Author: growthrate

CNN is reporting that the US is detaining about 50 Cubans at Guantanamo Bay.  It seems these individuals have, at various times, attempted to migrate to the US, but US authorities intercepted them at sea.

Ordinarily, US authorities would simply have repatriated these individuals to Cuba, under the US’s sensitively-named “wet foot-dry foot” policy.  So what are they doing at Gitmo?

But after interviews aboard U.S. Coast Guard cutters it was determined that those migrants appeared to meet the standard of having a well-founded fear of persecution if repatriated and, therefore, were diverted to Guantanamo, the exile group [Democracy Movement] said.

The exile group said Cubans can be held at the base until the United States can find a third country that will take them.

Yup.  They’ve been sent to Gitmo to protect them from persecution.  

Your tax dollars at work.

Well, I don’t live in Chicago – haven’t been there in several years, actually, except to change planes at Ohare.  As a result, I haven’t been up on what looks like a stylish bit of guerrilla politics – Chicago’s ban on foie gras, due to take effect on August 22.

Now, I like good food, and I like foie gras (though Ms GR likes it more).  But producing the stuff (in the traditional way, anyway) requires a rather gruesome force-feeding of the geese whose then overstuffed livers become the delicacy.  While it surprised me to see it, it turns out that animal-rights advocates persuaded the Chicago city council to approve the ban.  Speaking entirely for myself, this is a sacrifice I’m willing to make for the greater good.

More on what I like about this story below the fold:

::
There’s a lot to like about this story.  Much of it rests on the assumption that the people most likely to find the foie gras ban inconvenient or offensive are the people least likely to be major participants here at the Frog Pond.  So indulge me, if you would, in the assumption that it’s the RedState crowd that’s most likely to object.

The first thing I like about this situation is that the Republicans’ populist base most likely couldn’t give a shit.  Objections to the ban have to sound in their ears like the whining of spoiled children.

So let’s take a look at the foodies’ objections:

“They’re going too far when they’re telling you what to eat, what not to eat,” said Mario Lara, a sales rep who bought a table at a foie gras fundraiser at Cyrano’s Bistrot & Wine Bar. “This is America.”

Sounding more like politicians talking about the Middle East than a piece of meat, enthusiasts voice their concern that foie gras won’t be the last tasty treat to make its way from menu to city ordinance.

Will veal be next? Lobster? And what about that fur coat in the closet?

“Now it becomes a political issue and it becomes a constitutional thing,” said Rick Tramonto, the chef and owner of Tru. “My biggest concern is where it will stop.”

This strikes me as a low-key opportunity.  After all, once the chorus reaches full volume, we can just turn it around:

“They’re going too far when they’re telling you what to say, what not to say,” said M—- L—-, a who bought a table at a free speech fundraiser at C——. “This is America.”

Will phone calls be next? Email? And what about that manuscript in the closet?

“Now it becomes a political issue and it becomes a constitutional thing,” said R—- T—–, the editor and owner of T—-. “My biggest concern is where it will stop.”

The message is simple.  If activists can organize on constitutional grounds to seek reversal of a ban on foie gras, for Chrissakes, how can you complain if I want to talk to whom I choose in peace?

Now comes the time to look back on the Lamont victory last night, and ahead to the irritation of needing to continue to deal with Joe “How Can I Miss You if you Won’t Go Away” Lieberman.  As I do, it occurs to me that Lieberman’s signal failure in the campaign was that he didn’t take the right play out of his own playbook.

Remember 2000, when Joe managed to keep his name on the ballot twice by standing both for VP and re-election to his Senate seat?  Remember how he could’ve given the Repubs immediate control of the Senate had he won both (since his Senate replacement would likely have been a Republican – not to mention the perils of giving Joe the casting vote as VP)?  
Well, Joe forgot his own playbook.  Maybe he thinks that his “independent” gambit is just as good, but it lacks elegance.  I insist that Joe should’ve gone for a sure-bet strategy for being a legitimate candidate in the general election.  It’s a strategy based on his experience running two races at the same time.  And it’s simple.  

Joe should’ve gone for the Republican nomination, too.

