Fifteen: A New Constitution

In the most recent Economist magazine, I saw a review of a new book by a professor out of Virgina (I think) named Sabato (excuse me, Professor, if I've fractured your name). Anyway, the book seems to echo what I have been advocating for many years; i.e., government reform at the Constitutional level. Although the professor's approach is more thought out and, certainly informed, than mine (after all, he is professional scholar, and I am just a small town lawyer and life-long political and government critic), we appear to be on the same track, which tells me that many, many Americans feel the same way.

My pet proposed constitutional amendments (which would hopefully be embodied in Sabato's new document) are: Term limits on all elected federal office holders; Mandatory government service for all Americans, to be performed between the ages of 18 and 25; and Tax Reform (preferably the Forbes flat tax). The first of these proposals, term limits, is without a doubt the most important, because, as Sabato would probably agree, since all human beings always act in their own self interest, the current system of virtual lifetime public welfare (excessive salaries, gross sumptuous perquisites, lifetime health and pension coverage, etc.) for U.S. Representative and Senators will never allow those office holders to make decisions for the public good and their own expense.

What are the chances of Saboto's convention or my amendments coming to pass in the next several generations? I put the odds at less than one in ten.

Fourteen: WSJ/NBC News Poll

Today I saw a poll cited in a WSJ article which states results from the Poll thusly: "51% of those polled say that [Hillary Clinton] is knowledgeable and experienced enough to handle the presidency." This is further proof that either: a) only people from Arkansas participate in polls, or b) a majority of Americans and virtually all Democrats have absolutely no clue what kind knowledge and experience are required to do a passable job of being President of the U.S.

Let's face it, most of those who would vote for Hillary actually don't give a rat's behind about her; it's Bill they really long for. For some reason, many Americans associate good things in their lives with Bill Clinton as president. Maybe it's the tech bubble, or the moral equivocating, or the gridlock in at the federal level, but whatever the case, I suspect that just knowing Bill Clinton is roaming the halls of the White House (no doubt looking for the indiscriminate sex he couldn't get in high school or college) is enough to get many folks to swallow hard and vote for HC.

Thirteen - Hillary Is In

So, the American voting public has spoken and we have decided that we want Clinton II, just like we had Bush II. Except that Clinton II will not have the dumb luck which accompanied Clinton I, that is the greatest stock market bull run in history. Clinton II will also be differentiated from Clinton I in that during Clinton I, the President was more or less harmless, just a good ole boy who wanted to get laid, since he never succeeded in high school. In Clinton II however, we will have probably the most ambitious and definitely the most conniving and deceitful president since Richard Nixon.

Eleven: Golf

Enough about business and politics. Today is the first day of Masters week, a true Rite of Spring for golfers. For ten years now, my sport has been dominated by the machine known as Tiger Woods. While no one can take issue with the amount of skill he has, and apparently the hard work and discipline he brings to his job, I for one am not convinced that Mr. Woods has been good for golf.

Has golf become a "better" game since Woods' arrival, or just richer (much, much richer) for a few at the top? The Fedex Cup, which begins this year, which provides a $10 million payday for one individual, is this "good for the game" or just good for television and the guy who wins?

Golf, after all, is a game. It is supposed to be fun. I have rarely, if ever, observed Mr. Woods having fun on the golf course. Fuzzy Zoeller, Freddie Couples, the King, Lee Trevino, - these are just a few of names that come to mind when one realizes that getting paid to play golf is probably the best gig in the world. Woods doesn't seem to appreciate that.

At the level of us weekend hackers, what has the Woods Effect really been? Well, you can now wear a T-shirt at a private club. That's about all I can see.

Notwithstanding Woods, I think golf is pretty healthy, meaning that the game is going to survive any person or any fad. It will be interesting to see what happens in golf after the television boobs no longer have Woods to woo over. Perhaps the relative money pot will diminish a bit for the pros. But the enjoyment that we normal golfers get from being outside with friends, hitting one of every two or three shots really well, getting the occasional birdie, and being frustrated by those glorious rules which require you to penalize yourself, will go on unabated.

