Sequestration? No! Scam to use federal money? Yes!

Go figure….

A steady rise in housing prices nationwide has made analysts and investors hopeful about the future of the U.S. housing market overall. But in Michigan, one of the states most battered by the financial downturn, officials are still grappling with the grim remains of years of unemployment, population loss, and plunging property values.
Those remains are not figurative. They can be seen in the form of abandoned houses — tens of thousands of them — in neighborhoods around the state. Detroit alone has more than 30,000 such buildings.
That’s why the Michigan State Housing Development Authority has been seeking permission to use federal funds aimed at keeping people in their homes to instead tear down derelict structures where no one will ever live again, and which often attract drug dealers, prostitutes, or arsonists.
Michigan’s leaders argued that demolition was the sensible place to start.
Yesterday, the feds finally agreed. Treasury officials released $100 million in money from the Troubled Asset Recovery Program, or TARP, to pay for a pilot demolition program in five Michigan cities: Detroit, Flint, Grand Rapids, Pontiac, and Saginaw.

So let’s see if we get this right….

1. These buildings are private property owned by banks or other investment groups.

2. They cannot be sold and they simply sit there losing value.

3. Some of those private buildings are used by the homeless or criminals and those private owners of those buildings do not pay for security to protect them.

4. The property owner’s solution is to get their Congressman to send a letter to TARP to use money (earmarked to keep people in their homes) as funds to destroy private property that is losing value.

Not a scam you say? Well, read this….

“U.S. Representative Daniel Kildee, a Democrat from Flint, argued his state’s case in a March letter to Treasury Secretary Jack Lew [PDF], whose department administers the Hardest Hit fund. He cited research showing that in Flint, where 12 percent of the housing stock sits empty, that sale prices for occupied homes go down by 2.27 percent for each abandoned structure nearby. Kildee was the co-founder of the Center for Community Progress, a national organization that advises cities around the nation on how to reverse blight, and he also co-founded Michigan’s Genesee County Land Bank, which buys up and develops vacant and foreclosed properties in the area that includes Flint.”

Oh, gosh…the man who co-founded a Land Bank that buys up and develops vacant and foreclosed properties wants to use federal funds to tear the damn buildings down and save some money while he waits to re-sell them. Let me see…he saves money on demolition, he saves money on insurance of undeveloped properties, and he saves the new buyers the cost of any demolition also.

What a Congressman! He is in on the deal! ( That may not be true although I infer it.) And because he is a Democrat, he gets the Administration to do what he wants….and wasn’t he clever to get the State of Michigan’s Housing Development to push for this in the Federal government. It is truly Orwellian when the State Housing Development is used to get money to destroy homes that were foreclosed upon.  How many of those homes could have had residents living in them if they were purchased or paid by the government instead of foreclosed upon?

And, of course, this is all done during sequestration….

This is why you, dear reader, need to elect reasonable people to Congress instead of Republicans and Democrats.

Update: I removed some of my emotion from this post. I got a little carried away.  Maybe next time, the cities of Michigan can sue the property owner, foreclose on the land, take ownership, put people to work tearing them down or boarding them up. Sheesh. Does everything require going to the Federal government for money to support some company, some developer, or some other initiative?

Yahoo CEO Marissa Mayer’s Good Decision

Yahoo CEO Marissa Mayer makes the right move.

She said everyone has to come back to the office to work. Boy, is she in trouble! Yahoooooooo!!!!!!

I have a similar and true story from a time when I headed up worldwide service for a division of a Fortune 100 company.

The business manager for my department stopped me in the hallway several times and left me voice and email messages that he wanted to talk about a way to save us big bucks by getting rid of all the service offices in the US. This was 1996.

I feigned busyness several times but he finally came into my office and sat down. He began by telling me how technology has changed the work world. He spoke about personal computers in employee homes and how telephones and email had changed the way the world worked. He told me all the virtues of not having six district offices full of employees and consolidating the administration process into a single headquarters location. He told me that our district managers did not need an office to meet with the local service engineers and that our service managers could have great relationships with sales managers even if they never met. There was no longer any need to meet face-to-face.

Well, I looked at him and said “Scott, why are you in my office?”

“Because I wanted to tell you about this opportunity”, he said.

I said, “Scott, why are you in my office?”

He looked perplexed and quizzical as if he did not know what to say. So I said, ‘You left me voice mails and sent emails and yet here you are sitting in my office to talk to me face-to-face. Why?”

He nodded that he understood and I continued by saying, “There is value in meeting face-to-face. There is value in having people around you to give you feedback by actions, word, or deed that you have a common purpose and goal to accomplish. How can you do that  if you never meet the people you work with?”

Now the world has changed into exactly what Scott talked about and very few medical companies have regional or district offices anymore. They have consolidated everything into the home office, collected all the savings of not having those local offices, and spent that money on technology to communicate with each other but they have lost two things of great importance: the ability to serve a customer’s need and the ability to create a team with a common purpose.

I know this because I work with 100 service companies now. Supporting the customer is a sometime thing. The managers of those companies support the logistics systems, the call dispatch system, the tech support system, and the service administration system. Some of those managers even have a role to support the “equipment replacement system” when the product doesn’t work like it should.