Personally, I would’ve liked it because the resulting meltdown would’ve been so much bigger.  But I can’t believe nobody from Fox suggested it.

I’m an immoderate consumer of crossword puzzles and word games.  I particularly like the cryptic puzzle in the Financial Times.  Cryptics make use of both straight definitions and wordplay.  Part of the game is to figure out which part of the clue is the definition, and which part the wordplay.  

Imagine my pleasure a few weeks ago in seeing a cryptic puzzle on the Sunday puzzle page in the New York Times.  Happily solving, I came to the last “Across” clue, which ran like this:

City paper monkeys write randomly (3,4,5)

How to solve such a clue?  Well, I guessed (correctly, this time) that randomly is a keyword indicating an anagram.  The numbers in parentheses say that the answer has three words — three, four, and five letters in length.  So I set about looking for an anagram for monkeys write, matching the definition City paper.  Astonishingly, the answer was New York Times.

So, in the same spirit, what follows is a story those monkeys might write about our current administration.  I hope it doesn’t cause you to fall into a drunken stupor, like the author of Remembrance of Things Past.  Anagrams are in bold italics

The NSA Scandal, or “Whose Bugger, Mr. President?”

It wasn’t a routine day at the White House.  After all, the indictments were beginning to fall thick and fast, and responding to the threat was taking up more and more senior staff time.  “Ziss is terrible,” one senior staffer was heard to complain.  “Ziss is almost like real vork!“

“Yeah,” said the President, “but at least we’ve managed to make some changes.  The old CIA boss made good progress to dismantle our intelligence apparatus, but we needed to replace him.  `Hail, Mad Cheney‘ is our new watchword.  If we don’t keep this situation under control, the Democrats will shut our domestic spying apparatus down.  It will be like, CIA: Pens Only, especially in the House.  And I sure hope our guy in the Big House — no, I mean the upper house (what’s it called?) — is right about the liberal’s tin forts.  They might turn out to be a lot stronger than they look.  But don’t forget, if things get too bad, at least we’ve manage to install old Joe Multi-Casualties over at the Supreme Court.  And if things get truly desperate, we can play our trump card, and trot out a lesbian nomad.  And,” the man the wingnuts somehow consider a legend muses, “Iraq has to turn up some good news eventually, doesn’t it?”

The Press Secretary spoke up.  “The papers are getting feisty, Mr. President.  Why, I saw a reporter actually writing out a telegram.  All it said was, Hating Snow.  Stop.  And speaking of Snow, what they’re saying about our new Treasury nominee is that we’re just looking to replay John’s run.  Don’t they know that a Wall Street executive has a different style of kowtowing from a steel guy?  They’ll be able to tell the difference, for sure.  And that soaring Muzak on the web isn’t getting any nicer to us, either.  Can’t we shut them down somehow?”

“Let’s turn to the next election,” said the political strategist.  “Look at Connecticut.  We go to all that trouble to convert one Senator to our jamboree line, and now a mental nod might be all it takes to dislodge him.  And 2008?  We thought the nth lyrical lion would be easy to beat, but there’s a draft movement getting started, and if it turns out to be real, go get help now!”

At this juncture, the President stopped the conversation.  “Friends, I know we have many worries, but as you know, I am a man of faith, and in difficult times I turn to prayer.  You are also all my most trusted advisors.  Only you — not even Laura — know the truth of my religious convictions.  So let us pray:  `O, thronging female typists that we worship, touch us with your payola-ended pong…'”

It’s Friday, so it figures to be time for another installment of my occasional (very occasional) series on figures of speech and other linguistic mischief.  Let me install my headphones – ah, there we are – and away we go…

During the first American effort to throw off the yoke of monarchy, Ben Franklin famously said,

We must all hang together, or we shall surely all hang separately.

Franklin’s utterance was a classic example of antanaclasis, a figure of speech using the same word in two different senses.  It’s a sort of pun, but much, much more.  It depends not on words of similar sounds, but on alternate meanings for the same word.  So follow me below the fold — it’s a little tight there, you’ll have to fold yourself up a bit to get there — for more.