Ten: U.S. Attorney Flap

Fortunately, there is still a slight non-lawyer majority of the population in this country. Otherwise, we would be in worse trouble than we are. After listening to these prima donna ex-U.S. Attorneys who were fired, you would think that Bush had just taken the intellectual and moral equivalent of Fort Knox and shipped it all to, say, France. These guys want these jobs for exactly one reason - as a stepping stone to either elective political office, or to a plum position in silk-stocking law firm, which is essentially a non-elective political office. By political, I mean that what you do it not nearly as important as how you do it. It also means, that directly or indirectly, most of the revenue stream is coming from a government source. The bottom line is that these U.S. Attorneys are high paid errand boys. They are supposed to do what the boss wants. They are not federal judges (promised jobs for life despite poor job performance or even gross incompetence).

This cause celebre is simply another opportunity for the democrats to flex their muscle in preparation for the inevitable pendulum swing in the White House, which will follow what has already taken place in Congress. Bush is radioactive, and any republican who touches him will suffer the same permanent retirement which awaits Bush.

Nine: MOT and Icahn

The last time I wrote about MOT was to compare Ed Zander's results to Nardelli at HD (Nardelli got fired for being a jerk while making a lot of money for stockholders and keeping the stock price essentially flat; Zander took over a telecom behemoth after it crashed with the dotcoms, and has made a bad situation into a nightmare).

Now, after Icahn recognized the tremendous locked up value in MOT and began building a stock position, the MOT board advises shareholders not to fall for Carl's proxy because "the board does not endorse it." That's like telling a mugger not to take your wallet because you don't want him to!

What I can't believe is that Blackstone, Texas Pacific, and KKR are messing around with utilities when low-hanging fruit like MOT is ripe for the taking.

Eight: GM and Merrill Lynch

This morning a ML analyst changed his recommendation on GM from "neutral" to "buy." In my experience with ML, I interpret this as a "strong sell." Simply put, since the days of the Henry Blodgett/Internet insanity, ML has demonstrated time and again a perfect sense of timing for recognizing when a trend is finished. But enough of ML's history. Let's look at GM's numbers.

GM's most recently reported operating margin is less than one percent. Most industry observers agree that most GM brands need major product over-hauling in the areas of aesthetics, performance, and quality (yes, GM has made great strides in quality, but still lags far behind the Asians). How in the world is GM ever going to fund those activities with no gross margin? Add to this the fact that the GM selling prices are too high (which simply allows the Asians to match the GM selling prices, and with their more efficient manufacturing and higher quality, make a tidy profit), and you have continued, inexorable downward pressure on market share, which further erodes margins, and so on...

So I ask you, Mr. Merrill Lynch analyst (probably some MBA type whose has never been inside of a factory of any sort), why is GM a stock a good investment?

Seven: Hillary

So, by her own words in every interview when she is asked why she should be the leader of the most powerful country on earth, Hillary's first words are, "My experience..."

Her experience: Hillary was almost the Health Care Czar of the United States of America, save for a monstrous error in judgment by both Bill and Hillary (but you've got to believe that Hillary was behind that one from the beginning); Hillary has been a United States Senator from the most liberal state in the United States for six years; an absolute dearth of business or executive level experience anywhere; was a lawyer for a while, but never ran her own firm, or even managed a practice area in a firm. Hillary did manage the damage control and spew propaganda ("vast right-wing conspiracy") for the several scandals during Clinton I, which would probably qualify her to be a decent chief of staff, or top political adviser to a president.

Compare Hillary's "experience" with that, say, of John McCain, Christopher Dodd, Sam Brownback, Rudy Guiliani, Al Gore, hell Jesse Jackson for that matter. Hilliary Clinton has one reason, and one reason only which drives her quest for public office: She is convinced that she is a morally and intellectually superior being, with some sort of divinely inspired right to decide how others should live their lives. She is, by all accounts (even her allies) one of the most coldly calculating creatures ever foisted upon the American public.

