Carlist.com, re the Chrysler failure Valentine's Weekend
Note from Tom Donlon
Below a thoughtful, helpful note from Barron's Editorial Editor Tom Donlon re the question of the so-called Long Depression from the Panic of 1873 until perhaps as late as 1897. The newspaper editorialists were uniformly fretful about class rivalry, labor unrest, strikes, unionizing, mobs, violence and the Gilded Age indifference of the great fortunes. The politics of the period were dominated by the Republican Party ruling through Congress with an imperial confidence, even with the interruptions of the split terms of Buffalo big man Grover Cleveland.
You ought to reconsider the history of the period 1873 to 1897. It was a period of declining prices and increasing productivity never achieved before or since. Labor in the U.S. grew cheaper because of mass immigration, but everything else shrunk in price and expanded in availability to match the decline in wages. Energy grew cheaper because of mass coal-mining and cheap transportation, transportation grew cheaper because of cheap coal and technological improvement of steam engines and steel-making, steel grew cheaper because of cheap coking coal and cheap transportation, grain grew cheaper because of mass production, new farm machinery and cheap transportation, etc., etc. The great industrial fortunes were made in that period. Not just in America, but in England, Germany, France and Italy. It's also the period when compulsory education was introduced, which set the stage for the advances of the 20th century.
Regards,
*“And transform our economy for the 21st century”* B Obama
Ominous Words in Perilous Times? Or Pointing to the Future with a Vision of the Inevitable?
Having watched the music industry for years, it comes to mind the many mistakes of most all involved in long term planning and strategy even as unfamiliar dynamics overtook the business. While the faithful model disappeared and was supplanted by new technologies, the corporate heads of the record companies continued to tout the reliability, resilience, and dominance of overpriced marketable packages and discs in the same distribution model that had, in another day and time, served artists and corporations very well. Preoccupied executives, denying that the demand for music on CD’s had already ceased to exist, stumbled and fumbled with the old model trying to update it while Napster and file sharing became the consumer choice. Files were new, easy, cheap, and had a sense of rebellion. Of “stickin’ it to the man”. Had the majors reshuffled and driven the technology, instead of trying to catch up with the geniuses (who were probably just clowning around in some bedrooms working on a theme) they could have owned their own versions of IPods and ITunes stores . Now, Apple tells them how things will be and what price their things will sell for.
Of course, it’s much more complicated than this and many factors contributed to the fall. Household names now trading near junk bond status have a history of volumes not yet written.
Though the Keywords are: Talent, Foresight, Flexibility, and, of course, Leadership.
The question most heard now is: Will it (the stimulus package) work? It’s a question that by any stretch requires no more than a yes/no answer. Yet, countless hours of broadcast time are currently being allotted to answering it. It soon becomes obvious that nobody is really all that interested whether or not it will work; what we’re really discussing here is a horse race – Democrats vs. Republicans.
At first blush, we find ourselves in a familiar territory – like, when we were debating the ‘surge’ in the Iraq war. “Will it work?” we asked. Some answered yes; some, no. The answer given was invariably a projection of one's personal preference. Democrats said no, because they wanted the Iraq effort to fail. Republicans said yes, because they thought they would be better served by sticking with their standard bearer. In either case, what constitutes ‘success’ or ‘failure’ was never in doubt.
Today, success or failure re the stimulus package is wide open to debate. Some would say that if and when the economy regains its former footing, the effort will have been ‘successful’; others (with more radical tendencies) would claim that a resurgent economy would represent no (or not enough) ‘change’ from previous (failed) policies and goals.
‘Success’, therefore, can mean different things to different people. Unfortunately, we do not yet know where our new president comes down. At any point up to and including now (and possibly even into the future) he’s either making huge mistakes, or he’s doing exactly what he set out to do.
Mistakes are forgivable.
RE Tom Donlon:
Obama and congress are throwing money at "shovel ready" (their words) programs. None of these involve R&D or investments in education.
Most of the stimulus will go to social programs and physical infrastructure, for unions that supported the Dems. Day care centers and underwater basketweaving projects are wonderful, they do not contribute to the advancement of the economy and produce long term revenue generation.
Investment in Biotechnology, Internet, Energy, and medicine would be more productive.
Alas teachers and Social workers have much more power in the "New Washington"