Franklin apparently was fond of antanaclasis; he also once said to a political opponent,

Your argument is sound — all sound.

If you want to learn to use any figure of speech effectively, it helps to look at how the masters use it.  Effective antanaclasis doesn’t just depend on finding two different meanings for the same word; the meanings should be contrasting as well.  So if I say, “I called a man called Joe today,” that’s only interesting if you want to know what Joe and I said to each other.  But consider a more interesting example.  Suppose a progressive candidate says to a Republican opponent,

You say you’re called to public service, but on Booman Tribune they say you’re called a liar.

Now maybe we’re getting somewhere.

If there’s a good figure of speech, Shakespeare surely used it, and antanaclasis is no exception:

O, cursed be the hand that made these holes!
Cursed be the heart that had the heart to do it!
Cursed be the blood that let his blood from hence!
–Richard III, Act I, Scene ii, Lines 13-15

Sometimes antanaclasis, like its cousin, chiasmus, can be implied.  One old Wizard of Id cartoon has the Wizard telling the King, “Sire, the peasants are revolting!”  The King’s answer:  “You can say that again!”

I’ve occasionally caught myself thinking along similar lines when one of my kids is slow about doing something and says, “But Dad, I’m trying!”

Even Groucho Marx got in on the antanaclasis act.  He earned double points with:

Time flies like an arrow; fruit flies like a banana.

Because it’s so easy to create lame examples, antanaclasis is a particularly difficult game to play.  But if you know other examples, or can create them, please come join the fun.  And have a great weekend.

A couple of weeks ago I posted a Friday word game over at dKos.  The subject then was mondegreens, those songs where you hear the lyrics wrong for months and years at a time.  You know, like the refrain in Creedence’s “Bad Moon Rising,” “There’s a bathroom on the right.”  Well, we had a bit of fun over there, but I’m thinking this kind of splashing around is better suited to the friendly confines of the Frog Pond.  So here goes.

I stole today’s title, of course, from Kermit, patron saint of the Frog Pond.  (I’ve often said that plagiarism is the sincerest form of flattery.)  It’s also an example of chiasmus, the subject of today’s game.  Chiasmus is a type of play on words in which you repeat a phrase, reversing two words (or two phrases, or even two letters) the second time around, for impact or comic effect.  
It’s been a while since we’ve had a good specimen of chiasmus come up in public life, but Jamie Raskin, professor at American University and candidate for Maryland State Senate, gave us a spectacular example last week.  Asked by the incumbent, Nancy Jacobs, to comment on the Bible’s position on gay marriage, Mr. Raskin replied:

Senator, when you took your oath of office, you placed your hand on the Bible and swore to uphold the Constitution. You didn’t place your hand on the Constitution and swear to uphold the Bible.

You can read all about it here.

Mr. Raskin gives us a clean example of classic chiasmus. In classic chiasmus, the second phrase inverts something in the first. Our very own Damnit Janet uses a chiastic sig, quoting Jimi Hendrix: “When the power of love overcomes the love of power the world will know peace.”  The most familiar example may be from John Kennedy’s inaugural address:

And so, my fellow Americans,
ask not what your country can do for you;
ask what you can do for your country.

Kermit’s comment about flies is actually an example of “implied chiasmus,” where the reversal comes against a familiar, but unspoken, phrase.  JFK was good at implied chiasmus, too.  He once described Washington as a town of “northern charm and southern efficiency.”  

Winston Churchill was another great one for chiasmus.  He was also known for repartee, the quick response silencing another person.  One story has it that a young Member of Parliament once asked Churchill for advice on how “to put fire into my speech.”  Churchill replied,

What you should have done is to have put your speech into the fire.

Mr. Churchill said many things on policy, of course, but I’ll stick with one from economic policy:

In finance everything that is agreeable is unsound and everything that is sound is disagreeable.

Of course, Shakespeare was no slouch when it came to chiasmus, either.  So facile was the Bard with his wordplay that he could combine two forms, creating chiastic puns within dialogue, like this exchange from Henry IV, Part II:

Chief Justice:   Your means are very slender,
                     and your waste is great.