We survived Clinton I (just a "good ole boy" who couldn't get a date in high school), and Bush II (a decent human being, but an idiot). It is not a over-statement to say that a Clinton II presidency could quite possibly be a irreversible turn towards the end of our republic.

Six

Surprise, surprise. MOT is right-sizing, down-sizing, reducing-in-force, seeking voluntary terminations, or whatever the term du jour is these days for getting rid of dead weight. And God knows, MOT has a lot of it. How many more of these will Zander, or whoever is running that cesspool of MBA losers disguised as a telecom/technology company, go through before admitting the inevitable - that MOT needs to be broken up in as many pieces as possible, so as to shatter the corporate culture which burdens the remaining capital assets and intellectual property?

Probably 40% of the average Motorolan's work day is devoted to complying, monitoring, and analyzing human resource schemes for compensation and ladder-climbing. When you're inside of that kind of environment, it is simply impossible to focus on activities essential to the corporate livelihood - namely sales, new product development, customer service.

If ever there was a juicy piece of low-hanging technology fruit for a creative private equity firm, MOT is it.

Five

Permit me to indulge in a little gloating. Yesterday's post ("Four") was quite timely, to say the least. I see that MOT is down 10% in the pre-market this morning. On to (hopefully) better things.

Well, maybe not. Let's talk about Pelosi. I wish I didn't have to, but as long as she is spending my tax dollars to congratulate herself on become the first woman Speaker, I think I have the right to toss a few spears. It's pretty obvious that Pelosi and the Democrats really didn't "win" anything. George and that bunch of lily-livered wimps on Capitol Hill handed power to the Dems. I guess they were sick and tired of accepting all the bribes and decided to let the Dems share. And of course it really makes no difference which party is in power, because it's the entrenched bureaucracies that suck up the economic wealth we create, and when was the last time either party was able or inclined to reign in the growth of government?

So my bottom line for Pelosi is: If you can run the House of Reps like a business that is accountable to its shareholders, we'll be fine. On the other hand, if you run the House like a day care center, then we might as well just start speaking French or Swedish, because we're continuing to head for out and out Socialism.

Four

So, Nardelli got sacked at HD while doubling revenues and profits. And he got paid a couple of hundred mil to take a powder. It's not like the money is coming from unsuspecting boobs who have it deducted from their paychecks, like federal income tax or union dues. The money is coming from the shareholders of HD. Last time I checked, no one was forced at gunpoint to buy shares of HD.

If you want to look at a CEO who really desrives the axe, check out Ed Zander at Motorola. Zander took over a few years ago after the prior CEO, Chris Galvin, mismanaged what he thought was his family inheiritance. Actually, this entire compmany should be carved up like the Christmas turkey it really is. Since the dotcom bubble, MOT has tanked and never even started a comeback, despite having technology and IP assets second to none. It just goes to show that being smart is not necessarily a ticket to profit and success. MOT has displayed a kind of corporate arroagnce over the years which only an American company could develop. But for MOT's corporate idiocy, Nokia would not exist today. On top of all of MOT's other obvious assets, it has a board member (Negroponte) who operates at all of the highest levels of government. If you can't land a few fat contracts when you have relationships like that, your company deserves to be toast.

Three

Back in the office now, primed for what I thought would be a short, but productive work week. I didn't realize how short. Turns out Bush gave all federal workers the day off today. Isn't that nice. Really sets a great example for us stiffs in the private sector who have employees. Not to mention those people who had planned some business or activity which included the use of, a trip to, or interaction with a federal office. Hell, the US Post Office alone is taking it in the shorts for probably close to a billion dollars by paying everyone NOT to work for another day. I don't think President Ford would have approved of all this.