I applaud CEO Mayer’s decision to bring employees back to the workplace. Yahoo is about service and innovation. How can you build a team if you never work together? How can you foster creativity when your employees are at home every day? And finally why should the CEO, CFO, all VPs and Directors come to the office while their employees work at home?

And finally, what kind of message would it send if Marissa Mayer worked from home while allegedly turning the company around?

There are times to work from home. Exceptions. Special projects. Special employee needs. But not everyone and not all the time.

Kudos to Mayer. She will do well.

Oh, btw, one of the best managers I ever knew practiced MBWA. Management By Wandering Around. He walked around and was available to everyone and anyone. Face-to-Face. All the time. Finest run company I ever worked with. I can’t imagine what old Bill would do if his employees were all at home every day. He would have failed instead of helping to build one of the finest medical companies in its day. Too bad it was purchased by a monolithic company that weakened it. They let people work from home now.

The $1 T Platinum Coin and Caligula’s Horse

If you watch (or read) the news at all then you know the talk is all about creating a one trillion dollar coin and giving it to the Federal Reserve to forestall America’s debt ceiling crisis. The theory is that, under law, the Treasurer of the US can mint a platinum coin in any denomination he chooses and give it to the Federal Reserve. The Reserve is required by law to accept this coin as legal tender. Recording this legal tender on the books will pay off a trillion dollars of debt and allow the US to spend another trillion dollars before reaching the debt ceiling again.

Many pundits and news media were enamored that fake money can pay off debt. Others claim that there is no debt crisis and that fake money can pay off fake debt quite easily. All of this reminds me of Emperor Caligula’s horse, Incitatus, and how Caligula used his horse  in contempt of others. Historians tell us that dignitaries were invited to dine with Incitatus and that they came and ate in the stables. Historians also tell us that Caligula appointed Incitatus  to the Senate and that his horse  attended working sessions of the Roman Senate. These were contemptuous acts by Caligula to demonstrate that his power over others was so complete that he could dishonor and discredit them by having them eat in the stables with his horse or have them debate in the Senate with his horse.

The talk of using a $1T coin to pay off a portion of America’s debt expresses the same level of contempt towards the Federal Reserve institution as Caligula’s appointment of Incitatus was to the Senate. The fact that pundits and news media discussed (instead of denouncing) the functional possibility of this is the equivalent of Rachel Maddow, Lawrence O’Donnell, and Sean Hannity talking about who will be dining with horses this evening to further their aims. Sad, isn’t it?

Yesterday, with the flourish of an emperor, the $1 T coin idea was dismissed:

“Treasury Department spokesman Anthony Coley said the agency wouldn’t mint one  and the Federal Reserve would not accept the coin.

“Neither the Treasury Department nor the Federal Reserve believes that the  law can or should be used to facilitate the production of platinum coins for the  purpose of avoiding an increase in the debt limit,” Coley said.”

Read more:


Note that Coley not only announced that the Treasury would not mint the coin but that the Federal Reserve would not accept one. It is troubling that the Federal Reserve implies that it is the sole arbiter of currency that it will accept from the Treasury department. This would be a burr under my saddle if I were a Senator or a President and I would make a point that while the America does not intend to do anything so foolish, I would expect the Federal Reserve to comply with the law as written in the future or I would halt all payments to it. In the meantime, I would have Congress change the law so that this confrontation could not occur in the future.

The truly disturbing portions of this overall public discussion is the glee upon everyone’s face that there was a ‘secret’ way out of the debt crisis that did not result in government austerity. In a ‘man bites dog’ story, the current financial burden biting the government can be overcome by biting the financial system in return.

Many people attempt to compare our government to businesses or our government to our personal situations but there are two specific things that national governments have that businesses and people do not: Laws that force people to do what they do not wish to do and the power to print money. And ever since our currency was taken off the gold standard, our money’s value is solely dependent upon what other people think it is. Specious talk of using fake money to pay debt owed to the Federal Reserve will cause a dollar crisis around the world that will destroy world commerce for a century. No one would think our money is serious if we fake it so egregiously.

Dining with Incitatus is not the same as dining with the emperor. If our American empire is to survive, others must sit at our table and not in the stable. Change the law so that no President or Treasurer can issue false currency to repay debt. Otherwise we may yet have a Caligula in the White House willing to insult the financial institution of America.

The faintest of praise is fodder for campaigns

Those political advertisements about Governor Walker and job creation are compelling, aren’t they? One side triumphantly says ‘Governor Walker created 30,000 jobs since he took office’ (woohoo!) while  the other side says disparagingly ‘Under Governor Walker, Wisconsin placed last in job creation’ (OMG, the sky is falling!) And, as we suspect, both marketing ads are likely true but immaterial.

Did you know that Wisconsin possesses a total of ~2.8 million jobs? Those 30,000 jobs represent an increase of ~1% of the total jobs in Wisconsin.  Do I still hear a ‘woohoo’?

All of this only matters if you think that the Governor can create jobs or lose jobs in our state. We are all adults and we know that a rising tide floats all boats while an ebbing tide lowers them – whether or not a Republican or a Democrat is in charge. However, if the tide is rising and the jobs boat is sinking, the Governor should do something to save passengers and crew. (pay attention, ex- Governor Doyle.)

Political advertising does bear scrutiny. Touting a 30,000 jobs increase is faint praise indeed in 2.8 million jobs state. Perhaps this should be noted by the media.