Falstaff:   I would it were otherwise. I would my means
              were greater and my waist slenderer.

And then, of course, there was Mark Twain, who once said of a book by Henry James, “Once you’ve put it down, you simply can’t pick it up.”

There are plenty of chiastic jokes, too, usually of the form, “What’s the difference between …”  I can’t think of any that aren’t offensive, though.  

So who’s your favorite?  Oscar Wilde?  Ben Franklin?  Your crazy uncle Harold?  Tell us who your favorite chiasticist (I made that word up) is, and give us an example or two — maybe one of those non-offensive chiastic jokes I can’t remember.

Really?  You have to go so soon?  When you get back, maybe I’ll ask you whether you’re drunk because the beer was green, or you’re green because the beer was drunk.  Enjoy!

Sometimes the best lessons are from ordinary life. Last night, as on many other evenings, I found myself called upon to give a dramatic reading of Dr. Seuss’s Green Eggs and Ham to my six-year-old daughter.  We sat, as we have many evenings before, cozily snuggling and enjoying the calculated silliness of Dr. Seuss’s verse — half nonsense, half sly reading primer.  As I read, I also thought of the many diaries that have appeared here in the past two weeks or so.  I’ve had many reactions to them, but the one it seemed most worth sharing, as best I can, is my reaction as a father of two young girls, ages eight and six.  The upwelling of emotion I felt, thinking of my daughter and her big sister, and the world whose dangers I hope they need to learn about only gradually, seemed worth writing down.
If you forced me to put a word to the feeling that came over me, I’d say I felt protective, but that isn’t exactly right.  Protective of their innocence?  In a way, yes.  These precious days of Dr. Seuss are few, and there’s regret enough in realizing that they will pass, and our girls will progress on to other things, many of which are a lot less charming.  But they must grow up, and they’ll eventually lose their childish innocence.  So what I want to protect is their childhood as a basis for strength and happiness in adulthood.  What wouldn’t I be willing to do if it would enable them to blossom in their own time into the type of women — well, the type of woman their mother is: intelligent, strong, balanced, and very human, but with reserves that come from God-knows-where?  So it isn’t exactly innocence that’s at stake, but innocence-for-now.  Eight- and six-year-olds should be worrying about imaginary monsters under the bed.  Too many have to worry about real-life monsters that live under the same roof.

But there’s much more at stake than childhood.  We all have to adapt to our own particular circumstances.  At our house, it’s Ms. GR, the two GR daughters, and I.  I joke that I’m a FOG – father of girls – and having just girls has both advantages and disadvantages.  It means that there’s no danger I’ll slip into treating girls and boys differently, but it also means that I have no opportunity to treat them the same.  It also means that everything I do — how I act, how I talk, how I treat them, and how I treat Ms GR — contributes doubly to their mental map of just what a man is.  It’s a big deal, and here’s an example of why:  As I have read these diaries, they have reinforced in my mind one of the key messages I want to give our daughters as they grow into women.  Particularly in the world of dating, sex (oh, God), and relationships, I want to be able to insist on one thing — that they refuse to become involved with anyone that doesn’t treat them, Ms GR, and me with respect.  Well, that insistence doesn’t mean anything unless I treat them and Ms GR with respect every day.

The hardest part may be realizing that there’s only so much we can do.  But what we do does matter.  Simple, everyday things like having dinner together matter.  Simple, everyday things like caring about their homework, hopefully without being too overbearing, matter.  Playing catch, admiring their creativity, showing up for stuff at their school.  We can’t do it all, and it’s a constant juggle of compromises.  Well, they have to learn that, too.  But if we rear them in a world where they know, without thinking about it, that we’re there and paying attention, then hopefully they’ll know where to turn when bad stuff happens.  I only hope it’s never too bad.

Our daughters take karate, because they love it.  The like the sense of mastery, they love the progression from one belt to the next, they like learning new moves.  What I like about it for them is that it gives them a sense of confidence and mastery, a sense of strength, of what they can do with their bodies (watch your six-year-old rip off 25 push-ups and you’ll know what I mean), and in their class, a sense that some of the best students are girls, and some boys.  They’re also good at it, which is a huge help, since there will inevitably be some things at which they aren’t so good.  It improves the chances that they’ll never believe that when they try something at which they aren’t so strong, “girls aren’t good at that.”  I hope they never have to use their skills to protect themselves physically, but the confidence that they can will always stand them in good stead.  

And then there’s chess.  Oh, my, chess.  Our six-year-old doesn’t seem to be getting it so much (she’s stronger at karate), but our eight-year-old is maybe six months away from beginning to beat me regularly.  She’s developed a strong, aggressive style of play, and once she learns a little better defense, she’ll be very tough.  Girls aren’t supposed to be good chess players?  Wrong again.

Our family looks pretty traditional — mom, dad, two kids.  I’m glad for that myself, because it’s an environment that works well for me, and supports my desire to do the best for my daughters.  But that’s just me.  It isn’t remotely what determines success.  Good parents come in all shapes and sizes and types of homes, and so do bad ones.  The most remarkable parents I know succeed in spite of a partner — usually an ex-partner — that’s an actively negative influence.  I don’t know how they do it.  You have my undying admiration.

As I reflect on the string of recent diaries, I realize that lasting good comes from a steady accretion of small, positive influences, but lasting harm can happen in a moment.  There’s no 100% protection from that lasting harm.  There’s only fortification against it, teaching about how to make it less likely, and solace and healing when it does happen.  I hope we’re up to all of it.

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”  –  Lewis Carroll, Through the Looking-Glass, and What Alice Found There

Humpty Dumpty is the ideal mascot for the Looking-Glass world of Bush Administration regulatory policy.  Remember those fabulous ’80s?  Even in the Reagan Administration the Justice Department had an active Antitrust Division.  On January 1, 1984, under a consent decree settling a long-running antitrust suit, AT&T voluntarily divested itself of its local telephone service business, spinning off seven regional Bell Operating Companies, or “Baby Bells.”  Now, like the killer cyborg in Terminator 2, the spawn of the old AT&T are gathering themselves back up and reconstituting a new, Texas-based, AT&T.  And it looks like all the king’s horses and all the king’s men are ready to help.

Today’s news includes a new installment of the AT&T un-divestiture – or perhaps we should just say, investiture.  AT&T (that’s the new AT&T, which is to say SBC), has announced that it will acquire BellSouth in a stock deal which, if it goes through, would give BellSouth holders shares of AT&T, and AT&T control of local telephone service from California to Florida.  It reassembles much of the old Bell System, plus significant cellular assets (principally, Cingular Wireless), in a regulatory environment Humpty Dumpty (or Karl Rove, which amounts to the same thing) might call “unfettered competition.”  

AT&T now operates in a much different environment than that under which the old AT&T established its original regulated monopoly.  In 1913, Theodore Vail cut a deal with Congress and the Wilson Administration, basically allowing AT&T to monopolize local telephone and long distance service, provided it offered pretty much universal local service, connected its long distance service to local networks, and agreed to a clear, if generous, regime of rate regulation.  The key document in this agreement was the 1913 Kingsbury Commitment.  The regulatory regime permitted AT&T fairly reliable profitability, but it also prevented price-gouging, especially for POTS (plain old telephone service).

Eventually, AT&T’s monopoly, and its degree of vertical integration (in addition to local and long-distance service, AT&T controlled research and development at Bell Labs, and manufacturing of many components at Western Electric) became too much for the Antitrust Division.  The Justice Department sued AT&T in 1974, and in 1982 AT&T agreed to break itself up, receiving in return the ability to enter other businesses, including computers and cable TV.  The breakup formally occurred at the beginning of 1984.

At divestiture, the local telephone service of what had been the Bell System split into seven Regional Bell Operating Companies (RBOCs), along geographic lines.  The seven were

NYNEX (New York and New England)
Bell Atlantic (mid-Atlantic states)
BellSouth (Southern states)
Ameritech (upper Midwest)
Southwestern Bell Corporation (Missouri, Oklahoma, Arkansas, Texas)
U S WEST (intermountain West and Pacific Northwest)
Pacific Telesis (California and Nevada)

In addition, a much smaller AT&T retained its long-distance business, and has had a variety of other business misadventures along the way.  There’s a good deal of entertaining history here.

NYNEX and Bell Atlantic have subsequently merged with parts of GTE to form Verizon.

U S WEST has essentially become the telephone service backbone of Qwest Communications.

Southwestern Bell Corporation was the only one of the RBOCs that was not a new creation.  The other RBOCs had to integrate smaller Bell subsidiaries into new structures.  Southwestern Bell Corporation was simply the old Southwestern Bell, the St. Louis-based AT&T sub that provided local service primarily in Missouri, Oklahoma, Arkansas, and Texas.  Relatively early on, the company moved its headquarters from St. Louis to San Antonio, and along the way it also morphed into SBC.  SBC has acquired Ameritech and Pacific Telesis (which had renamed itself Pacific Bell), and more recently acquired AT&T itself.  After SBC acquired AT&T, it began the process of re-branding, shedding the SBC name and tagging its domain with the mark of AT&T.

The acquisition of BellSouth would give SBC/AT&T control over local telephone service in California, Nevada, the old SBC territory, and the South.  Perhaps more important, it would also give the company complete control of Cingular Wireless, the largest mobile telephone concern in the US.  AT&T now owns 60% of Cingular, and BellSouth owns the other 40%.

It’s interesting to note how antitrust policy toward deals of this type has changed in the past several years:

The merged company would have 70 million local-line phone customers, 54.1 million wireless subscribers and nearly 10 million broadband subscribers in the 22 states where they now operate. The deal appears to be the largest yet among U.S. telecom players.

In 1999, MCI WorldCom Inc. agreed to buy Sprint Corp. for an even larger sum, $115 billion, but that deal was blocked by federal regulators.

In the current environment, it’s hard to imagine more than token antitrust opposition to the deal.  Even Ed Markey, ranking Democrat on the House Telecommunications Subcommittee, sounds like he’s just taking advantage of a political freebie when he says, “Our nation’s telecommunications markets must be vigorously competitive and open to innovation in order to promote job creation and economic growth.  This merger proposal is one that unquestionably merits the utmost scrutiny by government antitrust officials.”

In fact, the AT&T/BellSouth deal isn’t likely to promote job creation.  The combined entity would have 316,000 employees at first, but look for “synergies” – another word Humpty Dumpty might have used proudly – to eliminate more than a few.  As for competition in high-speed internet, cellular phone service, and other areas, well, if you have to ask, you don’t want to know.

Meanwhile, Humpty Dumpty himself would be proud of this deal.  After all, his own perch on the wall is secure, thanks to his friends in high places:

`Don’t you think you’d be safer down on the ground?’ Alice went on, not with any idea of making another riddle, but simply in her good-natured anxiety for the queer creature. `That wall is so very narrow!’

`What tremendously easy riddles you ask!’ Humpty Dumpty growled out. `Of course I don’t think so! Why, if ever I did fall off — which there’s no chance of — but if I did –‘ Here he pursed up his lips, and looked so solemn and grand that Alice could hardly help laughing. `If I did fall,’ he went on, `the King has promised me — ah, you may turn pale, if you like! You didn’t think I was going to say that, did you? The King has promised me — with his very own mouth — to — to –‘

`To send all his horses and all his men,’ Alice interrupted, rather unwisely.

`Now I declare that’s too bad!’ Humpty Dumpty cried, breaking into a sudden passion. `You’ve been listening at doors — and behind trees — and down chimneys — or you couldn’t have known it!’

`I haven’t indeed!’ Alice said very gently. `It’s in a book.’

`Ah, well! They may write such things in a book,’ Humpty Dumpty said in a calmer tone. `That’s what you call a History of England, that is. Now, take a good look at me! I’m one that has spoken to a King, Iam: mayhap you’ll never see such another: and, to show you I’m not proud, you may shake hands with me!’ And he grinned almost from ear to ear, as he leant forwards (and as nearly as possible fell off the wall in doing so) and offered Alice his hand. She watched him a little anxiously as she took it. `If he smiled much more the ends of his mouth might meet behind,’ she thought: `And then I don’t know what would happen to his head! I’m afraid it would come off!’

`Yes, all his horses and all his men,’ Humpty Dumpty went on. `They’d pick me up again in a minute, they would! However, this conversation is going on a little too fast: let’s go back to the last remark but one.’

Remind you of anybody we know?

President Bush made a surprise appearance this morning at the ceremonial swearing-in of Ben Bernanke, the new Chair of the Board of Governors of the Federal Reserve.  Also in attendance were Bernanke’s predecessors, Alan Greenspan and Paul Volcker.  In their years as Fed Chairs, Mr. Greenspan and Mr. Volcker both developed formidable political prowess to complement their economic policy skills.  By the end of his tenure, Mr. Greenspan was basically a politician that wore an economist costume to work every morning.  Mr. Bernanke has limited political experience, unless you count success in academia (and that may in fact count).  But based on Mr. Bernanke’s remarks this morning, he seems to be off to a good start.  My take is that in about a four-minute talk, he sliced up Mr. Bush this morning with a knife so sharp the pieces didn’t begin to fall off until he was back in his limo.
President Bush apparently thought it would be a good idea to steer clear of the grilling Abu Gonzalez is enjoying on Capitol Hill, and attend a happy-talk event for his daily face time instead.  Mr. Bush’s appearance at the Fed was unusual, to say the least.  Mr. Bernanke himself pointed out that only two other Presidents, FDR and Ford, had ever even visited the Federal Reserve Building.  (“WTF are you doing here, Mr. President?”)  Bernanke proceeded to rub Bush’s nose in it further by quoting Roosevelt:

In his remarks in this building in 1937, President Roosevelt described as our purpose “to gain for all of our people the greatest attainable measure of economic well-being, the largest degree of economic security and stability.”

Not exactly Bush’s agenda.

Mr. Bernanke also expressed his lack of deference to the Executive Branch in unmistakable, if indirect, terms.  He pointed out that it was Congress that established the Federal Reserve, and that it is to Congress that the Fed is responsible:

I would like to extend a special welcome to members of Congress. The Federal Reserve was created by Congress in 1913 and entrusted with the power, granted originally to the Congress by the U.S. Constitution, to coin money and regulate the value thereof. Accordingly, it is incumbent on the Federal Reserve to report regularly to, and work closely with, the Congress. I look forward to a strong and constructive relationship with members of both the House and Senate.

Note the emphasis on the way the power of the Fed derives from one of Congress’s enumerated powers, to coin money and regulate its value.  No Executive mandate at all.

Mr. Bernanke’s final, and perhaps most artful, cut at Mr. Bush was perhaps the best rhetorical use of non sequitur I’ve ever seen:

Mr. President, as you know, on September 11, 2001, and the days that followed, Vice Chairman Roger W. Ferguson, Jr., who just swore me in, and many members of the Federal Reserve staff–here, in New York and around the country–worked inexhaustibly to ensure the continued functioning and recovery of the American financial system. The dedication and knowledge demonstrated that day by so many people exemplifies why the Federal Reserve as an institution is far more than any single individual.

Why bring up September 11?  Two reasons, I think.  One was, “Oh, it’s you, Mr. President.  I guess that means we’ll talk about September 11 as though it had some relevance.”  The other was, “At least somebody around here knew what they were doing then.”

To my mind, Mr. Bernanke’s brief talk was a thing of beauty:

Pointing out that showing up at the Fed is something Presidents just don’t do;

Expressing deference to Congress (and not the Executive);

Quoting FDR (and emphasizing economic well-being for all Americans);

Bringing up 9/11 when it had no relevance at all, just to hold up the mirror to Bush.

Ben Bernanke is nobody’s fool.  Certainly not George W. Bush’s.  Mr. Bush looked happy when he left the stage.  He won’t be when he gets back to the White House and his aides explain it to him.

Around here, and everywhere else that politics is the main talk, all eyes were on the Senate today, of course.  Enough said about that, in this diary anyway.  In the real world, meanwhile, most everybody’s attention focused on two news stories, more horrible than usual, from Iraq, along with Al Zawahiri’s demonstration that even hardened terrorists can act like fifth-grade bullies when suitably provoked.  But you knew all that.  

So who could blame anybody for not noticing today’s economic data?  They were really all over the place, painting a pretty confusing picture.  Let’s take a look.

What was there?  Well, ExxonMobil reported record-breaking profits.  ExxonMobil’s profit didn’t just break the record for the company; at more than $36 billion for the year, ExxonMobil made more than any US company has ever made.  Gee, I wonder why?  

The company said its average sale price for crude oil in the U.S. during the quarter was $52.23 a barrel, compared with $38.85 a year earlier. It sold natural gas in the U.S., on average, for $11.34 per 1,000 cubic feet, compared with $6.61 during the same period a year ago.

Democratic lawmakers were not amused:

Sen. Barbara Boxer, a California Democrat who sharply criticized oil executives appearing before Congress in November, on Friday called on the Bush administration and the Federal Trade Commission to “put an end to gouging.” She then suggested that FTC stood for “Friend to Chevron.”

Sen. Chuck Schumer, a New York Democrat who proposed an extra tax on oil company profits in November, said Monday that “the federal government has a responsibility to make sure that these companies continue to innovate instead of just profiting from the status quo.”

The Commerce Department released its December report on Personal Income and Outlays (This is a pdf).  This is the report that tells us how much we all made, and where we spent it.  Good news first, disposable personal income increased by +0.4% over November.  Trouble is, personal consumption expenditures increased by +0.9% over November.  November already had a negative savings rate (expenditures greater than income), so in December, it was worse.  In fact, for all of 2005 the personal savings rate was -0.5%, the first time personal savings has been negative for a full year since the Great Depression.  

Now, call me a cynic if you must, but ExxonMobil’s report and the Commerce Department report seem like they might be related somehow.  The very sharp rise in the prices of oil and natural gas were likely a factor in both.

A number of economic observers have also noted that at least part of the bulge in consumer spending has to do with the housing market:

One major reason that consumers felt confident in spending all of their disposable incomes and dipping into savings last year was that a booming housing market made them feel more wealthy. As their home prices surged at double-digit rates, that created what economists call a “wealth effect” that supported greater spending.

The concern, however, is that the housing boom of the past five years is beginning to quiet down with the rise in mortgage rates. Analysts are closing watching to see whether consumer spending, which accounts for two-thirds of total economic activity, falters in 2006 as Americans, already carrying heavy debt loads, don’t feel as wealthy as the price appreciation of their homes would seem to indicate.

The housing numbers out last week weren’t exactly reassuring.  Sales of existing homes fell 5.7% in December (another pdf), and inventories stretched out to 5.1 months’ supply.  At the same time, new home sales rose by 2.9%.  Pure conjecture on my part, but it may be that homebuilders are starting to dump inventory in some markets, crowding out sellers of existing homes.  We’ll see.

On Friday, the government reported that Gross Domestic Product, the aggregate value of all the goods and services we produce, grew at only a 1.1% annual rate in the fourth quarter of 2005, the slowest rate in three years.  The usual suspects attributed the slowdown to a big drop in spending on new cars — apparently we had bought all the new cars we needed over the summer, when the automakers offered those big incentives.

Given the contradictory economic data, plus the fact that the Fed Open Market Committee is due to close out the Greenspan era by announcing its decision on interest rates Tuesday at 2pm Eastern, financial markets basically froze in place on Monday.  Major stock market averages changed very little, interest rates crept up a tiny bit, and the dollar pretty much stayed put relative to other major currencies.

Taken all together, the picture is tepid at best.  The low (well, negative, actually) savings rate may have to do with the start of a wave of retirements — some of those born in 1945 and 1946 are beginning to retire now.  If so, that low savings rate may be with us for quite a while.  It may also have to do with softness in housing, which may in turn lead to softness in consumer spending, which may in turn lead to economic softness.  If so, let’s at least hope it all happens in time to be an issue this November.